Share-Based Compensation

The Amended and Restated Vishay Precision Group, Inc. Stock Incentive Plan (as amended and restated, the “Plan”) permits the issuance of up to 1,000,000 shares of common stock. At December 31, 2019, the Company had reserved 417,602 shares of common stock for future grant of equity awards (restricted stock, unrestricted stock, restricted stock units (“RSUs”), or stock options). If any outstanding awards are forfeited by the holder, the underlying shares would be available for future grants under the Plan.

Restricted Stock Units

Pursuant to the Plan, the Company issued RSUs to board members, executive officers, and certain employees of the Company during 2019. The amount of compensation cost related to share-based payment transactions is measured based on the grant-date fair value of the equity instruments issued. VPG determines compensation cost for RSUs based on the grant-date fair value of the underlying common stock. Compensation cost is recognized over the period that the participant provides service in exchange for the award. The Company recognizes compensation cost for RSUs that are expected to vest and for which performance criteria are expected to be met.

On March 13, 2019, VPG’s three then- current executive officers were granted annual equity awards in the form of RSUs, of which 75% are performance-based. The awards have an aggregate target grant-date fair value of $1.8 million were comprised of 51,814 RSUs. Twenty-five percent of these awards will vest on January 1, 2022, subject to the executives' continued employment. The performance-based portion of the RSUs will also vest on January 1, 2022, subject to the executives' continued employment and the satisfaction of certain performance objectives relating to three-year cumulative “adjusted free cash flow” and net earnings goals, each weighted equally. The awards issued in 2018 and 2017 have similar allocations and vesting criteria.

On March 20, 2019, certain VPG employees were granted annual equity awards in the form of RSUs, of which 75% are performance-based. The awards have an aggregate target grant-date fair value of $0.4 million and were comprised of 12,445 RSUs. Twenty-five percent of these awards will vest on January 1, 2022 subject to the employees' continued employment. The performance-based portion of the RSUs will also vest on January 1, 2022, subject to the employee's continued employment and the satisfaction of certain performance objectives relating to three-year cumulative earnings goals and cash flow goals.

On May 16, 2019, the Board of Directors approved the issuance of an aggregate of 8,244 RSUs to the independent board members of the Board of Directors and to the non-executive Chairman of the Board of Directors. The awards have an aggregate grant-date fair value of $0.3 million and will vest on the earlier of the Annual Stockholders meeting or May 16, 2020, subject to the directors' continued service on the Board of Directors.

Vesting of equity awards may be subject to acceleration under certain circumstances.

RSU activity is presented below (number of RSUs in thousands):



	Years ended December 31,
	2019				2018				2017
	Number of RSUs		Weighted Average Grant-date Fair Value		Number of RSUs		Weighted Average Grant-date Fair Value		Number of RSUs		Weighted Average Grant-date Fair Value
Outstanding:
Beginning of year	265		$	17.64	417		$	14.57	377		$	14.04
Granted	73		35.27		74		28.20		98		16.75
Vested	(75	)	15.27		(86	)	16.75		(58	)	14.78
Forfeited	(51	)	11.49		(140	)	14.70		—		—
End of year	212		$	25.97	265		$	17.64	417		$	14.57

The fair value of the RSUs vested during 2019 is $2.5 million. Included in the 2019 and 2018 activity are RSU's forfeited as a result of performance objectives not being met. These awards are therefore available for future grants under the Plan.

RSUs with performance-based vesting criteria are expected to vest as follows (number of RSUs in thousands):



Vesting Date	Expected to Vest	Not Expected to Vest	Total
January 1, 2020	53	5	58
January 1, 2021	35	14	49
January 1, 2022	3	45	48

Share-Based Compensation Expense

The following table summarizes pre-tax share-based compensation expense recognized (in thousands):



	Years ended December 31,
	2019		2018		2017
Restricted stock units	$	1,336	$	1,799	$	1,499

Share-based compensation expense is recognized ratably over the vesting period of the awards and for RSUs with performance criteria, is recognized for RSU's that are expected to vest and for which performance criteria are expected to be met.

During 2019, it was also determined that certain performance objectives associated with awards granted in 2017, 2018 and 2019 were not likely to be fully met, necessitating a reversal of certain compensation expense associated with those awards. As a net result, adjustments decreasing share based compensation expense totaling $0.8 million were recorded during the year based on anticipated performance levels.

During 2017, it was determined that certain performance objectives associated with awards granted in 2015 were likely to be met, when share based compensation expense related to these performance objectives had been reduced in prior years. This necessitated an increase to share-based compensation expense associated with those awards in 2017. However, it was also determined that certain performance objectives associated with awards granted in 2016 and 2017 were not likely to be fully met, necessitating a reversal of certain compensations expense associated with those awards. As a net result, adjustments increasing share based compensation expense totaling $0.4 million were recorded during the year based on anticipated performance levels.

The deferred tax benefit on share-based compensation expense was $0.1 million, $0.0 million, and $0.1 million for the years ended December 31, 2019, 2018, and 2017, respectively.

As of December 31, 2019, the Company had $1.2 million of unrecognized share-based compensation expense related to share-based awards that will be recognized over a weighted-average period of approximately 1.4 years.