Note 8 - Share-based Compensation

6 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

8. Share-based Compensation

The Company has one active stock incentive plan for employees and directors: the 2007 Stock Incentive Plan, which provides for awards of stock options to purchase shares of common stock, stock appreciation rights, restricted and unrestricted shares of common stock, restricted stock units (RSUs) and performance share awards (PSAs). In addition, the Company has one inactive stock option plan, the 1995 Stock Option Plan for Nonemployee Directors, under which previously granted options remain outstanding.

The Company recognizes compensation cost as service is rendered based on the fair value of the awards. The following table summarizes share-based compensation expense recorded (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014

Cost of sales	$	99	$	81	$	180	$	92
Selling, general and administrative expenses		384		749		953		1,093
Total	$	483	$	830	$	1,133	$	1,185

As of June 30, 2015, unrecognized compensation expense related to the unvested portion of the Company’s RSUs and PSAs was $2.5 million, which is expected to be recognized over a weighted average period of 1.3 years.

Stock Option Awards

A summary of the status of the Company’s stock options as of June 30, 2015 and changes during the six months then ended is presented below:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Options			Exercise Price		Contractual		Intrinsic Value
	Outstanding			per Share		Life		(In thousands)
Balance, January 1, 2015		38,000		$	26.05
Options granted		-			-
Options exercised		(2,000	)		22.07
Options cancelled		(4,000	)		28.42
Balance, June 30, 2015		32,000			26.00		3.79	$	-
Exercisable, June 30, 2015		32,000			26.00		3.79	$	-

Restricted Stock Units and Performance

Stock

Awards

A summary of the status of the Company’s RSUs and PSAs as of June 30, 2015 and changes during the six months then ended is presented below:

	Number of RSUs and PSAs			Weighted Average Grant Date Fair Value
Balance, January 1, 2015		231,215		$	36.34
RSUs and PSAs granted		-			-
RSUs and PSAs vested		(49,403	)		30.01
RSUs and PSAs canceled		(36,155	)		34.84
Balance, June 30, 2015		145,657			38.85

RSUs and PSAs are measured at the estimated fair value on the date of grant. RSUs are service-based awards and vest according to vesting schedules, which range from immediate to ratably over a three-year period. PSAs are service-based awards that vest over a three-year period and have a market-based payout condition. Vesting of the market-based PSAs is dependent upon the performance of the market price of the Company’s stock relative to a peer group of companies. The unvested balance of RSUs and PSAs at June 30, 2015 includes approximately 125,000 PSAs at a target level of performance; the actual number of common shares that will ultimately be issued will be determined by multiplying this number of PSAs by a payout percentage ranging from 0% to 200%.

Stock Awards

For the six months ended June 30, 2015 and 2014, stock awards of 10,464 and 7,640 shares, respectively, were granted to non-employee directors, which vested immediately upon issuance. The Company recorded compensation expense based on the fair market value per share of the awards on the grant date of $21.02 and $36.00 in 2015 and 2014, respectively.