The Company’s stock-based compensation plans include the 2019 Equity Incentive Plan for employees and certain non-employees, including non-employee directors, and the Deferred Compensation Plan for certain eligible employees. The Company issues common stock and uses treasury stock to satisfy stock option exercises or vesting of stock awards.

The following table summarizes the stock-based compensation expense (primarily in the Americas) and income tax benefits related to the stock-based compensation, both plan and non-plan related (in thousands):

	Years Ended December 31,
	2019			2018			2017
Stock-based compensation (expense) ⁽¹⁾	$	(7,396	)	$	(7,543	)	$	(7,621	)
Income tax benefit ⁽²⁾		1,775			1,810			2,858

There were no capitalized stock-based compensation costs as of December 31, 2019, 2018 and 2017.

2019 Equity Incentive Plan — The Company’s Board of Directors (the “Board”) adopted the Sykes Enterprises, Incorporated 2019 Equity Incentive Plan (the "2019 Plan”) on March 12, 2019. The 2019 Plan was approved by the shareholders at the May 2019 annual shareholders meeting. The 2019 Plan replaced and superseded the Company’s 2011 Equity Incentive Plan (the “2011 Plan”). The outstanding awards granted under the 2011 Plan will remain in effect until their exercise, expiration or termination. The 2019 Plan provides for the grant of awards with respect to a maximum of 4.0 million shares of common stock, plus any shares of common stock that expire, terminate or are cancelled or forfeited under the terms of the 2011 Plan. The 2019 Plan permits the grant of restricted stock, stock appreciation rights, stock options and other stock-based awards to certain employees of, and certain non-employees who provide services to, the Company.

In the event of a change in control, except as may otherwise be provided in an award agreement, the outstanding 2019 Plan awards vesting upon the passage of time (e.g., employment-based) will be accelerated, and all awards vesting upon the attainment of performance goals will be deemed achieved at 100% of target and all other restrictions applicable to outstanding awards will lapse, provided that the participant is employed by the Company on the date of the change in control.

Stock Appreciation Rights — Stock-settled stock appreciation rights (“SARs”) represent the right to receive, without payment to the Company, a certain number of shares of common stock equal to the amount by which the fair market value of a share of common stock at the time of exercise exceeds the grant price.

The SARs are granted at the fair market value of the Company’s common stock on the date of the grant and vest ratably over a three-year period following the date of grant, provided the participant is employed by the Company on such date. The SARs have a term of 10 years from the date of grant.

All currently outstanding SARs are exercisable within three months after the death, disability, retirement or termination of the participant’s employment with the Company, if and to the extent the SARs were exercisable immediately prior to such termination. If the participant’s employment is terminated for cause, or the participant terminates his or her own employment with the Company, any portion of the SARs not yet exercised (whether or not vested) terminates immediately on the date of termination of employment.

The fair value of each SAR is estimated on the date of grant using the Black-Scholes valuation model that uses various assumptions. The fair value of the SARs is expensed on a straight-line basis over the requisite service period. Expected volatility is based on the historical volatility of the Company’s stock. The risk-free rate for periods within the contractual life of the award is based on the yield curve of a zero-coupon U.S. Treasury bond on the date the award is granted with a maturity equal to the expected term of the award. Exercises and forfeitures are estimated within the valuation model using employee termination and other historical data. The expected term of the SARs granted represents the period of time the SARs are expected to be outstanding.

The following table summarizes the assumptions used to estimate the fair value of SARs granted (none in 2019):

	Years Ended December 31,
	2018			2017
Expected volatility		21.4	%		19.3	%
Weighted-average volatility		21.4	%		19.3	%
Expected dividend rate		0.0	%		0.0	%
Expected term (in years)		5.0			5.0
Risk-free rate		2.5	%		1.9	%

The following table summarizes SARs activity as of December 31, 2019 and for the year then ended:

