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Note 9 - Stock-based Compensation

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Text Block]

9. Stock-Based Compensation

On January 31, 2019, the Board of Directors approved a 2019 long-term incentive compensation program for certain Company executive officers that includes grants of performance-based restricted stock units (“PRSUs”) in addition to time-based restricted stock units (“RSU”). Under the terms of the PRSU Agreement, the number of PRSUs that may be earned depends on the extent to which performance goals for the award are achieved over a 3-year performance period, as determined by the Compensation Committee of the Board. The number of PRSUs that may be earned ranges from 0% to 150% of the target award, with no PRSUs earned for below threshold-level performance, 50% of PRSUs earned for threshold-level performance, 100% of PRSUs earned for target-level performance, and 150% of PRSUs earned for maximum-level performance.

For the three months ended June 30, 2019 and 2018, the Company’s net income, as reported, included $1.4 million and $1.2 million, respectively, of stock-based compensation costs and $0.3 million and $0.3 million of income tax benefits, respectively, related to the stock-based compensation plans in each of the periods. For the six months ended June 30, 2019 and 2018, the Company’s net income, as reported, includes $5.4 million and $4.6 million, respectively, of stock-based compensation costs and $1.3 million and $1.0 million of income tax benefits, respectively, related to the stock-based compensation plans in each of the periods. During the six months ended June 30, 2019, the Company granted 263,574 and 57,870 in RSU awards and PRSU awards, respectively. During the three months ended June 30, 2019, the Company did not grant any RSU or PRSU awards. During the three and six months ended June 30, 2018, the Company granted 5,600 and 280,590 RSU awards, respectively. The Company has not granted stock options since 2009 and at June 30, 2019, had none outstanding.

The Company uses the fair value of the common stock on the date of award to measure compensation cost for restricted stock unit awards. Compensation cost is recognized over the vesting period of the award using the straight-line method.

The following table summarizes the Company’s RSU and PRSU awards at or for the six months ended June 30, 2019:

	RSU Awards					PRSU Awards
				Weighted-Average					Weighted-Average
				Grant-Date					Grant-Date
	Shares			Fair Value		Shares			Fair Value

Non-vested at December 31, 2018		502,658		$	24.93		-		$	-
Granted		263,574			22.38		57,870			22.38
Vested		(259,329	)		23.24		(27,110	)		22.38
Forfeited		(21,545	)		24.81		-			-
Non-vested at June 30, 2019		485,358		$	24.45		30,760		$	22.38

Vested but unissued at June 30, 2019		218,778		$	24.64		21,310		$	22.38

As of June 30, 2019, there was $10.0 million of total unrecognized compensation cost related to RSU and PRSU awards granted. That cost is expected to be recognized over a weighted-average period of 3.6 years. The total fair value of awards vested for the three months ended June 30, 2019 and 2018 was $0.2 million and $28,000, respectively. The total fair value of awards vested for the six months ended June 30, 2019 and 2018 was $6.2 million and $6.7 million, respectively. The vested but unissued RSU awards consist of awards made to employees and directors who are eligible for retirement. According to the terms of these awards, which provide for vesting upon retirement, these employees and directors have no risk of forfeiture. These shares will be issued at the original contractual vesting and settlement dates.

Phantom Stock Plan: The Company maintains a non-qualified phantom stock plan as a supplement to its profit sharing plan for officers who have achieved the designated level and completed 1 year of service. The Company adjusts its liability under this plan to the fair value of the shares at the end of each period.

The following table summarizes the Phantom Stock Plan at or for the six months ended June 30, 2019:

Phantom Stock Plan	Shares			Fair Value

Outstanding at December 31, 2018		99,313		$	21.53
Granted		9,175			22.15
Distributions		(1,012	)		22.00
Outstanding at June 30, 2019		107,476		$	22.20
Vested at June 30, 2019		106,929		$	22.20

The Company recorded stock-based compensation expense (benefit) for the Phantom Stock Plan of $0.1 million and ($0.1) for the three months ended June 30, 2019 and 2018, respectively. The total fair value of the distributions from the Phantom Stock Plan was less than $1,000 for each of the three months ended June 30, 2019 and 2018, respectively.

The Company recorded stock-based compensation expense (benefit) for the Phantom Stock Plan of $0.1 million and ($0.1) million for the six months ended June 30, 2019 and 2018, respectively. The total fair value of the distributions from the Phantom Stock Plan was $22,000 and $1,000 for the six months ended June 30, 2019 and 2018, respectively.