Share-based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Compensation

Share-based Compensation

Note 9: Share-based Compensation

The Company currently grants share-based compensation in the form of restricted stock units and deferred stock units. The Company grants restricted stock units to members of management periodically throughout the year. Each restricted stock unit is equivalent to one share of the Company’s common stock. These units have requisite service periods ranging from one to five years. The Company annually grants share-based awards in the form of deferred stock units, which are restricted stock units with a deferred settlement date, to its board of directors. Each deferred stock unit is equivalent to one share of the Company’s common stock. The deferred stock units vest over a 12 month period following the grant date or on the date of the next Annual Meeting of Stockholders, whichever is earlier. These units generally are subject to the same terms as restricted stock units under the Company’s 2010 Equity Plan or the First Community 2016 Equity Plan, except that, following vesting, settlement occurs within 30 days following the earlier of separation from the board or a change in control of the Company. Subsequent to vesting and prior to delivery, these units will continue to earn dividend equivalents. The Company also has outstanding stock options granted prior to 2011 and stock options assumed from acquisitions.

A description of the 2010 Equity Incentive Plan, which was amended in 2015, can be found in the Company’s Proxy Statement for the 2015 Annual Meeting of Stockholders. A description of the First Community 2016 Equity Incentive Plan can be found in the Proxy Statement of First Community Financial Partners, Inc. for the 2016 Annual Meeting of Stockholders.

As further described in the Company’s Proxy Statement for the 2020 Annual Meeting of Stockholders, dated April 9, 2020, the Company’s stockholders will consider adoption of the First Busey Corporation 2020 Equity Incentive Plan, which the Company’s board of directors approved on March 25, 2020, at the 2020 Annual Meeting.

Stock Option Plan

A summary of the status of and changes in the Company's stock option awards for the three months ended March 31, 2020 follows:

		Weighted-		Weighted-
		Average		Average
		Exercise		Remaining Contractual
	Shares	Price		Term
Outstanding at beginning of period	53,185	$	22.00
Exercised	(5,280)		23.26
Forfeited	—		—
Expired	(88)		17.05
Outstanding at end of period	47,817	$	21.87	5.58
Exercisable at end of period	47,817	$	21.87	5.58

The Company did not record any stock option compensation expense for the three months ended March 31, 2020. The Company recorded an insignificant amount of stock option compensation expense for the three months ended March 31, 2019.

Restricted Stock Unit Plan

A summary of the changes in the Company’s stock unit awards for the three months ended March 31, 2020, is as follows:

		Weighted-		Director	Weighted-
	Restricted	Average		Deferred	Average
	Stock	Grant Date		Stock	Grant Date
	Units	Fair Value		Units	Fair Value
Non-vested at beginning of period	778,317	$	27.27	21,261	$	23.18
Granted	3,808		26.26	—		—
Dividend equivalents earned	6,612		25.50	780		25.50
Vested	(8,249)		29.50	—		—
Forfeited	(9,559)		28.96	(597)		25.50
Non-vested at end of period	770,929	$	27.21	21,444	$	23.20
Outstanding at end of period	770,929	$	27.21	91,278	$	23.40

Recipients earn quarterly dividend equivalents on their respective units which entitle the recipients to additional units. Therefore, dividends earned each quarter compound based upon the updated unit balances. Upon vesting/delivery, shares are expected (though not required) to be issued from treasury.

On February 5, 2020, under the terms of the 2010 Equity Incentive Plan, the Company granted 3,808 restricted stock units to a member of management.  As the stock price on the grant date of February 5, 2020 was $26.26, total compensation cost to be recognized is $0.1 million.  This cost will be recognized over a period of three years. Subsequent to the requisite service period, the awards will become 100% vested.

The Company recognized $1.1 million and $1.0 million of compensation expense related to both non-vested restricted stock units and deferred stock units for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, there was $10.9 million of total unrecognized compensation cost related to these non-vested stock awards. This cost is expected to be recognized over a period of 3.3 years.

As of March 31, 2020, 552,157 shares remain available for issuance pursuant to the Company’s 2010 Equity Incentive Plan, 31,057 shares remain available for issuance pursuant to the Company’s Employee Stock Purchase Plan and 313,136 shares remain available for issuance pursuant to the First Community 2016 Equity Incentive Plan.