INCENTIVE STOCK PLANS

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

REPLACEMENT RESTRICTED STOCK AWARDS FROM THE MERGERS

As a result of the Mergers, Rayonier issued 69,176 shares of restricted stock awards (“replacement awards”) in connection with unvested Pope Resources restricted units. Eligible outstanding Pope Resources restricted units were canceled and exchanged for replacement awards, pursuant to an exchange ratio in the merger agreement designed to maintain the intrinsic value of the awards immediately prior to the exchange.

In accordance with ASC 805, these awards are considered to be replacement awards. Exchanges of share-based payment awards in conjunction with a business combination are modifications in accordance with ASC 718, Compensation — Stock Compensation (“ASC 718”). As a result, the portion of the fair-value of replacement awards attributable to pre-merger services were included in measuring the consideration transferred in the business combination. The fair value of the replacement awards was estimated to be approximately $1.7 million of which $0.2 million was attributable to pre-merger services. See Note 2 — Merger with Pope Resources for additional information.

REPLACEMENT AWARD EXPENSE

The replacement awards issued have similar vesting provisions as the terms of existing Rayonier restricted stock. Expense for the replacement awards that were not fully vested prior to the date of the merger will continue to be recognized over a weighted average remaining service period of approximately 21 months unless a qualifying termination occurs.

A qualifying termination of an awardee will result in the acceleration of vesting and expense recognition in the period that the qualifying termination occurs. Qualifying terminations during the three and nine months ended September 30, 2020 resulted in the accelerated vesting of 3,973 and 15,049 of the replacement awards and recognition of approximately $0.1 million and $0.3 million of expense, respectively. This accelerated vesting expense is included in merger-related integration costs as described in Note 20 — Charges for Integration and Restructuring.

A summary of the replacement awards granted as a result of the Mergers is presented below:


	Three Months Ended September 30,	Nine Months Ended September 30,
	2020	2020
Replacement restricted shares granted	—	69,176
Weighted average price of replacement restricted shares granted	—	$24.01
Replacement restricted shares vested as a result of acceleration due to qualifying terminations	3,973	15,049
Grant date fair value of replacement restricted shares vested	$24.01	$24.01
Intrinsic value of replacement restricted shares outstanding (a)	$1,431	$1,431
Cash used to purchase common shares from employees with vested replacement shares to pay minimum withholding tax requirements	—	$44

(a)Intrinsic value of restricted stock outstanding is based on the market price of the Company’s stock at September 30, 2020.

For additional information related to our incentive stock plans, see Note 17 — Incentive Stock Plans in the Company’s 2019 Form 10-K.