Stock-Based Incentive Plan

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

The Corporation maintains the 2013 Long-Term Incentive Plan, which replaced the expired 2003 Long-Term Incentive Plan. In December 2018, the Corporation's Board of Directors approved an Amended and Restated Univest 2013 Long-Term Incentive Plan to permit the issuance of restricted stock units.

Beginning in 2019, the Corporation issued to directors and employees ("grantees") restricted stock units rather than restricted stock awards or stock options, which were issued to grantees in prior reporting periods. Restricted stock units differ from restricted stock awards in that Corporation stock is not issued to grantees at the date of the grant and the grantee does not have voting or dividend rights during the vesting period. In the following schedules, issued restricted stock units have been combined with restricted stock awards, as the determination of the value at the grant date and methodology for recording stock-based compensation expense is the same.

Under the Amended and Restated Univest 2013 Long-Term Incentive Plan, the Corporation may grant up to 3,706,946 options and restricted stock to employees and non-employee directors. The number of shares of common stock available for issuance under the plan is subject to adjustment, as described in the plan. This includes, in the event of any merger, reorganization, consolidation, recapitalization, stock dividend, or other change in corporate structure affecting the stock, substitution or adjustment in the aggregate number of shares reserved for issuance under the plan, in the number and option price of shares subject to outstanding options granted under the plan and in the number and price of shares subject to other awards, as described in the plan. The plan provides for the issuance of options to purchase common shares at prices not less than 100 percent of the fair market value on the date of option grant and have a contractual term of ten years. There were 2,509,615 share awards available for future grants at December 31, 2020 under the plan. At December 31, 2020, there were 453,785 options to purchase common stock and 305,704 unvested restricted stock awards and units outstanding under the plan.

The following is a summary of the Corporation's stock option activity and related information for the year ended December 31, 2020:


(Dollars in thousands, except per share data)	Shares Under Option	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value at December 31, 2020
Outstanding at December 31, 2019	508,111	$	24.83

Expired	(2,000)	28.33
Forfeited	(30,826)	26.10
Exercised	(21,500)	17.84
Outstanding at December 31, 2020	453,785	25.06		5.8	$	268
Exercisable at December 31, 2020	404,014	24.63		5.6	268

The following is a summary of nonvested stock options at December 31, 2020 including changes during the year:


(Dollars in thousands, except per share data)	Nonvested Stock Options	Weighted Average Grant Date Fair Value
Nonvested stock options at December 31, 2019	163,261	$	6.54

Vested	(106,131)	6.58
Forfeited	(7,359)	6.48
Nonvested stock options at December 31, 2020	49,771	6.46

The Corporation's estimate of the fair value of a stock option is based on expectations derived from historical experience and may not necessarily equate to its market value when fully vested. The life of the option is based on historical factors which include the contractual term, vesting period, exercise behavior and employee turnover. The risk-free rate for periods within the expected term of the option is based on the U.S. Treasury strip rate in effect at the time of grant. Expected dividend yield is calculated based on the most recently declared quarterly dividend, multiplied by four, over the exercise price. Expected volatility is based on the historical volatility of the Corporation's stock over the expected life of the grant.

The following aggregated assumptions were used to estimate the fair value of options granted for the periods indicated. The Corporation did not issue stock options during the years ended December 31, 2020 and 2019.


	For the Year Ended December 31,
	2018
Expected option life in years	6.6
Risk free interest rate	2.80	%
Expected dividend yield	2.81	%
Expected volatility	27.15	%
Fair value of options	$6.46

In the following tables, issued restricted stock units have been combined with restricted stock awards, as the determination of the value at the grant date and methodology for recording stock-based compensation expense is the same for restricted stock units and restricted stock awards. The following is a summary of nonvested restricted stock awards and nonvested restricted stock units at December 31, 2020 including changes during the year:


(Dollars in thousands, except per share data)	Nonvested Stock Awards and Units	Weighted Average Grant Date Fair Value
Nonvested share awards at December 31, 2019	209,378	$	26.76
Granted (1)	262,844	19.00
Vested	(59,855)	27.17
Cancelled (2)	(106,663)	23.39
Nonvested share awards and units at December 31, 2020	305,704	21.18

(1) Includes the impact of modifications of 83,764 awards at a weighted average fair value of $19.80.

(2) Includes the impact of modifications of 83,764 awards at a weighted average fair value of $22.67.

Certain information regarding restricted stock awards and units is summarized below for the periods indicated:


	For the Years Ended December 31,
(Dollars in thousands, except per share data)	2020		2019		2018
Restricted stock awards and units granted	262,844		114,729		59,953
Weighted average grant date fair value	$	19.00	$	25.65	$	28.39
Intrinsic value of awards granted	$	4,994	$	3,072	$	1,293
Restricted stock awards and units vested	59,855		44,807		97,201
Weighted average grant date fair value	$	27.17	$	21.65	$	20.13
Intrinsic value of awards vested	$	1,375	$	1,119	$	2,709

The total unrecognized compensation expense and the weighted average period over which unrecognized compensation expense is expected to be recognized related to nonvested stock options and nonvested restricted stock awards and units at December 31, 2020 is presented below:


(Dollars in thousands)	Unrecognized Compensation Cost		Weighted-Average Period Remaining (Years)
Stock options	$	62	0.2
Restricted stock awards and units	4,072		1.7
	$	4,134	1.7

The following table presents information related to the Corporation's compensation expense related to stock incentive plans recognized for the periods indicated:


	For the Years Ended December 31,
(Dollars in thousands)	2020		2019		2018
Stock-based compensation expense:
Stock options	$	338	$	716	$	1,020
Restricted stock awards and units	1,142		1,632		1,537
Employee stock purchase plan	88		74		68
Total	$	1,568	$	2,422	$	2,625
Tax benefit on nonqualified stock option expense, restricted stock awards and disqualifying dispositions of incentive stock options	$	278	$	518	$	620

There were no significant modifications or accelerations to options, restricted stock awards or restricted stock units during the period 2018 through 2020.