Note 3 - Stock-Based Compensation

9 Months Ended

Sep. 30, 2013

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

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

Note 3 – Stock-Based CompensatioN

The USA Truck, Inc. 2004 Equity Incentive Plan provides for the granting of incentive or nonqualified options or other equity-based awards covering up to 1,125,000 shares of Common Stock to directors, officers and other key employees. No options were awarded under this 2004 Equity Incentive Plan for less than the fair market value of the Common Stock as defined in the 2004 Equity Incentive Plan at the date of grant. Options granted under the 2004 Equity Incentive Plan generally vest ratably over three to five years. The option price under the 2004 Equity Incentive Plan is the fair market value of our Common Stock at the date the options were granted. The exercise prices of outstanding options granted under the 2004 Equity Incentive Plan range from $2.88 to $22.54 as of September 30, 2013. At September 30, 2013, 557,362 shares were available for future options or other equity awards under this 2004 Equity Incentive Plan. The Company issues new shares upon the exercise of stock options.

Compensation expense related to incentive and nonqualified stock options granted under the Company’s 2004 Equity Incentive Plan is included in salaries, wages and employee benefits in the accompanying consolidated statements of operations. The amount of compensation expense recognized, net of forfeiture recoveries, is reflected in the table below for the periods indicated.

	(in thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Compensation expense	$	16	$	24	$	45	$	62

The table below sets forth the assumptions used to value stock options granted during the periods indicated:

	2013	2012
Dividend yield	0%	0%
Expected volatility	35.6%	29.8	–	64.0%
Risk-free interest rate	1.2%	0.5	–	0.7%
Expected life (in years)	6.25	3.75	–	4.25

The expected volatility is a measure of the expected fluctuation in our share price based on the historical volatility of our stock. The risk-free interest rate is based on an implied yield on United States zero-coupon treasury bonds with a remaining term equal to the expected life of the outstanding options. Expected life represents the length of time we anticipate the options to be outstanding before being exercised. In addition to the above, we also include a factor for anticipated forfeitures, which represents the number of shares under options expected to be forfeited over the expected life of the options.

Information related to option activity for the nine months ended September 30, 2013 is as follows:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (1)
Outstanding - beginning of year		112,151		$	12.54
Granted		42,910			4.83
Exercised		--			--			$	--
Cancelled/forfeited		(9,716	)		5.88
Expired		(30,959	)		15.55
Outstanding at September 30, 2013		114,386		$	9.40		5.0	$	214,069
Exercisable at September 30, 2013		54,584		$	13.17		1.8	$	12,277

(1)   The intrinsic value of outstanding and exercisable stock options is determined based on the amount by which the market value of the underlying stock exceeds the exercise price of the option. The per share market value of our Common Stock, as determined by the closing price on September 30, 2013 (the last trading day of the quarter), was $8.96.

Compensation expense related to restricted stock awarded under the Company’s equity incentive plans is included in salaries, wages and employee benefits in the accompanying consolidated statements of operations. The compensation expense recognized is based on the market value of our Common Stock on the date the restricted stock award is granted and is not adjusted in subsequent periods. The amount to be recognized, net of forfeiture recoveries, is amortized over the vesting period. The amount of compensation expense recognized is reflected in the table below for the periods indicated.

	(in thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Compensation expense	$	132	$	57	$	175	$	104

Information related to the restricted stock awarded under the 2004 Equity Incentive Plan for the nine months ended September 30, 2013, is as follows:

	Number of Shares			Weighted Average Grant Price (1)
Nonvested shares – December 31, 2012		113,458		$	10.35
Granted		155,212			5.18
Forfeited		(21,269	)		8.09
Vested		(24,050	)		5.41
Nonvested shares – September 30, 2013		223,351		$	7.51

(1) The shares were valued at the closing price of the Company’s common stock on the dates of the awards.

