Equity Plans and Equity Based Compensation

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Equity Plans and Equity Based Compensation

During the periods presented, the Company maintained two equity incentive plans under which stock options, restricted stock, and other equity incentive awards could be granted. Those plans include (i) the Company’s 2009 Long-Term Equity Incentive Plan, under which no new grants may be made (the “2009 LTI Plan”), and (ii) the Company’s 2019 Long-Term Equity Incentive Plan (the “2019 LTI Plan”). The 2019 LTI Plan, which authorizes a maximum aggregate issuance of 1,000,000 shares of common stock (subject to certain permitted adjustments), became effective on May 16, 2019, following approval of the Company’s shareholders. It will remain in effect until May 16, 2029, or until all shares of common stock subject to the 2019 LTI Plan are distributed, all awards have expired or terminated, or the plan is terminated pursuant to its terms, whichever occurs first. At September 30, 2019, the Company has reserved 994,534 shares of common stock for the purpose of issuance pursuant to future grants of options, restricted stock, and other equity awards to officers, directors and other employees of the Company.

For the three and nine months ended September 30, 2019 and 2018, the Company granted no options. The Company recorded no stock compensation expense applicable to options during the three and nine months ended September 30, 2019 and 2018 because all previously granted options were fully vested prior to 2007. In addition, there was no unrecognized option expense.

During the periods presented, awards of long-term incentives were granted under the 2009 LTI Plan in the form of restricted stock. Awards that were granted to management under a management incentive plan were granted in tandem with cash credit entitlements (typically in the form of 60% restricted stock grants and 40% cash credit entitlements). The management and employee restricted stock grants and tandem cash credit entitlements awarded, generally, will vest in three annual installments of 33.3% each. Awards that were granted to directors as additional retainer for their services do not include any cash credit entitlement. These director restricted stock grants are subject to forfeiture in the event that the recipient of the grant does not continue in service as a director of the Company for one year after grant or does not satisfy certain meeting attendance requirements, at which time they generally vest 100 percent. For measuring compensation costs, restricted stock awards are valued based upon the market value of the common

shares on the date of grant. During the three months ended September 30, 2019 and 2018, the Company granted awards of 5,466 and 180 shares of restricted stock. During the nine months ended September 30, 2019 and 2018, the Company granted awards of 31,329 and 35,490 shares of restricted stock, respectively. Total unvested restricted stock awards at September 30, 2019 and December 31, 2018 were 76,011 and 44,682, respectively.

The following table presents expense recorded for restricted stock and cash entitlements as well as the related tax information for the periods presented:



	Three Months Ended September 30,
	2019			2018

Restricted Stock Expense	$	311		$	303
Cash Entitlement Expense	167			155
Tax Effect	(124		)	(180		)
Net of Tax	$	354		$	278



	Nine Months Ended September 30,
	2019			2018

Restricted Stock Expense	$	972		$	952
Cash Entitlement Expense	509			495
Tax Effect	(386		)	(568		)
Net of Tax	$	1,095		$	879

Unrecognized expense associated with the restricted stock grants and cash entitlements totaled $2,356 and $2,277 as of September 30, 2019 and 2018, respectively.

Through August 16, 2019, the company maintained the 2009 Employee Stock Purchase Plan (the "2009 ESPP") whereby eligible employees had the option to purchase the Company’s common stock at a discount. The purchase price of the shares under this plan was set at 95% of the fair market value of the Company’s common stock as of the last day of the plan year. The plan had provided for the purchase of up to 750,000 shares of common stock, which the Company may obtain by purchases on the open market or from private sources, or by issuing authorized but unissued common shares.

The Company’s shareholders approved the Company’s new 2019 Employee Stock Purchase Plan (the “2019 ESPP”) on May 16, 2019. The 2019 ESPP replaces the 2009 ESPP, which expired by its own terms on August 16, 2019. The 2019 ESPP, which became effective as of October 1, 2019, provides for a series of 3-month offering periods, commencing on the first day and ending on the last trading day of each calendar quarter, for the purchase of the Company’s common stock by participating employees. The purchase price of the shares has been set at 95% of the fair market value of the Company’s common stock on the last trading day of the offering period. A total of 750,000 common shares has been reserved for issuance under the 2019 ESPP upon its effective date. The 2019 ESPP will continue until September 30, 2029, or, if earlier, until all of the shares of common stock allocated to the 2019 ESPP have been purchased.

Funding for the purchase of common stock under each of the 2009 ESPP and 2019 ESPP is from employee and Company contributions.

As an annual plan, the expense for the 2009 ESPP has been recorded in the third quarter of each year. There was $30 and $39 of expense recorded for the employee stock purchase plan during the three and nine months ended September 30, 2019 and 2018. There was no unrecognized compensation expense as of September 30, 2019 and 2018 for the employee stock purchase plan.