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Stockholders' Equity
3 Months Ended
Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCKHOLDERS' EQUITY
STOCKHOLDERS EQUITY
Stock-Based Compensation Plans
During the three months ended March 31, 2018, we had two stock benefits plans under which restricted stock, stock options and performance awards have been granted or remain outstanding: the Second Amended and Restated 2006 Long-Term Incentive Plan (the “Amended and Restated 2006 Plan”) and the 2017 Omnibus Incentive Plan (the “2017 Plan”). The Amended and Restated 2006 Plan was terminated upon the approval of the 2017 Plan at the annual shareholders meeting on May 17, 2017. The termination of the Amended and Restated 2006 Plan does not affect the awards previously issued and outstanding.
All stock-based plans are administered by the Compensation Committee appointed by our Board of Directors (the “Board”). The 2017 Plan provides for grants of options as non-qualified options or incentive stock options, restricted stock and performance awards. The 2017 Plan expires on May 17, 2027.
The status of each of the plans at March 31, 2018 is as follows (shares in thousands):
 
Shares
Reserved
 
Shares
Available to
Issue
 
Options
Outstanding
 
Performance Awards Outstanding (2)
Amended and Restated 2006 Plan

 

 
1,641

 
303

2017 Plan
1,768

(1) 
1,230

 
223

 
229

      Total
1,768

 
1,230

 
1,864

 
532

 
 
 
 
 
(1)
Amount includes approximately 213,000 shares granted from the Amended and Restated 2006 Plan that were returned to the Company due to cancellations, to pay taxes on restricted stock vestings and to pay option price and taxes on option exercises.
(2)
Performance Awards are reserved at 200% of shares granted which is equal to the maximum payout in shares.

Restricted Stock
During the three months ended March 31, 2018, we issued restricted stock to our leadership team and certain key employees totaling 77,260 shares that vest over a three-year period and had an aggregate grant date market value of approximately $2.0 million. We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for restricted stock awards of $189,000 and $245,000 during the three months ended March 31, 2017 and 2018, respectively.
As of March 31, 2018, we had approximately $2.3 million of total unrecognized compensation costs related to unvested restricted stock awards, which are expected to be recognized over a weighted average period of approximately 2.7 years.
Stock Options
During the three months ended March 31, 2018, we granted 212,853 options to our leadership team and certain key employees at a weighted average exercise price of $25.43. These options will vest in one-fifth increments over a five-year period and have a ten-year term. The fair value of these options was approximately $1.4 million.
The fair value of the options granted were estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:
 
2018
Dividend yield
1.18
%
Expected volatility
27.08
%
Risk-free interest rate
2.65
%
Expected holding period (years)
5.0

Black-Scholes value
$6.38
We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for stock options of approximately $0.5 million during the three months ended March 31, 2017 and 2018.
Performance Awards
During the three months ended March 31, 2018, we granted 113,320 performance awards to our leadership team and certain key employees, payable in shares. These awards will vest (if at all) on December 31, 2022, provided that certain criteria, including but not limited to, Adjusted Consolidated EBITDA (Adjusted Earnings Before Interest Tax Depreciation and Amortization) and Adjusted Consolidated EBITDA Margin performance is achieved and the individual has remained continuously employed by Carriage through such date. The Adjusted Consolidated EBITDA performance represents 50% of the award and the Adjusted Consolidated EBITDA Margin performance represents 50% of the award. The fair value of these performance awards was approximately $2.9 million and was determined by using the stock price on the grant date of $25.43.
We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for performance awards of $55,000 and $276,000 during the three months ended March 31, 2017 and 2018, respectively.
Employee Stock Purchase Plan
During the three months ended March 31, 2018, employees purchased a total of 13,938 shares of common stock through our ESPP at a weighted average price of $22.07 per share. We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for the ESPP totaling approximately $96,000 and $97,000 for the three months ended March 31, 2017 and 2018, respectively.
The fair value of the right (option) to purchase shares under the ESPP is estimated at the date of purchase with the four quarterly purchase dates using the following assumptions:
 
2018
Dividend yield
0.01
%
Expected volatility
20.89
%
Risk-free interest rate
1.44%, 1.61%, 1.72%, 1.83%

Expected life (years)
0.25, 0.50, 0.75, 1.00


Expected volatilities are based on the historical volatility during the previous twelve months of the underlying common stock. The risk-free rate for the quarterly purchase periods is based on the U.S. Treasury yields in effect at the time of the purchase. The expected life of the ESPP grants represents the calendar quarters from the beginning of the year to the purchase date (end of each quarter).
Director Compensation
We recorded stock-based compensation expense, which is included in General, administrative and other expenses, related to annual retainers and restricted stock awards of $90,000 and $84,000 for the three months ended March 31, 2017 and 2018, respectively.
Share Repurchase
On February 25, 2016, our Board approved a share repurchase program authorizing us to purchase up to an aggregate of $25.0 million of our common stock in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). On October 25, 2017, our Board approved a $15.0 million increase in its authorization for repurchases of our common stock in addition to the $25.0 million approved on February 25, 2016, bringing the total authorized repurchase amount to $40.0 million, in accordance with the Exchange Act. At March 31, 2018, we had approximately $26.0 million available for repurchases under this share repurchase program. During the three months ended March 31, 2018, we did not purchase any shares of common stock pursuant to this share repurchase program.
Cash Dividends
On January 25, 2018, our Board declared a dividend of $0.075 per share, totaling approximately $1.2 million, which was paid on March 1, 2018 to record holders of our common stock as of February 12, 2018. For the three months ended March 31, 2017, we paid a quarterly dividend of $0.050 per share, totaling approximately $0.8 million.

Accumulated other comprehensive income
Our components of accumulated other comprehensive income are as follows (in thousands):
 
Accumulated Other Comprehensive Income
Balance at December 31, 2017
$

Decrease in net unrealized gains associated with available-for-sale securities of the trusts
(539
)
Reclassification of net unrealized gain activity attributable to the Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus
539

Balance at March 31, 2018
$