On July 16, 2008, the Executive Compensation Committee of the Board of Directors of the Company, pursuant to the 2004 Equity Incentive Plan, granted thereunder awards totaling 200,000 restricted shares of the Company’s Common Stock to certain officers of the Company. The grants were made effective as of July 18, 2008 and were valued at $12.13 per share, which was the closing price of the Company’s Common Stock on that date. Each officer’s restricted shares of Common Stock will vest in varying amounts over the ten year period beginning April 1, 2011, subject to the Company’s attainment of defined retained earnings growth. Management must attain an average five-year trailing retained earnings annual growth rate of 10.0% (before dividends) in order for the shares to qualify for full vesting (pro rata vesting will apply down to 50.0% at a 5.0% annual growth rate). Any shares which fail to vest as a result of the Company’s failure to attain a performance goal will forfeit and result in the recovery of the previously recorded expense. These forfeited shares will revert to the 2004 Equity Incentive Plan where they will remain available for grants under the terms of that Plan until that Plan expires in 2014. During the second quarter of 2011, management determined that the performance criteria would not be met for the shares that were scheduled to vest on April 1, 2012 and April 1, 2013. At that time, these shares were deemed forfeited and recorded as Treasury Stock. During the first quarter of 2013, management determined that it is probable that the performance criteria would not be met for the shares that were scheduled to vest on April 1, 2014, April 1, 2015 and April 1, 2016. Accordingly, the shares remain outstanding until their scheduled vesting dates, at which time their forfeitures become effective and the shares revert to the 2004 Equity Incentive Plan. The table below sets forth the information relating to the forfeitures of these shares.

July 16, 2008 Restricted Stock Award Forfeitures
Scheduled Vest Date	Date Deemed Forfeited and Recorded as Treasury Stock	Shares Forfeited (in thousands)		Expense Recovered (in thousands)		Date Shares Returned to Plan
April 1, 2011	September 30, 2010		9	$	70	April 1, 2011
April 1, 2012	September 30, 2011		8		66	April 1, 2012
April 1, 2013	September 30, 2011		15		101	April 1, 2013
April 1, 2014	February 28, 2013		9		78	April 1, 2014
April 1, 2015	February 28, 2013		9		65	April 1, 2015
April 1, 2016	February 28, 2013		9		56	April 1, 2016

On January 30, 2013, the Executive Compensation Committee of the Company’s Board of Directors approved Restricted Stock Awards (“RSAs”) to certain officers and employees of the Company in an amount equal to a percentage of the recipient’s annual salary.  The value of the RSAs was based on the closing price of the Company’s Common Stock on the NASDAQ Stock Market on the date of grant, February 1, 2013 ($4.98), and a total of 36,961 restricted shares were issued.  The shares were issued from the Company’s 2004 Equity Incentive Plan.  The RSAs will vest one-fourth each year beginning February 1, 2014, conditioned on continued employment and certain other forfeiture provisions.  In addition, the Executive Compensation Committee approved the USA Truck, Inc. Management Bonus Plan.  Plan participants, consisting of executive and other key management personnel, will be paid a cash percentage and an equity percentage of their base salaries (payable in restricted stock), corresponding with the achievement of certain levels of consolidated 2013 pretax income.

On February 15, 2013, in connection with his appointment as President and Chief Executive Officer, Mr. John M. Simone was awarded 75,000 shares of restricted stock, with a grant date of February 18, 2013, to vest in equal 25% installments over four years, beginning February 18, 2014. He was also awarded 42,910 non-qualified stock options with an exercise price of $4.83, which was the closing price of the Company's Common Stock February 19, 2013, the date of grant, to vest in equal 25% installments over four years, beginning February 18, 2014. Both awards are conditioned on continued employment and certain other forfeiture provisions.

On May 8, 2013, the Executive Compensation Committee of the Company’s Board of Directors granted RSAs to each non-employee member of the Company’s Board of Directors.  The awards were part of a change in the Directors’ compensation plan, which included an elimination of Directors’ Board meeting fees.  The value of the RSAs was based on the closing price of the Company’s Common Stock on the NASDAQ Stock Market on May 8, 2013 ($6.00) and a total of 30,830 restricted shares were awarded. The shares were granted from the Company’s 2004 Equity Incentive Plan. The RSAs will vest upon the date of the 2014 Annual Shareholders’ Meeting. 

Information set forth in the following table is related to stock options and restricted stock as of September 30, 2013.

	(in thousands, except weighted average data)
	Stock Options		Restricted Stock
Unrecognized compensation expense	$	60	$	324
Weighted average period over which unrecognized compensation expense is to be recognized (in years)		2.2		5.3