17. Stock Incentive Plans

Restricted Stock and Stock Options Plans

BBX Capital maintains the BBX Capital Corporation Amended and Restated 2014 Incentive Plan, as previously amended (the “2014 Plan”), which allows for the issuance of restricted stock awards of the Company’s Class A Common Stock and Class B Common Stock, the grant of options to purchase shares of the Company’s Class A Common Stock and Class B Common Stock, and the grant of performance-based cash awards. BBX Capital also previously maintained the BBX Capital 2005 Restricted Stock and Option Plan and the BBX Capital 2014 Stock Incentive Plan, which BBX Capital assumed from BCC in December 2016. The BBX Capital 2005 Restricted Stock and Option Plan was terminated during 2018 when the last option previously granted under the plan was exercised, and the BBX Capital 2014 Stock Incentive Plan was terminated during 2019 when the final stock-based award previously granted under the plan vested.

The 2014 Plan permits the issuance of awards for up to 3,300,000 shares of the Company’s Class A Common Stock and up to 10,700,000 shares of the Company’s Class B Common Stock. Awards for up to 2,817,776 shares of Class A Common Stock and 0 shares of Class B Common Stock remained available for grant under the 2014 Plan as of December 31, 2019; however, as described below, awards of 2,442,503 restricted shares of the Company’s Class A Common Stock were granted to the Company’s executive officers under the 2014 Plan in January 2020.

Vesting of awards granted under the 2014 Plan is established by the Compensation Committee of BBX Capital’s board of directors in connection with each grant of restricted stock awards or stock options. The maximum term of incentive and non-qualifying stock options issuable under the 2014 Plan is ten years. There were no stock options issued or outstanding under the 2014 Plan as of December 31, 2019.

Compensation cost for restricted stock awards and stock options is based on the fair value of the award on the measurement date, which is generally the grant date. The fair value of restricted stock awards is generally based on the market price of the Company’s common stock on the grant date, while the fair value of the Company’s stock options is estimated using the Black-Scholes option-pricing model. For awards that are subject only to service conditions, the Company recognizes compensation costs on a straight-line basis over the requisite service period of the awards, and the impact of forfeitures are recognized when they occur.

Restricted Stock Activity

The table below sets forth information regarding the Company’s unvested restricted stock award activity for the year ended December 31, 2019:



			Weighted
	Unvested		Average
	Restricted		Grant Date
	Stock		Fair Value
Unvested balance outstanding, beginning of period		3,186,546	$	5.32
Granted		1,923,975		6.12
Vested		(2,468,115)		4.65
Forfeited		—		—
Unvested balance outstanding, end of period		2,642,406	$	6.53
Available for grant at December 31, 2019		2,817,776

The Company issued restricted stock awards to certain officers during the years ended December 31, 2019 and 2018, while there were no restricted stock awards issued during the year ended December 31, 2017. The table below sets forth information regarding the restricted stock awards granted during the years ended December 31, 2019 and 2018:

Per Share

Number of

Weighted Average

Shares Underlying

Grant Date

Requisite

Grant Date

Award Type

Awards Granted

Fair Value

Service Period (1)

1/9/2018

Class B Common Stock

1,487,051

8.7

4 years

1/8/2019

Class B Common Stock

1,923,975

6.12

4 years

(1)

The awards vest ratably in annual installments over the requisite service period.

In addition to the above awards, on January 21, 2020, the Compensation Committee of BBX Capital’s board of directors granted awards of 2,442,503 restricted shares of BBX Capital’s Class A Common Stock to the Company’s executive officers under the 2014 Plan. The aggregate grant date fair value of the January 2020 awards was $10.2 million, and the shares vest ratably in annual installments of approximately 611,000 shares over four periods beginning on October 1, 2020.

In October 2019, award recipients surrendered a total of 222,848 shares of Class A Common Stock and 748,357 shares of Class B Common Stock to the Company to satisfy the $4.5 million tax withholding obligation associated with the vesting of 2,468,115 restricted shares. The Company retired the surrendered shares.

The fair value of shares of BBX Capital’s restricted stock awards which vested during the years ended December 31, 2019, 2018, and 2017 was $11.5 million, $24.0 million and $45.2 million, respectively, based on the fair value of BBX Capital’s common stock on the applicable vesting dates.

The Company recognized restricted stock compensation expense related to BBX Capital restricted stock awards of approximately $11.4 million, $12.9 million, and $12.3 million during the years ended December 31, 2019, 2018, and 2017, respectively, and recognized tax benefits of $0.4 million during the year ended December 31, 2017. There were no tax benefits recognized on restricted stock compensation expense for these awards during the years ended December 31, 2019 and 2018.

As of December 31, 2019, the total unrecognized compensation cost related to the Company’s unvested restricted stock awards was approximately $15.2 million. The cost is expected to be recognized over a weighted-average period of approximately 1.22 years.

Stock Option Activity

There were no options granted to employees or non-employee directors during the three-year period ended December 31, 2019.

During the years ended December 31, 2018 and 2017, the Company received net proceeds of approximately $245,000 and $63,000, respectively, upon the exercise of stock options, and the total intrinsic value of exercised options during such periods was $6,000 and $881,000, respectively. There were no stock options issued or outstanding during the year ended December 31, 2019.