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Note 6 - Share-based Compensation

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

NOTE 6 – Share-Based Compensation:

Share-based compensation expense 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 for the periods presented (in thousands):

		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Stock options and SARs		$	289			$	319			$	784			$	1,018
Restricted stock			582				599				1,550				1,956
Performance shares			414				185				571				549
Total share-based compensation expense		$	1,285			$	1,103			$	2,905			$	3,523

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.

All stock options and SARs vest between one and three 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. Stock options, as well as SARs granted in tandem with stock options, are subject to accelerated vesting under certain circumstances as outlined in the 2013 Incentive Stock and Awards Plan (the “2013 Plan”) or 2022 Equity Incentive and Awards Plan (the “2022 Plan”), as applicable.

A summary of stock option transactions during the nine months ended September 30, 2024 follows:

										Weighted Average				Aggregate
		No. of				Weighted Average				Remaining Life				Intrinsic Value
		Shares				Exercise Price				(in years)				(in thousands)
Outstanding, January 1, 2024			953,176			$	14.73				2.80			$	1,718
Granted⁽¹⁾			183,800				14.38
Exercised			(122,395	)			10.71
Lapsed or cancelled			(199,984	)			16.49
Outstanding, September 30, 2024			814,597				14.82				3.26				2,165
Exercisable, September 30, 2024			341,469				18.59				2.22				494

⁽¹⁾	The weighted average grant date fair value of stock options granted was $4.27 per share.

As of September 30, 2024, the Company had $0.8 million in unrecognized compensation cost related to nonvested stock options to be recognized over the remaining weighted average vesting period of 1.0 year.

A summary of stock-settled SARs transactions during the nine months ended September 30, 2024 follows:

										Weighted Average				Aggregate
		No. of				Weighted Average				Remaining Life				Intrinsic Value
		Shares				Exercise Price				(in years)				(in thousands)
Outstanding, January 1, 2024			292,508			$	14.35				2.07			$	506
Granted⁽¹⁾			79,128				13.84
Exercised			(17,920	)			8.48
Lapsed or cancelled			(81,770	)			19.23
Outstanding, September 30, 2024			271,946				13.12				2.34				832
Exercisable, September 30, 2024			137,742				13.37				0.79				479

⁽¹⁾	The weighted average grant date fair value of SARs granted was $3.80 per share.

As of September 30, 2024, the Company had $0.3 million in unrecognized compensation cost related to nonvested SARs to be recognized over the remaining weighted average vesting period of 1.0 year.

Restricted Stock

The Company has granted shares of restricted stock to directors and certain employees, which vest at a specified future date, generally after three years, over five years or when certain conditions are met. The shares are subject to accelerated vesting under certain circumstances as outlined in the 2013 Plan or 2022 Plan, as applicable. 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 nine months ended September 30, 2024 follows:

						Weighted Average
		No. of				Grant Date
		Shares				Fair Value
Outstanding, January 1, 2024			428,366			$	18.14
Granted			146,303				14.77
Vested			(79,322	)			23.71
Forfeited			(34,029	)			19.75
Outstanding, September 30, 2024			461,318				15.99

As of September 30, 2024, the Company had $3.8 million of unrecognized compensation cost related to nonvested restricted stock grants expected to be recognized over the remaining weighted average vesting period of 1.7 years.

Performance Shares

The Company has granted performance shares, which either contain only service-based vesting conditions or service-based and performance-based vesting conditions. 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 awards 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. Expense for grants of performance shares is 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 on a pro rata basis under certain circumstances as outlined in the 2013 Plan or 2022 Plan, as applicable, except in those circumstances in which award agreements or change in control agreements specify full vesting.

On May 1, 2024, the Compensation Committee approved the Company entering into a grant of 125,000 and 75,000 performance shares to Michael Benstock, Chief Executive Officer and Michael Koempel, Chief Financial Officer, respectively, under the 2022 Equity Incentive and Awards Plan. The performance shares agreements were executed on May 6, 2024. Each performance share represents a contingent right to receive one share of common stock. The performance shares will vest if, in each case and during a four-year performance period beginning on January 1, 2024, subject to additional requirements, the average closing price of the Company’s common stock over a rolling thirty (30) day period equals or exceeds 115%, 130%, and 150% of the closing share price on May 10, 2024 and the executive is still employed by the Company twelve (12) months after the applicable stock price condition has been satisfied. The fair value and derived service periods of the shares were determined based on a Monte Carlo valuation model, which includes estimates of the Company’s stock price volatility. Expense for these grants is being recognized on a straight-line basis over each tranche’s derived service period.

A summary of performance share transactions during the nine months ended September 30, 2024 follows:

						Weighted Average
		No. of				Grant Date
		Shares				Fair Value
Outstanding, January 1, 2024			283,521			$	18.13
Granted			200,000				14.73
Vested			(14,068	)			17.77
Forfeited			(99,439	)			19.62
Outstanding, September 30, 2024			370,014				15.91

As of September 30, 2024, the Company had $2.5 million of unrecognized compensation cost related to nonvested performance share grants expected to be recognized over the remaining weighted average service period of 1.5 years.