Annual report pursuant to Section 13 and 15(d)

RETIREMENT AND LONG-TERM INCENTIVE PLANS

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RETIREMENT AND LONG-TERM INCENTIVE PLANS
12 Months Ended
Dec. 31, 2019
Share Based Payments And Retirement Disclosure [Abstract]  
RETIREMENT AND LONG-TERM INCENTIVE PLANS

7. RETIREMENT AND LONG-TERM INCENTIVE PLANS

Defined Contribution Plan

We sponsor a defined contribution plan for eligible employees that is qualified under Section 401(k) of the Internal Revenue Code, which includes voluntary employee pre-tax contributions and a Company matching contribution, with potential additional discretionary contributions determined by the Board of Directors. Effective April 1, 2016, we temporarily suspended our matching contribution, but reinstated it effective May 1, 2019. For 2019, we contributed $0.8 million to the plan.

Long-Term Incentive Plans

Under our long-term incentive plans ("Incentive Plans"), the Compensation Committee of our Board of Directors may grant cash-based awards and equity-based awards to eligible employees and non-employee directors, including restricted stock and restricted stock units, stock options and stock-based performance awards. The Compensation Committee determines the number of shares or stock options subject to each award, as well as the terms, conditions, performance measures, and other provisions of the award. A summary of our Incentive Plans, and the number of shares of our common stock that may be issued under each plan, is as follows:

 

Long-Term Incentive Plan (approved on February 13, 1997) - 1,000,000 shares;

 

2002 Long-Term Incentive Plan (approved on April 24, 2002, and amended on April 26, 2006) - 500,000 shares;

 

2011 Stock Incentive Plan (approved on April 28, 2011) - 500,000 shares; and

 

2015 Stock Incentive Plan (approved on April 23,2015) - 1,000,000 shares.

At December 31, 2019, we had 611,887 aggregate shares available for future issuance under our Incentive Plans.

Restricted Stock and Stock Option Awards - Restricted stock awards include shares of restricted stock and restricted stock units and are subject to transfer restrictions, forfeiture provisions and other terms and conditions of the Incentive Plans. Restricted stock awards to our employees generally have a three-year graded vesting period and awards to our non-employee directors vest over a six-month period.  The total initial fair value for these awards is determined based upon the closing price of our stock on the date of grant applied to the total number of shares granted. The fair value is expensed on a straight-line basis over the applicable vesting period.

A summary of activity for our restricted stock awards for 2019, 2018 and 2017 is as follows:

 

 

 

2019

 

 

2018

 

 

2017

 

 

 

Number

of Shares

 

 

Weighted-

Average

Grant-Date

Fair Value

Per Share

 

 

Number

of Shares

 

 

Weighted-

Average

Grant-Date

Fair Value

Per Share

 

 

Number

of Shares

 

 

Weighted-

Average

Grant-Date

Fair Value

Per Share

 

Restricted shares, beginning of period

 

 

526,438

 

 

$

11.56

 

 

 

445,126

 

 

$

12.83

 

 

 

370,565

 

 

$

12.99

 

Granted

 

 

170,936

 

 

 

6.09

 

 

 

440,185

 

 

 

11.16

 

 

 

383,121

 

 

 

13.02

 

Vested

 

 

(255,449

)

 

 

11.41

 

 

 

(250,219

)

 

 

10.93

 

 

 

(215,478

)

 

 

12.52

 

Forfeited

 

 

(155,777

)

 

 

11.81

 

 

 

(108,654

)

 

 

12.01

 

 

 

(93,082

)

 

 

12.53

 

Restricted shares, end of period

 

 

286,148

 

 

 

8.30

 

 

 

526,438

 

 

 

11.56

 

 

 

445,126

 

 

 

12.83

 

 

Compensation expense for our restricted stock awards was $1.8 million, $2.8 million  and $2.7 million  for 2019, 2018 and 2017, respectively. The total income tax benefit (expense) recognized for our share-based compensation arrangements was benefit of $13,000  for 2019 and a expense of $19,000 and $0.3 million for 2018 and 2017, respectively. At December 31, 2019, we had $1.6 million of unrecognized compensation expense related to our restricted stock awards. This cost is expected to be recognized over a weighted-average period of two years. The total fair value of restricted stock awards granted during 2019 was $1.0 million and the total fair value of restricted stock awards that vested during 2019 was $2.9 million.  At December 31, 2019, we had no outstanding stock option awards and no stock option awards were made during 2019, 2018 or 2017.

Stock-Based Performance Awards – Stock-based performance awards represent awards payable in cash for which the amount payable is determined based upon our total shareholder return during the performance period compared to an industry peer group as determined by our Compensation Committee. The cash payment occurs in the period immediately following the completion of the performance period. The fair value of the awards is calculated each reporting period using a Monte Carlo simulation model and is expensed on a straight-line basis over the applicable performance period, with cumulative adjustments for changes in the fair value between reporting periods.   During 2018 and 2017, stock-based performance awards were granted with a three-year performance period ending December 31, 2020 and 2019, respectively.

 

During 2019 we recognized a benefit of $1.7 million (due to the reversal of previously recognized expense), and during 2018 and 2017 we recognized compensation expense of $1.1 million and $1.5 million, respectively, related to our stock-based performance awards. At December 31, 2019, we had no amounts accrued for these awards as the minimum target for the stock-based performance award granted in 2017 was not achieved, and the Monte Carlo simulation model projects that no payout will be earned for the stock-based performance award granted in 2018.  The total fair value of stock-based performance awards granted during 2018 and 2017 was $3.8 million and $4.7 million, respectively.

 

Cash-Based Performance Awards – Cash-based performance awards represent awards payable in cash based on the achievement of annual income targets. The cash payment occurs in the period immediately following the completion of the performance period.  During 2019, cash-based performance awards were granted with a three-year performance period ending December 31, 2021. One-third of the award is earned each year in the performance period, provided the applicable annual income target is achieved, or is forfeited if the applicable annual income target is not achieved.  During 2019, we recognized no compensation expense related to cash-based performance awards as the minimum income target for 2019 was not achieved.  Target amounts payable associated with the 2020 and 2021 performance periods are $0.5 million for each performance period if the target income metrics are achieved.