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Share-Based Compensation and Other Employee Benefit Plans
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Share-Based Compensation and Other Employee Benefit Plans SHARE-BASED COMPENSATION AND OTHER EMPLOYEE BENEFIT PLANS
Our Amended and Restated 2008 Incentive Compensation Plan (the “ICP”), which was shareholder-approved, permits the grant of share-based awards to its employees.  At December 31, 2020, 2.9 million shares were available for issuance.  The granting of awards to key employees is typically in the form of restricted stock awards or units.  We believe that such awards better align the interests of our employees with those of our shareholders.  Total compensation cost that has been charged against income for the ICP was $7.7 million in 2020, $8.0 million in 2019, and $8.1 million in 2018.  The total income tax benefit was $1.9 million in 2020, $2.0 million in 2019, and $2.0 million in 2018.
Restricted Stock Awards
Restricted stock awards require certain service requirements and commonly have vesting periods of 3 years.  Compensation expense is recognized on a straight-line basis over the vesting period.  Shares are subject to certain restrictions and risk of forfeiture by the participants.
A summary of changes in our nonvested shares for the year follows:
(shares in thousands)SharesWeighted
Average
Grant-Date
Fair Value
Year Ended December 31, 2020
Nonvested balance at beginning of period406 $16.98 
Granted during the year365 14.79 
Vested during the year(193)17.16 
Forfeited during the year(20)16.53 
Nonvested balance at end of period558 $15.51 
As of December 31, 2020, there was $5.7 million of total unrecognized compensation cost related to nonvested shares granted under the ICP.  The cost is expected to be recognized over a weighted-average period of 2.1 years.  The total fair value of the shares vested was $2.9 million in 2020, $3.4 million in 2019, and $3.4 million in 2018.
Restricted Stock Units
Restricted stock units require certain performance requirements and have vesting periods of 3 years.  Compensation expense is recognized on a straight-line basis over the vesting period.  Shares are subject to certain restrictions and risk of forfeiture by the participants.
A summary of changes in our nonvested shares for the year follows:
(shares in thousands)SharesWeighted
Average
Grant-Date
Fair Value
Year Ended December 31, 2020
Nonvested balance at beginning of period965 $14.07 
Granted during the year344 17.14 
Vested during the year(437)16.31 
Forfeited during the year(1)12.62 
Dividend equivalents adjustment40 14.48 
Nonvested balance at end of period911 $14.18 
As of December 31, 2020, there was $3.6 million of total unrecognized compensation cost related to nonvested shares granted under the ICP.  The cost is expected to be recognized over a weighted-average period of 1.7 years.
Stock Options and Appreciation Rights
Option awards are generally granted with an exercise price equal to the market price of our Common Stock at the date of grant; these option awards have vesting periods ranging from 3 to 5 years and have 10-year contractual terms.
Old National has not granted stock options since 2009.  However, Old National did acquire stock options and stock appreciation rights through prior year acquisitions. Old National recorded no incremental expense associated with the conversion of these options and stock appreciation rights.
As of December 31, 2020, all options were fully vested and all compensation costs had been expensed. At December 31, 2020, the outstanding shares consisted of stock appreciation rights acquired through prior year acquisitions.
A summary of the activity in stock appreciation rights in 2020 follows:
(shares in thousands)SharesWeighted
Average
Exercise
Price		Weighted
Average
Remaining
Contractual
Term in Years		Aggregate
Intrinsic
Value
(in thousands)
Year Ended December 31, 2020
Outstanding at beginning of period57 $4.11 
Exercised(16)3.76 
Outstanding at end of period41 $4.24 1.35$509.8 
Options exercisable at end of year41 $4.24 1.35$509.8 
Information related to stock option and appreciation rights follows:
Year Ended December 31,
(dollars in thousands)202020192018
Intrinsic value of options/appreciation rights exercised$213 $178 $385 
Cash received from options/appreciation rights exercises— 280 948 
Tax benefit realized from options/appreciation rights exercises85 71 154 
Outside Director Stock Compensation Program
Old National maintains a director stock compensation program covering all outside directors.  Compensation shares are earned semi-annually.  Beginning in 2017, any shares awarded to directors are anticipated to be issued from the ICP.  In 2020, 28 thousand shares were issued to directors, compared to 12 thousand shares in 2019, and 16 thousand shares in 2018.
Employee Stock Ownership Plan
The Employee Stock Ownership and Savings Plan (the “401(k) Plan”) permits employees to participate the first month following one month of service. Old National matches 75% of employee compensation deferral contributions of the first 4% of compensation, and 50% of the next 4% of compensation.  In addition to matching contributions, Old National may make discretionary contributions to the 401(k) Plan in the form of Old National stock or cash.  Our Board of Directors designated no discretionary profit sharing contributions in 2020, 2019, or 2018. All contributions vest immediately and plan participants may elect to redirect funds among any of the investment options provided under the 401(k) Plan.  The number of Old National shares in the 401(k) Plan were 0.6 million at December 31, 2020 and December 31, 2019.  All shares owned through the 401(k) Plan are included in the calculation of weighted-average shares outstanding for purposes of calculating diluted and basic earnings per share.  Contribution expense under the 401(k) Plan was $9.5 million in 2020, $9.8 million in 2019, and $8.6 million in 2018.