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Stockholders' Equity
12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Stockholders' Equity STOCKHOLDERS’ EQUITY
Share Authorization
We are authorized to issue 80,000,000 shares of common stock, $0.01 per share par value. We had 25,880,362 and 26,020,494 shares issued and outstanding, net of 8,025,339 shares held in treasury at par, at December 31, 2019 and 2020, respectively.
Stock Based Compensation Plans
During the year ended December 31, 2020, we had two stock benefits plans in effect under which stock, 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 2017 Plan expires on May 17, 2027. All stock-based plans are administered by the Compensation Committee appointed by our Board of Directors (the “Board”).
At December 31, 2020, we had 1,782,824 shares available to issue under our 2017 Plan. The termination of the Amended and Restated 2006 Plan does not affect the awards previously issued and outstanding.
Restricted Stock
During the year ended December 31, 2020, we issued restricted stock to certain employees totaling 10,200 shares that vest over a three year period and had an aggregate grant date market value of $0.3 million at a weighted average stock price of $25.00. In 2019, a total of 25,550 shares of restricted stock were awarded with a grant date market value of $0.5 million. In 2018, a total of 86,260 shares of restricted stock were awarded with a grant date market value of $2.2 million.
A summary of the status of unvested restricted stock as of December 31, 2020, and changes during 2020, is presented below: 
Restricted stock awardsSharesWeighted Average
Grant Date
Fair Value
Unvested at January 1, 202069,745 $23.56 
Granted 10,200 25.00 
Vested(34,815)24.26 
Cancelled— — 
Unvested at December 31, 202045,130 $23.34 
We recorded stock-based compensation expense, which is included in Regional and unallocated funeral and cemetery costs and General, administrative and other expenses, for restricted stock awards of $0.8 million, $0.8 million and $0.7 million the years ended December 31, 2018, 2019 and 2020, respectively.
At December 31, 2020, we had $1.1 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 0.9 years.
Stock Options
During the year ended December 31, 2020, we granted 20,000 options to a certain key employee at a weighted average price of $18.02. These options will vest in one-third increments over a three-year period and have a ten-year term. The fair value of these options was $0.1 million. On June 26, 2020, we cancelled 100,000 options in connection with the resignation of our President and Chief Operating Officer.
In 2019, a total of 100,000 stock options were awarded, the fair value of which was $0.6 million. In 2018, a total of 212,940 stock options were awarded, the fair value of which was $1.4 million.
Stock options are granted with an exercise price equal to the closing price of our common stock on the date of grant. All of the options granted and outstanding under this plan have either a seven or ten-year term. We utilize the Black-Scholes option valuation model for estimating the fair value of our stock options. This model allows the use of a range of assumptions related to volatility, risk-free interest rate, expected holding period and dividend yield. The expected volatility utilized in the valuation model is based on the historical volatility of our stock price. The dividend yield and expected holding period are based on historical experience and management's estimate of future events. The risk-free interest rate is derived from the U.S. Treasury yield curve based on the expected life of the option in effect at the time of grant.
The fair values of our stock options were calculated using the following weighted average assumptions, based on the methods described above:
Years Ended December 31,
201820192020
Dividend yield1.18 %1.23 %1.67 %
Expected volatility27.08 %27.45 %38.54 %
Risk-free interest rate2.65 %1.65 %0.25 %
Expected holding period (years)5.05.03.7
Black-Scholes value$6.38$5.70$4.61
A summary of the stock options at and changes during the three years ended December 31, 2020 is presented in the table and narrative below (shares in thousands): 
 Years Ended December 31,
 201820192020
SharesWtd. Avg.
Ex. Price
SharesWtd. Avg.
Ex. Price
SharesWtd. Avg.
Ex. Price
Outstanding at January 1, 20201,934 $20.85 1,523 $21.95 1,078 $23.22 
Granted213 $25.43 100 $24.35 20 $18.02 
Exercised (1)
(459)$17.73 (247)$17.37 (40)$13.72 
Cancelled or expired(165)$25.34 (298)$21.96 (146)$23.97 
Outstanding at December 31, 20201,523 $21.95 1,078 $23.22 912 $23.40 
Exercisable at December 31, 20201,001 $20.29 643 $22.02 668 $22.90 
(1)For the year ended December 31, 2020, 20,000 options were surrendered by employees to pay the option price and taxes related to the option exercises.
The aggregate intrinsic value of the outstanding and exercisable stock options was $7.2 million and $5.6 million at December 31, 2020. The total intrinsic value of options exercised during the years ended December 31, 2018, 2019 and 2020 totaled $3.9 million, $1.2 million and $0.5 million, respectively.
