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Stock-Based Compensation Plan
 12 Months Ended
Dec. 31, 2020
Stock-Based Compensation Plan [Abstract]  
Stock-Based Compensation Plan (8) Stock–Based Compensation Plan

2019 Incentive Plan

In June 2019, the Company’s stockholders approved the CAI International, Inc. 2019 Incentive Plan (2019 Plan), which replaced the CAI International, Inc. Amended and Restated 2007 Equity Incentive Plan (2007 Plan). No further awards will be made under the 2007 Plan. Under the 2019 Plan, a maximum of 2,577,075 share awards may be granted. Under the 2019 Plan, the Company may grant incentive and nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards and other stock or cash-based awards.

Stock Options

Stock options granted to employees have a vesting period of four years from grant date, with 25% vesting after one year, and 1/48th vesting each month thereafter until fully vested. Stock options granted to independent directors vest in one year. All of the stock options have a contractual term of 10 years.

The following table summarizes the Company’s stock option activities for the three years ended December 31, 2020:

Weighted

Average

Weighted

Remaining

Aggregate

Average

Contractual

Intrinsic

Number of

Exercise

Term

Value

Shares

Price

(in years)

(in thousands)

Options outstanding, December 31, 2017

859,560

$

16.44

Options exercised

(9,393)

$

14.76

Options outstanding, December 31, 2018

850,167

$

16.46

Options exercised

(185,221)

$

14.06

Options forfeited

(3,000)

$

12.88

Options expired

(15,000)

$

25.53

Options outstanding, December 31, 2019

646,946

$

16.96

Options exercised

(253,646)

$

15.68

Options forfeited

(11,814)

$

15.64

Options expired

(80,310)

$

23.31

Options outstanding, December 31, 2020

301,176

$

16.39

3.1

$

4,473

Options exercisable at December 31, 2020

297,840

$

16.40

3.1

$

4,421

Expected to vest after December 31, 2020

3,336

$

15.89

6.1

$

52

 


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The aggregate intrinsic value represents the value by which the Company’s closing stock price of $31.24 per share on the last trading day of the year ended December 31, 2020 exceeds the exercise price of the stock, multiplied by the number of options outstanding or exercisable, excluding options that have a zero or negative intrinsic value. Based on the closing share price on the date each option was exercised, the aggregate intrinsic value was $2.0 million for stock options exercised during 2020 and 2019, and $0.1 million for stock options exercised during 2018.

The Company recognized stock-based compensation expense relating to stock options in continuing operations of $0.3 million, $0.5 million and $1.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, the remaining unamortized stock-based compensation cost relating to stock options granted to the Company’s employees and independent directors was less than $0.1 million, which is to be recognized over the remaining weighted average vesting period of approximately 0.1 years.

The Company did not grant any stock options during the years ended December 31, 2020, 2019 and 2018.

Restricted Stock Awards, Time-Based Restricted Stock Units and Performance-Based Restricted Stock Units

The Company grants time-based restricted stock units to certain employees and restricted stock awards to independent directors from time to time pursuant to the 2019 Plan. Time-based restricted stock units granted to employees have a vesting period of four years; 25% vesting on each anniversary of the grant date. Restricted stock awards granted to independent directors vest in one year. The Company recognizes the compensation cost associated with restricted stock awards and time-based restricted stock units over the vesting period based on the closing price of the Company’s common stock on the date of grant.

The Company grants performance-based restricted stock to certain executives and other key employees. The performance-based restricted stock units vest at the end of a 3-year performance cycle if certain financial performance targets are met. The Company recognizes compensation cost associated with the performance-based restricted stock ratably over the 3-year term when it is considered probable that performance targets will be met. Compensation cost is based on the closing price of the Company’s common stock on the date of grant.

The following table summarizes the activity of restricted stock and performance stock under the 2019 Plan:

Weighted

Average

Number of

Grant Date

Shares

Fair Value

Outstanding at December 31, 2017

78,542

$

14.92

Granted

156,165

$

22.48

Vested

(29,977)

$

16.52

Outstanding at December 31, 2018

204,730

$

20.45

Granted

166,939

$

25.37

Vested

(81,259)

$

20.89

Forfeited

(8,674)

$

22.42

Outstanding at December 31, 2019

281,736

$

23.18

Granted

143,957

$

25.60

Vested

(124,135)

$

22.95

Forfeited

(115,087)

$

25.28

Outstanding at December 31, 2020

186,471

$

23.91

The Company recognized stock-based compensation expense relating to restricted stock and performance stock in continuing operations of $1.5 million, $2.0 million and $1.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. As of December 31, 2020, unamortized stock-based compensation expense relating to restricted stock and performance stock was $2.2 million, which will be recognized over the remaining average vesting period of 1.6 years.

Stock-based compensation expense is recorded as a component of administrative expenses in the Company’s consolidated statements of income with a corresponding credit to additional paid-in capital in the Company’s consolidated balance sheets.


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Employee Stock Purchase Plan

In June 2019, the Company’s stockholders approved the CAI International, Inc. 2019 Employee Stock Purchase Plan (ESPP). The ESPP provides a means by which eligible employees may be given an opportunity to purchase shares of the Company’s common stock at a discount using payroll deductions. The ESPP authorizes the issuance of up to 250,000 shares of the Company’s common stock. The first offering period under the ESPP commenced in December 2019. The Company issued 10,222 shares of the Company’s common stock under the ESPP during the year ended December 31, 2020 and recognized stock-based compensation expense relating to the ESPP of less than $0.1 million for the year ended December 31, 2020. No shares were issued under the ESPP during the year ended December 31, 2019.