Stock Compensation - Restricted Stock and Performance Share Grants

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

STOCK COMPENSATION - RESTRICTED STOCK AND PERFORMANCE SHARE GRANTS

The Company’s stock incentive plans provide for making awards to employees based upon a service condition or through the achievement of performance-related objectives. The Company has issued three types of stock grant awards under these plans: restricted stock with service condition vesting; performance share grants that only vest upon the achievement of specified performance conditions, such as corporate cash flow goals or share price, also known as Performance Condition Grants; and performance share grants that include threshold, target, and maximum achievement levels based on the achievement of specific performance measures, or Performance Milestone Grants. Performance Condition Grants with market-based conditions are based on the achievement of a target share price. The share price used to calculate vesting for market-based awards is determined using a Monte Carlo simulation. Failure to achieve the target share price will result in the forfeiture of shares. Forfeiture of share awards with service conditions or performance-based restrictions will result in a reversal of previously recognized share-based compensation expense. Forfeiture of share awards with market-based restrictions do not result in a reversal of previously recognized share-based compensation expense.

The following is a summary of the Company's Performance Condition Grants as of the six months ended June 30, 2021:


Performance Condition Grants

Threshold performance						32,282
Target performance						515,919
Maximum performance						924,338

The following is a summary of the Company’s stock grant activity, both time and performance share grants, assuming target achievement for outstanding performance grants for the six months ended June 30, 2021:


			June 30, 2021
Stock Grants Outstanding Beginning of Period at Target Achievement			840,307
New Stock Grants/Additional Shares due to Achievement in Excess of Target			50,379
Vested Grants			(110,517)
Expired/Forfeited Grants			(23,956)
Stock Grants Outstanding End of Period at Target Achievement			756,213

The following is a summary of the assumptions used to determine the price for the Company's market-based Performance Condition Grants for the six months ended June 30, 2021:


($ in thousands except for share prices)
Grant date	12/12/2019	03/11/2020	12/11/2020	03/18/2021
Vesting end	12/31/2022	12/31/2022	12/31/2023	03/18/2024
Share price at target achievement	$18.80	$16.36	$17.07	$20.02

Expected volatility	17.28%	18.21%	29.25%	30.30%
Risk-free interest rate	1.69%	0.58%	0.19%	0.33%

Simulated Monte Carlo share price	$11.95	$5.87	$15.59	$18.82
Shares granted	6,327	81,716	3,628	10,905
Total fair value of award	$76	$480	$57	$205

The unamortized cost associated with unvested stock grants and the weighted average period over which it is expected to be recognized as of June 30, 2021 were $5,704,000 and 17 months, respectively. The fair value of restricted stock with time-based vesting features is based upon the Company’s share price on the date of grant and is expensed over the service period. The fair value of performance grants that cliff vest based on the achievement of performance conditions is based on the share price of the Company’s stock on the day of grant once the Company determines that it is probable that the award will vest. This fair value is expensed over the service period applicable to these grants. For performance grants that contain a range of shares from zero to a maximum, the Company determined, based on historic and projected results, the probability of (1) achieving the performance objective and (2) the level of achievement. Based on this information, the Company determines the fair value of the award and measures the expense over the service period related to these grants. Because the ultimate vesting of all performance grants is tied to the achievement of a performance condition, the Company estimates whether the performance condition will be met and over what period of time. Ultimately, the Company will adjust stock compensation costs according to the actual outcome of the performance condition.

Under the Non-Employee Director Stock Incentive Plan, or NDSI Plan, each non-employee director receives a portion of his or her annual compensation in stock. The stock is granted at the end of each quarter based on the quarter-end stock price.

The following table summarizes stock compensation costs for the Company's 1998 Stock Incentive Plan, or the Employee Plan, and NDSI Plan for the following periods:


($ in thousands)	Six Months Ended June 30,
Employee Plan:	2021		2020
Expensed	$	1,969	$	2,179
Capitalized	131		649
	2,100		2,828
NDSI Plan - Expensed	256		220
Total Stock Compensation Costs	$	2,356	$	3,048