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Note 11 - Share-based Compensation | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Share-based Payment Arrangement [Text Block] | NOTE 11 – Share-Based Compensation: In May 2013, the shareholders of the Company approved the 2013 Incentive Stock and Awards Plan (the “2013 Plan”), authorizing the granting of incentive stock options, non-qualified stock options, stock appreciation rights (“SARs”), restricted stock, performance shares and other stock based compensation. A total of 5,000,000 shares of common stock (subject to adjustment for expirations and cancellations of options outstanding from the previous plan) have been reserved for issuance under the 2013 Plan. All options and SARs have been or will be granted with exercise prices at least equal to the fair market value of the shares on the date of grant. At December 31, 2020, the Company had 2,675,107 shares of common stock available for grant of share-based compensation under the 2013 Plan. Share-based compensation is recorded in selling and administrative expense in the statements of comprehensive income. The following table details the share-based compensation expense by type of award and the total related tax benefit for the periods presented (in thousands):
|  | Years Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Stock options and SARs |  | $ | 1,321 |  |  | $ | 407 |  |  | $ | 984 |
Restricted stock |  |  | 777 |  |  |  | 835 |  |  |  | 551 |
Performance shares |  |  | 432 |  |  |  | 243 |  |  |  | 729 |
Total share-based compensation expense |  | $ | 2,530 |  |  | $ | 1,485 |  |  | $ | 2,264 |
Related income tax benefit |  | $ | 286 |  |  | $ | 262 |  |  | $ | 282 |
Stock Options and Stock Appreciation Rights (“SARs”) The Company grants stock options and stock-settled SARs to employees that allow them to purchase shares of the Company’s common stock. Stock options are also granted to outside members of the Board of Directors of the Company. The Company determines the fair value of stock options and SARs at the date of grant using the Black-Scholes valuation model. Assumptions regarding volatility, risk-free interest rate, expected term and dividend yield are required for the Black-Scholes model. The risk-free interest rate is based on the yield of a U.S. treasury bond with a similar maturity to the award’s expected life. The expected life for awards granted is based on the historical exercise patterns experienced by the Company when the award is made. The determination of expected stock price volatility for awards is based on historical Superior common stock prices over a period commensurate with the expected life. The dividend yield assumption is based on the history and expectation of the Company’s dividend payouts. The following table summarizes significant assumptions utilized to determine the fair value of stock options and SARs:
|  | Years Ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Stock Options: |  |  |  |  |  |  |  |  |  |  |  |
Risk free interest rate |  |  | 0.1% - 1.4% |  |  |  | 1.7% - 2.5% |  |  |  | 2.6% - 2.9% |
Expected award life (years) |  |  | 3-10 |  |  |  | 3-10 |  |  |  | 3-10 |
Expected volatility |  |  | 35.6% - 61.5% |  |  |  | 34.2% - 38.8% |  |  |  | 35.4% - 42.1% |
Expected dividend yield |  |  | 1.9% - 5.3% |  |  |  | 2.3% - 2.5% |  |  |  | 1.6% - 2.1% |
Weighted average fair value per share at grant date |  | $ | 2.36 |  |  | $ | 3.96 |  |  | $ | 5.93 |
SARs: |  |  |  |  |  |  |  |  |  |  |  |
Risk free interest rate |  |  | 0.2% - 1.4% |  |  |  | 2.4 | % |  |  | 2.6 | %
Expected award life (years) |  |  | 3 |  |  |  | 3 |  |  |  | 3 |
Expected volatility |  |  | 35.6% - 55.8% |  |  |  | 34.8 | % |  |  | 38.1 | %
Expected dividend yield |  |  | 3.6% - 5.3% |  |  |  | 2.3 | % |  |  | 1.6 | %
Weighted average fair value per share at grant date |  | $ | 2.18 |  |  | $ | 3.97 |  |  | $ | 6.06 |
All stock options and SARs granted prior to August 3, 2018 vested immediately when granted. Awards issued thereafter vest either one or two years after the grant date. Employee awards expire five years after the grant date, and those issued to directors expire ten years after the grant date. The Company issues new shares upon the exercise of stock options and SARs. A summary of stock option transactions during the year ended December 31, 2020 follows:
|  |  |  |  |  |  |  |  |  |  | Weighted Average |  |  |  | Aggregate |
|  |  | No. of |  |  |  | Weighted Average |  |  |  | Remaining Life |  |  |  | Intrinsic Value |
|  |  | Shares |  |  |  | Exercise Price |  |  |  | (in years) |  |  |  | (in thousands) |
Outstanding, January 1, 2020 |  |  | 701,131 |  |  | $ | 16.82 |  |  |  | 2.95 |  |  | $ | 714 |
Granted |  |  | 560,125 |  |  |  | 9.41 |  |  |  |  |  |  |  |  |
Exercised |  |  | (154,396 | ) |  |  | 14.01 |  |  |  |  |  |  |  |  |
Lapsed or cancelled |  | (136,838) |  |  |  | 17.25 |  |  |  |  |  |  |  |  |
Outstanding, December 31, 2020 |  |  | 970,022 |  |  |  | 12.92 |  |  |  | 3.74 |  |  |  | 11,128 |
Exercisable, December 31, 2020 |  |  | 279,707 |  |  |  | 17.41 |  |  |  | 2.41 |  |  |  | 1,664 |
Intrinsic value is the difference between the market value of our common stock and the exercise price of each stock option multiplied by the number of stock options outstanding for those stock options where the market value exceeds their exercise price. Options exercised during the years ended December 31, 2020, 2019 and 2018 had intrinsic values of $1.2 million, $0.8 million and $1.2 million, respectively. During the years ended December 31, 2020, 2019 and 2018, the Company received $1.9 million, $0.3 million and $0.7 million, respectively, in cash from stock option exercises. Current tax benefits of $0.2 million, $0.1 million and $0.1 million were recognized for these exercises during the years ended December 31, 2020, 2019 and 2018, respectively. Additionally, during the years ended December 31, 2020, 2019 and 2018, the Company received 13,237, 12,450 and 6,894 shares, respectively, of its common stock as payment of the exercise price in the exercise of stock options for 19,232, 33,172 and 26,234 shares, respectively, of its common stock. As of December 31, 2020, the Company had $0.6 million in unrecognized compensation related to nonvested stock options to be recognized over the remaining weighted average vesting period of 1.0 years.