The total fair value of stock options vested during 2018, 2019 and 2020 totaled $1.5 million, $0.9 million and $0.7 million, respectively. We recorded stock-based compensation expense, which is included in Regional and unallocated funeral and cemetery costs and General, administrative and other expenses, for stock options of $1.0 million, $0.7 million and $0.7 million for the years ended December 31, 2018, 2019 and 2020, respectively.
At December 31, 2020, there was $0.8 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options expected to be recognized over a weighted average period of approximately 1.53 years.
The following table further describes our outstanding stock options at December 31, 2020:
 Options OutstandingOptions Exercisable
Actual Ranges of Exercise PricesNumber Outstanding at 12/31/20Weighted-Average
Remaining
Contractual Life
Weighted-Average
Exercise Price
Number Exercisable at 12/31/20Weighted-Average
Remaining
Contractual Life
Weighted-Average
Exercise Price
$5.94 - $5.9422,674 1.18$5.94 22,674 1.18$5.94 
$18.02 - $22.58461,472 2.41$21.68 415,432 2.14$21.96 
$25.43 - $26.54427,590 6.50$26.19 229,776 6.43$26.28 
$5.94 - $26.54911,736 4.30$23.40 667,882 3.58$22.90 
Performance Awards
On February 19, 2020, we granted 237,500 performance awards to our leadership team and certain key employees, payable in shares. The fair value of these performance awards was $2.8 million and was determined by using the Monte-Carlo simulation pricing model. On May 19, 2020, we cancelled all performance award agreements previously awarded to all individuals during 2019 and the February 19, 2020 award.
Concurrently with the cancellation, the Compensation Committee of the Board approved a new performance award (“new performance award”) to be issued to certain employees. These awards will vest (if at all) on December 31, 2024 provided that the Company’s common stock reaches one of five predetermined growth targets for a sustained period beginning on the grant date of May 19, 2020 and ending on December 31, 2024. The new performance award was treated as a modification of the cancelled awards and resulted in an additional $1.7 million of incremental compensation costs. At December 31, 2020, there was $5.0 million of unrecognized compensation cost related to performance awards expected to be recognized over a weighted average period of 4.0 years.
A summary of the new performance award and changes during the year ended December 31, 2020 is presented in the table and below:
Performance AwardsSharesWeighted Average
Grant Date
Fair Value
At January 1, 2020— 
Granted 399,664 $10.79
Vested— 
Cancelled(33,538)$9.69
At December 31, 2020366,126 $10.89
The following table reflects the new performance awards granted during the year ended December 31, 2020, their respective fair values and the assumptions utilized in the Monte-Carlo simulation pricing model:
Grant dateMay 19, 2020June 25, 2020July 30, 2020August 31, 2020October 30, 2020
Performance periodMay 19, 2020 - December 31, 2024June 25, 2020 - December 31, 2024July 30, 2020 - December 31, 2024August 31, 2020 - December 31, 2024October 30, 2020 - December 31, 2024
Awards granted368,92113,9742,7956,9876,987
Fair value (in millions) (1)
$3.6$0.2$0.1$0.2$0.3
Simulation period (years)4.624.524.424.334.17
Share price at grant date$15.79$18.02$23.10$22.14$25.81
Expected volatility34.54 %36.24 %37.43 %37.71 %38.72 %
Risk-free interest rate0.33 %0.29 %0.20 %0.24 %0.30 %
(1)The total fair value of the new performance awards granted is $4.3 million.
During 2019, we granted 306,623 performance awards to our leadership team and certain key employees, payable in shares. The fair value of these performance awards was $1.6 million and was determined by using the Monte-Carlo simulation pricing model. These performance awards were cancelled on May 19, 2020.
During 2018, we granted 113,320 performance awards to our leadership team and certain key employees, payable in shares. The fair value of these performance awards was approximately $2.9 million and was determined by using the weighted average stock price on the grant date of $25.43. These performance awards were cancelled on November 29, 2019.
We recorded stock-based compensation expense, which is included in Regional and unallocated funeral and cemetery costs and General, administrative and other expenses, for performance awards of $4.4 million, $0.2 million and $0.9 million during the years ended December 31, 2018, 2019 and 2020, respectively.
Employee Stock Purchase Plan
We provide all employees the opportunity to purchase common stock through payroll deductions in our ESPP. Purchases are made quarterly; the price being 85% of the lower of the price on the first day of the plan entry date (beginning of the fiscal year) or the actual date of purchase (end of quarter). In 2020, employees purchased a total of 71,908 shares at a weighted average price of $16.71 per share. In 2019, employees purchased a total of 73,731 shares at a weighted average price of $13.18 per share. In 2018, employees purchased a total of 49,938 shares at a weighted average price of $18.56 per share.
