Stock Compensation

3 Months Ended

Mar. 31, 2017

Stock Compensation

Stock Compensation

9. Stock Compensation

The Company has an equity incentive plan.  The Compensation Committee of the Company’s Board of Directors may grant awards under the plan in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards.  The maximum number of shares issuable under the equity incentive plan is 1,400,000 shares with 500,000 shares remaining to be issued at March 31, 2017.  All grants under the equity incentive plan will be issued to acquire shares at the fair value on date of grant.

As of March 31, 2017, all awards were restricted stock units.  Activity with respect to outstanding restricted stock units for the three months ended March 31, 2017 and 2016 was as follows:

		Weighted-
		Average
		Grant-Date Fair
	Shares	Value per Share
2017
Nonvested at January 1,  2017	226,690	$	25
Granted	131,801		23
Vested	(78,623)		25
Forfeited	(1,167)		21
Nonvested at March 31, 2017	278,701	$	25
2016
Nonvested at January 1,  2016	174,518	$	26
Granted	121,724		25
Vested	(60,425)		25
Nonvested at March 31, 2016	235,817	$	25

The Company recognized compensation expense of $0.6 million and $0.6 million for the three months ended March 31, 2017 and 2016, respectively.  The fair value as of the vesting date for the restricted stock units that vested during the three months ended March 31, 2017 and 2016 was $1.3 million and $0.9 million, respectively.  Upon vesting, unit holders have the option to net share-settle to cover the required withholding tax and the remaining amount is converted into an equivalent number of shares of common stock.   The total shares withheld were 20,996 and 15,234 for the three months ended March 31, 2017 and 2016, respectively, and were based on the value of the restricted stock units as determined by the Company’s closing stock price on the date of vesting.  Total payments for the employees’ tax obligations to the tax authorities amounted to $0.5 million and $0.4 million for the three months ended March 31, 2017 and 2016, respectively.  Other than reimbursements for tax withholdings, there was no cash received under the restricted stock unit arrangements.

The Company also has a performance based compensation plan.  The incentive compensation is settled in March of each year for the prior year services and is based on Company performance relative to certain company specific metrics.  The Company recognizes the expense during the performance period based on the expected compensation amount.  Beginning for the 2016 performance period, a specified portion of the compensation amount for certain employees are settled in Company shares based on the share price at the date of settlement.  The estimated performance based compensation to be settled in stock amounted to $0.2 million and $0.2 million for the three months ended March 31, 2017 and 2016, respectively.  The fair value of the shares granted under the plan in March 2017 amounted to $0.7 million.  Upon grant, employees were required to net share-settle to cover the required withholding tax.  Total payments for the employees’ tax obligations to the tax authorities by the Company amounted to $0.3 million. The net shares issued amounted to 17,174 shares which was based on the value of shares on the date of vesting.