A summary of stock-settled SARs transactions during the year ended December 31, 2020 follows:
|  |  |  |  |  |  |  |  |  |  | Weighted Average |  |  |  | Aggregate |
|  |  | No. of |  |  |  | Weighted Average |  |  |  | Remaining Life |  |  |  | Intrinsic Value |
|  |  | Shares |  |  |  | Exercise Price |  |  |  | (in years) |  |  |  | (in thousands) |
Outstanding, January 1, 2020 |  |  | 206,700 |  |  | $ | 18.67 |  |  |  | 2.04 |  |  | $ | - |
Granted |  |  | 225,625 |  |  |  | 10.08 |  |  |  |  |  |  |  |  |
Exercised |  |  | (46,696 | ) |  |  | 16.46 |  |  |  |  |  |  |  |  |
Lapsed or cancelled |  | (68,501) |  |  |  | 15.97 |  |  |  |  |  |  |  |  |
Outstanding, December 31, 2020 |  |  | 317,128 |  |  |  | 13.47 |  |  |  | 3.36 |  |  |  | 2,031 |
Exercisable, December 31, 2020 |  |  | 79,372 |  |  |  | 20.42 |  |  |  | 1.56 |  |  |  | 238 |
SARs exercised during the years ended December 31, 2020 and 2018 had intrinsic values of $0.3 million and $0.1 million, respectively. There were no SARs exercised during the year ended December 31, 2019. Current tax benefits of $0.1 million were recognized for these exercises during each of the years ended December 31, 2020 and 2018. As of December 31, 2020, the Company had $0.2 million in unrecognized compensation related to nonvested SARs to be recognized over the remaining weighted average vesting period of 0.9 years. Restricted Stock The Company has granted restricted stock to directors and certain employees which vest at a specified future date, generally after three years, or when certain conditions are met. The shares are subject to accelerated vesting under certain circumstances as outlined in the 2013 Plan. Expense for each of these grants is based on the fair value at the date of the grant and is being recognized on a straight-line basis over the respective service period.
A summary of restricted stock transactions during the year ended December 31, 2020 follows:
|  |  |  |  |  | Weighted Average |
|  | No. of |  |  | Grant Date |
|  | Shares |  |  | Fair Value |
Outstanding, January 1, 2020 |  |  | 151,166 |  |  | $ | 18.44 |
Granted |  |  | 67,204 |  |  |  | 13.52 |
Vested |  |  | (43,706 | ) |  |  | 18.30 |
Forfeited |  |  | (17,420 | ) |  |  | 14.24 |
Outstanding, December 31, 2020 |  |  | 157,244 |  |  |  | 16.84 |
As of December 31, 2020, the Company had $1.2 million of unrecognized compensation cost related to nonvested restricted stock grants expected to be recognized over the remaining weighted average vesting period of 1.6 years. Performance Shares Certain employees received service-based or service-based and performance-based shares, to which we collectively refer to as performance shares. The service-based awards vest after the service period is met, which is generally three to five years. Expense for these grants is based on the fair value on the date of the grant and is being recognized on a straight-line basis over the respective service period. The performance-based shares generally vest after five years if the performance and service targets are met. The Company evaluates the performance conditions associated with these grants each reporting period to determine the expected number of shares to be issued. Expenses for grants of performance shares are recognized on a straight-line basis over the respective service period based on the grant date fair value and expected number of shares to be issued. The awards are subject to accelerated vesting under certain circumstances as outlined in the 2013 Plan.
A summary of performance share transactions during the year ended December 31, 2020 follows:
|  |  |  |  |  | Weighted Average |
|  | No. of |  |  | Grant Date |
|  | Shares |  |  | Fair Value |
Outstanding, January 1, 2020 |  |  | 194,012 |  |  | $ | 19.77 |
Granted |  |  | 25,000 |  |  |  | 12.00 |
Vested |  |  | (5,892 | ) |  |  | 16.97 |
Forfeited |  |  | (26,856 | ) |  |  | 23.46 |
Outstanding, December 31, 2020 |  |  | 186,264 |  |  |  | 18.28 |
As of December 31, 2020, the Company had $1.2 million of unrecognized compensation cost related to nonvested performance share grants expected to be recognized over the remaining weighted average service period of 1.1 years.

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