Stock Appreciation Rights	Shares (000s)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (000s)
Balance at the beginning of the period		962		$	—
Granted		—		$	—
Exercised		(582	)	$	—
Forfeited or expired		(40	)	$	—
Balance at the end of the period		340		$	—		7.8	$	2,874
Vested or expected to vest at the end of the period		340		$	—		7.8	$	2,874
Exercisable at the end of the period		61		$	—		7.0	$	523

The following table summarizes information regarding SARs granted and exercised (in thousands, except per SAR amounts):

	Years Ended December 31,
	2019		2018		2017
Number of SARs granted		—		333		396
Weighted average grant-date fair value per SAR	$	—	$	6.84	$	6.24
Intrinsic value of SARs exercised	$	4,893	$	320	$	1,763
Fair value of SARs vested	$	2,053	$	1,950	$	1,846

The following table summarizes nonvested SARs activity as of December 31, 2019 and for the year then ended:

Nonvested Stock Appreciation Rights	Shares (000s)			Weighted Average Grant-Date Fair Value
Balance at the beginning of the period		618		$	6.74
Granted		—		$	—
Vested		(299	)	$	6.85
Forfeited or expired		(40	)	$	6.63
Balance at the end of the period		279		$	6.63

As of December 31, 2019, there was $0.9 million of total unrecognized compensation cost, net of actual forfeitures, related to nonvested SARs. This cost is expected to be recognized over a weighted average period of 1.1 years.

Restricted Shares and Restricted Stock Units – The Company awards performance and employment-based restricted shares (“restricted shares”) and/or restricted stock units (“RSUs”) to eligible participants. The restricted shares are shares of the Company’s common stock (or in the case of RSUs, represent an equivalent number of shares of the Company’s common stock) which are issued to the participant subject to (a) restrictions on transfer for a period of time and (b) forfeiture under certain conditions.

For performance-based awards, the performance goals, including revenue growth and income from operations targets, provide a range of vesting possibilities from 0% to 100% and will be measured at the end of the three-year performance period. If the performance goals are met for the performance period, the shares will vest and all restrictions on the transfer of the restricted shares will lapse (or in the case of RSUs, an equivalent number of shares of the Company’s common stock will be issued to the recipient). The Company recognizes compensation cost, net of actual forfeitures, based on the fair value (which approximates the current market price) of the restricted shares and RSUs on the date of grant ratably over the requisite performance period based on the probability of achieving the performance goals. Changes in the probability of achieving the performance goals from period to period will result in corresponding changes in compensation expense.

Employment-based restricted shares and RSUs vest ratably over a three-year period following the date of grant, provided the participant is employed by the Company on such date. The Company recognizes compensation cost, net of actual forfeitures, based on the fair value (which approximates the current market price) of the restricted shares and RSUs on the date of grant ratably over the requisite service period.

If the participant’s employment with the Company is terminated for any reason, either by the Company or participant, prior to the date on which the restricted shares have vested and the restrictions have lapsed with respect to such vested shares, any restricted shares remaining subject to the restrictions (together with any dividends paid thereon) will be forfeited, unless there has been a change in control prior to such date.

The following table summarizes nonvested restricted shares/RSUs activity as of December 31, 2019 and for the year then ended:

Nonvested Restricted Shares and RSUs	Shares (000s)			Weighted Average Grant-Date Fair Value
Balance at the beginning of the period		1,144		$	29.15
Granted		508		$	28.43
Vested		(123	)	$	29.67
Forfeited or expired		(381	)	$	29.65
Balance at the end of the period⁽¹⁾		1,148		$	28.61

The following table summarizes information regarding restricted shares/RSUs granted and vested (in thousands, except per restricted share/RSU amounts):

	Years Ended December 31,
	2019		2018		2017
Number of restricted shares/RSUs granted		508		492		480
Weighted average grant-date fair value per restricted share/RSU	$	28.43	$	28.16	$	29.42
Fair value of restricted shares/RSUs vested	$	3,647	$	8,342	$	6,868

As of December 31, 2019, based on the probability of achieving the performance goals, there was $6.1 million of total unrecognized compensation cost, net of actual forfeitures, related to nonvested restricted shares/RSUs. Of the unrecognized compensation cost, 33% related to performance-based nonvested restricted shares/RSUs and 67% related to employment-based nonvested restricted shares/RSUs. This cost is expected to be recognized over a weighted average period of 2.0 years.

