Note E - Stock-based Compensation

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Compensation and Employee Benefit Plans [Text Block]

NOTE E: STOCK-BASED COMPENSATION

The Company has maintained a stock incentive plan (the “Plan”) under which incentive and nonqualified stock options and other stock awards may be granted. Under the Plan, 3,000,000 shares were reserved for the issuance of stock awards to directors, officers, key employees, and others. The stock option exercise price and the restricted stock value under the Plan shall not be less than 85% of the fair market value of the Company’s common stock on the date the award is granted. The fair market value is determined by the closing price of the Company’s common stock, on its primary exchange, on the same date that the option or award is granted. This Plan expired on March 13, 2024, and no further grants may be made under the Plan. All outstanding unvested awards granted under the Plan, however, remain subject to the terms and conditions of the Plan. On February 15, 2024, the Company’s Board of Directors adopted a new 2024 Equity Incentive Plan (the “2024 Plan”), under which 1,600,000 shares are reserved for issuance of stock awards to employees, officers, directors, consultants and advisors of the Company. The 2024 Plan is subject to and will become effective upon approval by the Company’s shareholders at its upcoming annual meeting of shareholders.

During May 2024, the Company issued 2,130 unrestricted shares of common stock to non-employee directors. These shares had a grant date fair value of $17.60 per share, based on the closing price of the Company’s stock on the date of issuance.

The total grant date fair value of stock vested during the first nine months of 2024 was approximately $928,000. The total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits during the first nine months of 2024, was approximately $550,000 and includes approximately $38,000 recognized as a result of the issuance of shares to certain non-employee directors. The recognition of stock-based compensation expense decreased both diluted and basic earnings per common share by approximately $0.02 during the first nine months of 2024. As of September 30, 2024, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $1,536,000, which is being amortized on a straight-line basis over the remaining vesting period. As a result, the Company expects to recognize approximately $186,000 in additional compensation expense related to unvested stock awards during the remainder of 2024 and to recognize approximately $741,000, $476,000, and $133,000 in additional compensation expense related to unvested stock awards during the years 2025, 2026, and 2027, respectively.

The total grant date fair value of stock vested during the first nine months of 2023 was approximately $576,000. The total pre-tax stock-based compensation expense, recognized in salaries, wages and benefits during the first nine months of 2023, was approximately $387,000 and includes approximately $55,000 recognized as a result of the grant of shares to certain non-employee directors. The recognition of stock-based compensation expense decreased both diluted and basic earnings per common share by approximately $0.01 during the first nine months of 2023. As of  September 30, 2023, the Company had stock-based compensation plans with total unvested stock-based compensation expense of approximately $2,687,000, which was being amortized on a straight-line basis over the remaining vesting period.

A summary of the status of the Company’s non-vested restricted stock as of September 30, 2024, and changes during the nine months ended September 30, 2024, is as follows:

	Restricted Stock
	Number of Shares			Weighted- Average Grant Date Fair Value
Non-vested at January 1, 2024		198,859		$	14.07
Granted		2,130			17.60
Canceled/forfeited/expired		(2,633	)		32.63
Vested		(68,015	)		13.64
Non-vested at September 30, 2024		130,341		$	13.98