Note 16 - Stock-based Compensation Plan

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

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

(16)

         

STOCK-BASED COMPENSATION PLAN

On

May

20,

2009,

the Company adopted the

2009

Equity Incentive Plan (the “Plan”). The Plan provides for the award of stock options, restricted stock, performance shares and stock appreciation rights. The aggregate number of shares of the Company’s common stock available for issuance under the Plan

may

not exceed

223,000

shares. At

December

31,

2016,

204,000

shares of the Company’s common stock were available for issuance under the Plan.

The Company

may

grant both non-statutory and statutory stock options which

may

not have a term exceeding

ten

years. In the case of incentive stock options, the aggregate fair value of the stock (determined at the time the incentive stock option is granted) for which any optionee

may

be granted incentive options which are

first

exercisable during any calendar year shall not exceed

$100,000.

Option prices

may

not be less than the fair market value of the underlying stock at the date of the grant. An award of a performance share is a grant of a right to receive shares of the Company’s common stock which is contingent upon the achievement of specific performance criteria or other objectives set at the grant date. Stock appreciation rights are equity or cash settled share-based compensation arrangements whereby the number of shares that will ultimately be issued or the cash payment is based upon the appreciation of the Company’s common stock. Awards granted under the Plan

may

be granted either alone, in addition to, or in tandem with, any other award granted under the Plan. The terms of the plan also include provisions whereby all unearned options and restricted shares become immediately exercisable and fully vested upon a change in control.

The fair market value of stock options granted is estimated at the date of grant using an option pricing model. Expected volatilities are based on historical volatility of the Company's stock. The expected term of options granted represents the period of time that options are expected to be outstanding and is based on historical trends. The risk free rate for the expected life of the options is based on the U.S. Treasury yield curve in effect at the time of grant. As of

December

31,

2016,

no stock options had been granted under the Plan.

On

February

17,

2015,

the Company granted

19,500

restricted stock shares to directors, officers and key employees at a grant-date price of

$24.50

per share for a total of

$478,000.

The restricted stock generally vests over a

five

-year period. Compensation expense is measured based on the fair market value of the restricted stock at the grant date and is recognized ratably over the period during which the shares are earned (the vesting period). Compensation expense related to restricted stock recognized for the years ended

December

31,

2016

and

2015

was

$82,000

and

$71,000,

respectively. A summary of the Company’s nonvested restricted shares activity as of

December

31,

2016

and changes during the year then ended is as follows:

	Number of Shares		Weighted Average Grant-Date Fair Value
Nonvested at beginning of year		18,000	$	24.50
Granted		-		-
Vested		4,000		24.50
Forfeited		-		-
Nonvested at end of year		14,000	$	24.50

The total fair value of restricted shares that vested during the year ended

December

31,

2016

was

$132,000.

At

December

31,

2016,

unrecognized compensation expense related to nonvested restricted shares was

$300,000.

The compensation expense is expected to be recognized over the remaining vesting period of

3.5

years.