Non-Employee Director Compensation — The Company does not have a formal, written compensation plan for non-employee directors. Subsequent to the expiration of its 2004 Non-Employee Director Fee Plan, the Board, upon recommendation of the Compensation Committee, determined that the Company’s non-employee directors would continue to receive a combination of cash and equity grants on an annual basis. The amount of the cash and equity grants are determined annually by the Board, and the stock portion of such compensation is issued under the Company’s 2019 Plan.

Currently, all new non-employee directors joining the Board receive an initial grant of shares of common stock on the date the new director is elected or appointed, the number of which is determined by dividing $60,000 by the closing price of the Company’s common stock on the trading day immediately preceding the date a new director is elected or appointed, rounded to the nearest whole number of shares. The initial grant of shares vests in twelve equal quarterly installments, one-twelfth on the date of grant and an additional one-twelfth on each successive third monthly anniversary of the date of grant. The award lapses with respect to all unvested shares in the event the non-employee director ceases to be a director of the Company, and any unvested shares are forfeited.

Additionally, the current compensation structure approved by the Board, upon recommendation of the Compensation Committee, provides that each non-employee director receives, on the day after the annual shareholders meeting, an annual retainer for service as a non-employee director (the “Annual Retainer”). The total value of the Annual Retainer is $170,000, of which $70,000 is payable in cash, and the remainder is paid in stock, the amount of which is determined by dividing $100,000 by the closing price of the Company’s common stock on the date of the annual shareholders’ meeting. The annual grant of shares paid to non-employee directors vests in four equal quarterly installments, one-fourth on the date of grant and an additional one-fourth on each successive third monthly anniversary of the date of grant). The award lapses with respect to all unpaid cash and unvested shares in the event the non-employee director ceases to be a director of the Company, and any unvested shares and unpaid cash are forfeited.

The following table summarizes nonvested common stock share award activity as of December 31, 2019 and for the year then ended:

Nonvested Common Stock Share Awards	Shares (000s)			Weighted Average Grant-Date Fair Value
Balance at the beginning of the period		9		$	27.72
Granted		34		$	25.41
Vested		(32	)	$	25.99
Forfeited or expired		—		$	—
Balance at the end of the period		11		$	25.61

The following table summarizes information regarding common stock share awards granted and vested (in thousands, except per share award amounts):

	Years Ended December 31,
	2019		2018		2017
Number of share awards granted		34		34		24
Weighted average grant-date fair value per share award	$	25.41	$	27.68	$	32.93
Fair value of share awards vested	$	840	$	880	$	850

As of December 31, 2019, there was $0.2 million of total unrecognized compensation costs, net of actual forfeitures, related to nonvested common stock share awards. This cost is expected to be recognized over a weighted average period of 0.8 years.

Deferred Compensation Plan — The Company’s non-qualified Deferred Compensation Plan (the “Deferred Compensation Plan”), which is not shareholder-approved, was adopted by the Board effective December 17, 1998. It was last amended and restated on August 15, 2017, effective January 1, 2018. Eligibility is limited to a select group of key management and employees who are expected to receive an annualized base salary (which will not take into account bonuses or commissions) that exceeds the amount taken into account for purposes of determining highly compensated employees under Section 414(q) of the Internal Revenue Code of 1986 based on the current year’s base salary and applicable dollar amounts. The Deferred Compensation Plan provides participants with the ability to defer between 1% and 80% of their compensation (between 1% and 100% prior to June 30, 2016, the effective date of the first amendment) until the participant’s retirement, termination, disability or death, or a change in control of the Company. Using the Company’s common stock, the Company matches 50% of the amounts deferred by participants on a quarterly basis up to a total of $5,000 to $12,000 per year, depending on the participant’s eligible category. Matching contributions and the associated earnings vest over a seven-year service period. Vesting will be accelerated in the event of the participant’s death or disability, retirement or a change in control. In the event of a distribution of benefits resulting from a change in control of the Company, the Company will increase the benefit by an amount sufficient to offset the income tax obligations created by the distribution of benefits. Deferred compensation amounts used to pay benefits, which are held in a rabbi trust, include investments in various mutual funds and shares of the Company’s common stock (see Note 13, Investments Held in Rabbi Trust).

