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Note 13 - Stock-based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Text Block]

Note 13 – Stock–Based Compensation

NHC recognizes stock–based compensation expense for all stock options granted over the requisite service period using the fair value at the date of grant using the Black–Scholes pricing model. Stock–based compensation totaled $466,000 and $424,000 for the three months ended March 31, 2020 and 2019, respectively. Stock–based compensation is included in “Salaries, wages and benefits” in the interim condensed consolidated statements of operations.

At March 31, 2020, the Company had $4,077,000 of unrecognized compensation cost related to unvested stock–based compensation awards. This unrecognized compensation cost will be amortized over an approximate two-year period.

Stock Options

The following table summarizes the significant assumptions used to value the options granted for the three months ended March 31, 2020 and for the year ended December 31, 2019.

	March 31, 2020		December 31, 2019
Risk–free interest rate		1.40%		2.30%
Expected volatility		16.6%		17.4%
Expected life, in years		1.9		2.3
Expected dividend yield		2.55%		2.73%

The following table summarizes our outstanding stock options for the three months ended March 31, 2020 and for the year ended December 31, 2019.

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value
Options outstanding at January 1, 2019		1,163,381		$	71.16	$	–
Options granted		53,316			77.89		–
Options exercised		(346,168	)		71.57		–
Options cancelled		(85,000	)		72.94		–
Options outstanding at December 31, 2019		785,529			71.24		–
Options granted		57,313			84.46		–
Options exercised		(7,615	)		65.37		–
Options outstanding at March 31, 2020		835,227		$	72.20	$	1,331,000

Options exercisable at March 31, 2020		196,414		$	68.31	$	1,001,000

Options Outstanding March 31, 2020	Exercise Prices			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years
133,958	$52.93	-	$62.78		61.80		1.82
701,269	$72.94	-	$86.48		74.19		2.05
835,227					72.20		2.01