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STOCK-BASED COMPENSATION PLANS
12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK-BASED COMPENSATION PLANS
The Company's equity incentive plan was approved and amended by stockholders on April 27, 2005 and May 20, 2014. The Company is authorized to issue awards up to 2,000,000 shares of common stock.
During 2018 and 2017, the Company granted annual Restricted Stock Awards (RSAs) of 47,273 and 49,290, respectively, of common stock to officers and directors of the Company. In 2018 and 2017, 19,742 RSAs and 20,747 RSAs, respectively, were canceled. Officer RSAs granted in 2018 and 2017 vest over 36 months with the first year cliff vesting. Director RSAs generally vest at the end of 12 months. During 2018 and 2017, the RSAs granted were valued at $35.40 and $36.75 per share, respectively, based upon the fair market value of the Company's common stock on the date of grant.
The Company granted performance-based Restricted Stock Unit Awards (RSUs) of 28,594 and 31,389 of common stock to officers in 2018 and 2017, respectively. Each award reflects a target number of common shares that may be issued to the award recipient. The 2018 and 2017 awards may be earned upon the completion of a 3-year performance period. During 2018 and 2017, the Company issued 48,753 RSUs and 38,709 RSUs, respectively, to officers, and 24,009 RSUs and 19,735 RSUs, respectively, were canceled. Whether RSUs are earned at the end of the performance period will be determined based on the achievement of certain performance objectives set by the Board of Director Compensation Committee in connection with the issuance of the RSUs. The performance objectives are based on the Company's business plan covering the performance period. The performance objectives include achieving the budgeted return on equity, budgeted investment in utility plant, customer service standards, employee safety standards and water quality standards. Depending on the results achieved during the 3-year performance period, the actual number of shares that a grant recipient receives at the end of the performance period may range from 0% to 200% of the target shares granted, provided that the grantee is continuously employed by the Company through the vesting date. If prior to the vesting date employment is terminated by reason of death, disability or normal retirement, then a pro rata portion of this award will vest. RSUs are not included in diluted shares until earned. The RSUs are recognized as expense ratably over the 3 year performance period using a fair market value of $35.40 per share for the 2018 RSUs and $36.75 per share for the 2017 RSUs based on an estimate of RSUs earned during the performance period.
The Company has recorded compensation costs for the RSAs and RSUs which are included in administrative and general operating expenses in the amount of $3.1 million, $3.1 million, and $2.8 million for 2018, 2017 and 2016, respectively.