As of December 31, 2019 and 2018, liabilities of $13.9 million and $11.4 million, respectively, of the Deferred Compensation Plan were recorded in “Accrued employee compensation and benefits” in the accompanying Consolidated Balance Sheets. Additionally, the Company’s common stock match associated with the Deferred Compensation Plan, with a carrying value of approximately $2.5 million and $2.4 million at December 31, 2019 and 2018, respectively, is included in “Treasury stock” in the accompanying Consolidated Balance Sheets.

The following table summarizes nonvested common stock activity as of December 31, 2019 and for the year then ended:

Nonvested Common Stock	Shares (000s)			Weighted Average Grant-Date Fair Value
Balance at the beginning of the period		8		$	29.01
Granted		16		$	29.10
Vested		(11	)	$	28.89
Forfeited or expired		(2	)	$	29.16
Balance at the end of the period		11		$	29.24

The following table summarizes information regarding shares of common stock granted and vested (in thousands, except per common stock amounts):

	Years Ended December 31,
	2019		2018		2017
Number of shares of common stock granted		16		16		13
Weighted average grant-date fair value per common stock	$	29.10	$	28.48	$	30.49
Fair value of common stock vested	$	320	$	315	$	334
Cash used to settle the obligation	$	366	$	804	$	1,134

As of December 31, 2019, there was $0.2 million of total unrecognized compensation cost, net of actual forfeitures, related to nonvested common stock. This cost is expected to be recognized over a weighted average period of 4.2 years.

Acquisition-Related Restricted Shares – In conjunction with the Company’s acquisition of Symphony on November 1, 2018, the Company granted RSUs to certain of Symphony’s owners. These RSUs were issued from the Company’s pool of authorized but unissued common stock. See Note 4, Acquisitions, for further information.

The Company recognizes compensation cost, net of actual forfeitures, based on the fair value (which approximates the current market price) of the RSUs on the date of grant ratably over the requisite service period. The RSUs vest one-half on and after each of May 1, 2020 and November 1, 2021, provided the participant is employed by the Company on such date. In the event of a change in control prior to the date the RSUs vest, all of the RSUs will vest and the restrictions on transfer will lapse with respect to such vested shares on the date of the change in control, provided that participant is employed by the Company on the date of the change in control.

If the participant’s employment with the Company is terminated for any reason, either by the Company or participant, prior to the date on which the RSUs have vested and the restrictions have lapsed with respect to such vested shares, any RSUs remaining subject to the restrictions (together with any dividends paid thereon) will be forfeited, unless there has been a change in control prior to such date.

The following table summarizes nonvested acquisition-related RSUs activity as of December 31, 2019 and for the year then ended:

Nonvested Restricted Shares and RSUs	Shares (000s)			Weighted Average Grant-Date Fair Value
Balance at the beginning of the period		124		$	30.67
Granted		—		$	—
Vested		(36	)	$	30.67
Forfeited or expired		—		$	—
Balance at the end of the period		88		$	30.67

During the third quarter of 2019, the Company accelerated the vesting of certain of the acquisition-related RSUs in conjunction with the departure of one of Symphony’s executives from the Company.

The following table summarizes information regarding acquisition-related RSUs granted and vested (none in 2017) (in thousands, except per restricted share/RSU amounts):

	Years Ended December 31,
	2019		2018
Number of restricted shares/RSUs granted		—		124
Weighted average grant-date fair value per restricted share/RSU	$	—	$	30.67
Fair value of restricted shares/RSUs vested	$	1,091	$	—

As of December 31, 2019, there was $1.7 million of total unrecognized compensation cost, net of actual forfeitures, related to nonvested acquisition-related RSUs. This cost is expected to be recognized over a weighted average period of 1.8 years.