We recorded stock-based compensation expense, which is included in Regional and unallocated funeral and cemetery costs and General, administrative and other expenses, for our ESPP of approximately $0.2 million, $0.3 million and $0.4 million during the years ended December 31, 2018, 2019 and 2020, respectively.
The fair values of the right to purchase shares under the ESPP are estimated at the date of purchase with the four quarterly purchase dates using the following assumptions:
Years Ended December 31,
201820192020
Dividend yield1.4 %1.4 %1.5 %
Expected volatility20.9 %36.1 %48.6 %
Risk-free interest rate
1.44%, 1.61%, 1.72%, 1.83%
2.42%, 2.51%, 2.56%, 2.60%
1.54%, 1.57%, 1.57%, 1.56%
Expected life (years)
0.25, 0.50, 0.75, 1.00
0.25, 0.50, .0.75, 1.00
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 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).
Good To Great Incentive Program
On February 19, 2020, we issued 17,991 shares of our common stock to certain employees, which were valued at approximately $0.4 million at a grant date stock price of $25.00.
During 2019, we issued 14,844 shares of our common stock to certain employees, which were valued at approximately $0.3 million at a grant date stock price of $19.92.
During 2018, we issued 5,712 shares of our common stock to certain employees, which were valued at approximately $0.1 million at a grant date stock price of $25.43.
Director (Non-Employee) Compensation Plans
On February 19, 2020, our Board revised the Director Compensation Policy to provide that each independent director is entitled to a quarterly retainer of $35,000 payable in cash and/or unrestricted shares of our common stock at the end of each quarter. The Lead Director and chairman of our Audit Committee are entitled to an additional annual retainer of $10,000, payable in quarterly installments of $2,500 each at the end of each quarter, and the chairman of our Corporate Governance and Compensation Committees are entitled to an additional annual retainer of $5,000, payable in quarterly installments of $1,250 each at the end of each quarter. Any new independent director will receive upon admission to the Board a grant of $25,000 (in addition to the independent director annual retainer prorated at the time the new director is admitted to the Board) which can be taken in cash or unrestricted shares of our common stock. The number of shares of such common stock will be determined by dividing the cash amount by the closing price of our common stock on the date of grant, which will be the date of admission to the Board.
On April 23, 2020, as part of our broad-based effort to respond to COVID-19, the Board approved a temporary reduction of the quarterly retainer for our non-employee directors from $35,000 per quarter to $29,750 per quarter (or 15%) effective April 19, 2020. On June 26, 2020, the Board voted to reinstate the quarterly retainer back to 100% effective as of June 28, 2020.
On July 30, 2020, the Board elected Dr. Achille Messac to serve as a Class II Director until the 2022 annual meeting of shareholders. Mr. Messac was appointed to serve on the Audit, Compensation and Corporate Governance Committees.
Pursuant to the revised Director Compensation Policy described above, for the year ended December 31, 2020, we granted 30,883 shares of our common stock to six Directors, which were valued at $0.7 million at a weighted average stock price of $21.16. For the year ended December 31, 2019, we granted 7,458 shares of our common stock to two Directors, which were valued at $0.2 million at a weighted average stock price of $20.78. For the year ended December 31, 2018, we granted 7,403 shares of our common stock to three Directors, which were valued at $0.2 million at a weighted average stock price of $20.52.
We recorded compensation expense, which is included in General, administrative and other expenses, related to annual retainers, including the value of stock granted to Directors above, of $0.5 million, $0.5 million and $0.9 million during the years ended December 31, 2018, 2019 and 2020, respectively.
Cash Dividends
On May 19, 2020, the Board approved an increase of $0.05 per share to our annual dividend beginning with the dividend declaration in the third quarter. On October 27, 2020, the Board approved an additional increase of $0.0125 per share for a total annual dividend of $0.40 per share beginning with the dividend declaration in the fourth quarter.
Our Board declared the following dividends payable on the dates below (in thousands, except per share amounts):
2020Per ShareDollar Value
March 1st$0.0750 $1,339 
June 1st$0.0750 $1,343 
September 1st$0.0875 $1,569 
December 1st$0.1000 $1,797 
2019Per ShareDollar Value
March 1st$0.0750 $1,360 
June 1st$0.0750 $1,365 
September 1st$0.0750 $1,336 
December 1st$0.0750 $1,337