Quarterly report pursuant to Section 13 or 15(d)

Stock Based Compensation

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Stock Based Compensation
9 Months Ended
Sep. 30, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock Based Compensation

3. STOCK BASED COMPENSATION

The Company accounts for stock-based compensation under the provisions of ASC Topic 718, “Compensation - Stock Compensation”. The Company recognizes compensation cost in its financial statements for all share based payments granted, modified, or settled during the period.

For awards with graded vesting, compensation cost is recognized on a straight-line basis over the related vesting period.

For the three months ended September 30, 2018 and 2017, the Company recorded compensation expense (included in general and administrative expense) of $0 and $4,000, respectively, related to stock options and $1,456,000 and $1,659,000, respectively, related to amortization of non-vested stock grants and performance-based awards. For the nine months ended September 30, 2018 and 2017, the Company recorded compensation expense of $7,000 and $11,000, respectively, related to stock options and $4,203,000 and $4,905,000, respectively, related to amortization of non-vested stock grants and performance-based awards.    

During the nine months ended September 30, 2018, 71,606 stock options were exercised by employees and directors.  No stock options were exercised by employees and directors during the nine months ended September 30, 2017. During the three months ended September 30, 2018 and 2017, 11,114 and 19,537 shares of non-vested stock, respectively, vested. During the nine months ended September 30, 2018 and 2017, 51,067 and 66,565 shares of non-vested stock, respectively, vested.

During the nine months ended September 30, 2018, the Company issued 14,865 shares of non-vested stock to certain employees and non-employee directors which vest over periods ranging from one year to eight years. The fair market value on the date of grant of the non-vested stock issued during the nine months ended September 30, 2018 ranged from $81.86 to $94.08, resulting in an aggregate fair value of $1.4 million.

During the nine months ended September 30, 2018, the Company granted performance-based awards that entitle the recipient to earn up to 7,732 shares if certain performance criteria are achieved over a three-year period.  The Company estimated the aggregate fair value of the awards on the grant date to be $0.3 million.

In September 2018, the Company announced that current Chief Executive Officer, David Rogers, would be retiring effective March 1, 2019.  In conjunction with this announcement, the vesting periods of certain restricted stock awards and performance-based awards previously granted to Mr. Rogers were accelerated to reflect his March 1, 2019 retirement date.  As a result of this change, an additional $0.2 million of compensation expense was recorded during the three and nine months ended September 30, 2018 and additional compensation expense of $0.7 million and $0.4 million is expected to be recorded during three months ended December 31, 2018 and the three months ended March 31, 2019, respectively.