Share-Based Compensation

12 Months Ended

Dec. 31, 2020

8. Share-Based Compensation

The Company has various stock plans, under which employees and directors may be granted non-vested stock which vests over a specific time period. In April 2017, the Company approved the 2017 Stock Plan authorizing 1.8 million shares for issuance as non-vested stock in the form of restricted stock, restricted stock units, performance stock units, non-qualified stock options, incentive stock options and stock appreciation rights. As of December 31, 2020, there were 1.2 million shares available to issue as non-vested stock under the Company’s existing stock plans.

The Company recognizes expense for shares of non-vested stock over the vesting period with a pro-rata vesting upon retirement. Beginning with awards granted in December 2013, the vesting period is three years. During the period of restriction, the holder of non-vested stock has voting rights and is entitled to receive all dividends and other distributions paid with respect to the stock. The holders of the performance stock units are not entitled to vote or receive dividends and other distributions paid with respect to the stock, until the units have vested and shares of stock issued.

Grants issued after December 2013 and before December 2020, to elected officers, consist of 100% performance stock unit awards. These awards are based on a three-year performance period and a three-year vesting period with a pro-rata vesting upon retirement. Three-year performance that exceeds the stated performance metrics would result in an award up to 150% of the original grant, except for the grant issued in December 2019, which would result in an award up to 200% of the original grant for three-year performance that exceeds the stated performance metrics. The December 2020 grant consists of 60% performance stock unit awards and 40% non-vested restricted stock awards. The December 2020 performance stock unit awards are based on a three-year performance period and a three-year vesting period with a pro-rata vesting upon retirement. Three-year performance that exceeds the stated performance metrics would result in an award up to 200% of the original grant. The December 2020 non-vested restricted stock awards granted are based on a three-year vesting period with a pro-rata vesting upon retirement.

The Company expenses awards for non-vested stock, including time-vesting stock and performance stock units, based on the fair value of the Company’s common stock at the date of the grant.

The following table summarizes the non-vested stock and performance stock unit activity:

(In thousands except fair value)	Shares			Grant Date Weighted Average Fair Value		Aggregate Intrinsic Value
Outstanding at December 31, 2017		412		$	65.64	$	30,113
Granted		142			59.45
Vested		(111	)		56.91
Cancelled		(63	)		64.71
Outstanding at December 31, 2018		380			66.02		21,239
Granted		134			60.04
Vested		(46	)		63.61
Cancelled		(64	)		62.39
Outstanding at December 31, 2019		404			64.89		26,710
Granted		142			65.61
Vested		(27	)		74.21
Cancelled		(68	)		73.39
Outstanding at December 31, 2020		451		$	63.28	$	33,283

The total intrinsic values of shares vested during 2020, 2019, and 2018, was $1.4 million, $3.0 million, and $7.7 million, respectively.

As of December 31, 2020, total remaining unearned compensation, net of expected forfeitures, related to non-vested stock and performance stock units was $16.6 million, which will be amortized over the weighted average remaining service period of 2.34 years.

Total pre-tax share-based compensation expense (income) recognized in the Consolidated Statements of Earnings was $5.6 million, ($0.7) million, and $0.5 million in 2020, 2019, and 2018, respectively. The Company also recognized tax related benefits (expense) of $0.8 million, ($0.2) million and ($0.3) million, in 2020, 2019, and 2018, respectively. During the year ended December 31, 2019, the Company determined that it was not probable that it would meet the stated performance metrics related to certain performance-based awards resulting in an adjustment of share-based compensation of $3.6 million.