Share-Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Share-Based Compensation

SHARE-BASED COMPENSATION

At September 30, 2020, Old National had 2.9 million shares remaining available for issuance under the Company’s Amended and Restated 2008 Incentive Compensation Plan.  The granting of awards to key employees is typically in the form of restricted stock awards or units.

Restricted Stock Awards

Old National granted 360 thousand time-based restricted stock awards to certain key officers during the nine months ended September 30, 2020, with shares vesting generally over a 36 month period.  Compensation expense is recognized on a straight-line basis over the vesting period.  Shares are subject to certain restrictions and risk of forfeiture by the participants.  At September 30, 2020, unrecognized compensation expense was estimated to be $6.6 million for unvested restricted stock awards.  The cost is expected to be recognized over a weighted-average period of 2.3 years.

Old National recorded share-based compensation expense, net of tax, related to restricted stock awards of $0.7 million during the three months ended September 30, 2020 and $1.9 million during the nine months ended September 30, 2020, compared to $0.7 million during the three months ended September 30, 2019 and $1.9 million during the nine months ended September 30, 2019.

Restricted Stock Units

Old National granted 210 thousand shares of performance based restricted stock units to certain key officers during the nine months ended September 30, 2020, with shares vesting at the end of a 36 month period based on the achievement of certain targets.  For certain awards, the level of performance could increase or decrease the number of shares earned.  Compensation expense is recognized on a straight-line basis over the vesting period.  Shares are subject to certain restrictions and risk of forfeiture by the participants.  At September 30, 2020, unrecognized compensation expense was estimated to be $4.4 million.  The cost is expected to be recognized over a weighted-average period of 1.9 years.

Old National recorded share-based compensation expense, net of tax, related to restricted stock units of $0.6 million during the three months ended September 30, 2020 and $2.6 million during the nine months ended September 30, 2020, compared to $1.0 million during the three months ended September 30, 2019 and $2.6 million during the nine months ended September 30, 2019.

Stock Options and Appreciation Rights

Old National has not granted stock options since 2009. However, Old National did acquire stock options and stock appreciation rights through prior year acquisitions. Old National recorded no incremental expense associated with the conversion of these options and stock appreciation rights. At September 30, 2020, 49 thousand stock appreciation rights remained outstanding.