Employee Benefit and Deferred Compensation Plans

9 Months Ended

Sep. 30, 2019

Employee Benefit and Deferred Compensation Plans

(In Thousands, Except Share Data)

Pension and Post-retirement Medical Plans

The Company sponsors a noncontributory defined benefit pension plan, under which participation and benefit accruals ceased as of December 31, 1996.

The Company provides retiree medical benefits, consisting of the opportunity to purchase coverage at subsidized rates under the Company’s group medical plan. Employees eligible to participate must: (i) have been employed by the Company and enrolled in the Company’s group medical plan as of December 31, 2004; and (ii) retire from the Company between ages 55 and 65 with at least 15 years of service or 70 points (points determined as the sum of age and service.) The Company periodically determines the portion of the premiums to be paid by each retiree and the portion to be paid by the Company. Coverage ceases when a retiree attains age 65 and is eligible for Medicare. The Company also provides life insurance for each retiree who receives retiree medical benefits. The face amount of the coverage is $5; coverage is provided until each retiree attains age 70. Retirees may purchase additional insurance or continue coverage beyond age 70 at their sole expense.

Information related to the defined benefit pension plan maintained by Renasant Bank (“Pension Benefits”) and to the post-retirement health and life plan (“Other Benefits”) as of the dates presented is as follows:



	Pension Benefits						Other Benefits
	Three Months Ended						Three Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Service cost	$	—		$	—		$	2		$	2
Interest cost	294			261			7			7
Expected return on plan assets	(362		)	(520		)	—			—
Recognized actuarial loss (gain)	110			82			(6		)	—
Net periodic benefit cost (return)	$	42		$	(177	)	$	3		$	9



	Pension Benefits						Other Benefits
	Nine Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Service cost	$	—		$	—		$	5		$	6
Interest cost	882			783			23			23
Expected return on plan assets	(1,087		)	(1,558		)	—			—
Recognized actuarial loss (gain)	331			246			(17		)	—
Net periodic benefit cost (return)	$	126		$	(529	)	$	11		$	29

Incentive Compensation Plans

The Company maintains a long-term equity compensation plan that provides for the grant of stock options and the award of restricted stock. The plan replaced the long-term incentive plan adopted in 2001, which expired in October 2011. Options granted under the plan permit the acquisition of shares of the Company’s common stock at an exercise price equal to the fair market value of the shares on the date of grant. Options are subject to time-based vesting and expire ten years after the date of grant. Options that do not vest or expire unexercised are forfeited and canceled. There were no stock options granted, nor compensation expense associated with options recorded, during the nine months ended September 30, 2019 or 2018.

The following table summarizes information about options outstanding, exercised and forfeited as of and for the nine months ended September 30, 2019:



	Shares		Weighted Average Exercise Price
Options outstanding at beginning of period	43,750		$	15.84
Granted	—		—
Exercised	(11,000	)	16.29
Forfeited	—		—
Options outstanding at end of period	32,750		$	15.69

The Company also awards performance-based restricted stock to executives and other officers and employees and time-based restricted stock to non-employee directors, executives, and other officers and employees. Performance-based awards are subject to the attainment of designated performance criteria during a fixed performance cycle. Performance criteria may relate to the Company’s performance or to the performance of an affiliate, region, division or profit center in each case measured on an absolute basis or relative to a defined peer group. The Company annually sets threshold, target, and superior levels of performance. Threshold performance must be attained for the vesting of any shares; superior performance must be attained for maximum payouts. Time-based restricted stock awards relate to a fixed number of shares that vest at the end of a designated service period.

The following table summarizes the changes in restricted stock as of and for the nine months ended September 30, 2019:



	Performance-Based Restricted Stock	Weighted Average Grant-Date Fair Value		Time- Based Restricted Stock		Weighted Average Grant-Date Fair Value
Nonvested at beginning of period	41,300	$	40.89	304,955		$	41.82
Awarded	154,250	30.18		307,854		32.11
Vested	—	—		(90,108	)	39.83
Cancelled	—	—		(13,483	)	41.10
Nonvested at end of period	195,550	$	32.44	509,218		$	36.32

During the nine months ended September 30, 2019, the Company reissued 116,252 shares from treasury in connection with the exercise of stock options and awards of restricted stock. The Company recorded total stock-based compensation expense of $3,002 and $1,844 for the three months ended September 30, 2019 and 2018, respectively, and $7,721 and $5,556 for the nine months ended September 30, 2019 and 2018, respectively.