Stock-based Compensation

9 Months Ended

Sep. 30, 2021

Notes To Financial Statements

Stock-Based Compensation

8.     Stock-Based Compensation

The Company has long-term incentive compensation program for certain Company executive officers that includes grants of performance-based restricted stock units (“PRSUs”) in addition to time-based restricted stock units (“RSU”). Under the terms of the PRSU Agreement, the number of PRSUs that may be earned depends on the extent to which performance goals for the award are achieved over a three-year performance period, as determined by the Compensation Committee of the Board. As of September 30, 2021, PRSUs granted in 2021 and 2020 are being accrued at target and PRSUs granted in 2019 are being accrued above target.

On May 18, 2021, stockholders approved an amendment to the 2014 Omnibus Plan (the “Amendment”) authorizing an additional 1,100,000 shares available for future issuance. Including the additional shares authorized from the Amendment, 1,171,343 shares were available for future issuance under the 2014 Omnibus Plan at September 30, 2021.

For the three months ended September 30, 2021 and 2020, the Company’s net income, as reported, included $1.2 million and $0.9 million, respectively, of stock-based compensation costs, including the benefit or expense of phantom stock awards, and $0.3 million and $0.2 million of income tax benefit, respectively, related to the stock-based compensation plans. For the nine months ended September 30, 2021 and 2020, the Company’s net income, as reported, included $6.3 million and $4.3 million, respectively, of stock-based compensation costs, including the benefit or expense of phantom stock awards, and $1.7 million and $1.0 million of income tax benefit, respectively, related to the stock-based compensation plans.

During the three months ended September 30, 2021 and 2020, the Company did not grant any RSU or PRSU’s. During the nine months ended September 30, 2021 and 2020, the Company granted 238,985 and 172,728 RSU, respectively. During the nine months ended September 30, 2021 and 2020, the Company granted 62,790 and 72,143 in PRSU awards, respectively.

The Company uses the fair value of the common stock on the date of award to measure compensation cost for restricted stock unit awards. Compensation cost is recognized over the vesting period of the award using the straight-line method.

The following table summarizes the Company’s RSU and PRSU awards at or for the nine months ended September 30, 2021:

	RSU Awards			PRSU Awards
		Weighted-Average			Weighted-Average
		Grant-Date			Grant-Date
	Shares	Fair Value		Shares	Fair Value
Non-vested at December 31, 2020	336,898	$	23.48	66,580	$	21.26
Granted	238,985		18.44	62,790		18.46
Vested	(250,056)		21.26	(41,570)		19.08
Forfeited	(5,597)		21.36	—		—
Non-vested at September 30, 2021	320,230	$	21.48	87,800	$	20.29
Vested but unissued at September 30, 2021	224,709	$	21.08	108,685	$	20.48

As of September 30, 2021, there was $5.3 million of total unrecognized compensation cost related to RSU and PRSU awards granted. That cost is expected to be recognized over a weighted-average period of 2.4 years. The total fair value of awards vested for the three months ended September 30, 2021 and 2020 was $0.4 million and $0.2 million, respectively. The total fair value of awards vested for the nine months ended September 30, 2021 and 2020 was $5.4 million and $5.2 million, respectively. The vested but unissued RSU and PRSU awards consist of awards made to employees and directors who are eligible for retirement. According to the terms of these awards, which provide for vesting upon retirement, these employees and directors have no risk of forfeiture. These shares will be issued at the original contractual vesting and settlement dates.

Phantom Stock Plan: The Company maintains a non-qualified phantom stock plan as a supplement to its profit sharing plan for officers who have achieved the designated level and completed one year of service. The Company adjusts its liability under this plan to the fair value of the shares at the end of each period.

The following table summarizes the Phantom Stock Plan at or for the nine months ended September 30, 2021:

Phantom Stock Plan	Shares	Fair Value
Outstanding at December 31, 2020	120,248	$	16.64
Granted	10,232		19.85
Forfeited	(11)		18.25
Distributions	(2,606)		19.03
Outstanding at September 30, 2021	127,863	$	22.60
Vested at September 30, 2021	127,763	$	22.60

The Company recorded stock-based compensation expense (benefit) for the Phantom Stock Plan of $0.2 million and ($0.1) million for the three months ended September 30, 2021 and 2020, respectively. The total fair value of the distributions from the Phantom Stock Plan was $24,000 and $3,000 for the three months ended September 30, 2021 and 2020, respectively.

The Company recorded stock-based compensation expense (benefit) for the Phantom Stock Plan of $0.8 million and ($1.2) million for the nine months ended September 30, 2021 and 2020, respectively. The total fair value of the distributions from the Phantom Stock Plan was $50,000 and $10,000 for the nine months ended September 30, 2021 and 2020, respectively.