XML 27 R17.htm IDEA: XBRL DOCUMENT v3.24.3
Stock-Based Compensation
 9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation STOCK-BASED COMPENSATION (Dollars In Thousands, Except Share and Per Share Amounts)
Arrow has established three stock-based compensation plans: a Long Term Incentive Plan, an Employee Stock Purchase Plan (ESPP) and an Employee Stock Ownership Plan (ESOP).

Long Term Incentive Plan
The Long Term Incentive Plan provides for the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units, performance units and performance shares. The Compensation Committee of the Board of Directors administers the Long Term Incentive Plan.

Restricted Stock Awards - In May 2024, the Company granted restricted stock awards which will generally vest over a four-year period. Unvested restricted stock will generally be forfeited if the recipient ceases to be employed by the Company, with limited exceptions. Grantees of restricted stock awards are entitled to receive all dividends and distributions declared and paid on restricted stock, or cash payments equivalent to such dividends or distributions, including those declared and paid during the vesting period.

The following table summarizes information about restricted stock awards for the year to date period ended September 30, 2024:
Restricted Stock Awards
Outstanding at January 1, 2024
— 
Granted22,230 
Vested (412)
Forfeited— 
Outstanding at September 30, 2024
21,818 

The following table presents information on the amounts expensed related to restricted stock for the three and nine month periods ended September 30, 2024 and 2023:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
Amount expensed$33 $— $54 $— 
Stock Options - Options may be granted at a price no less than the greater of the par value or fair market value of such shares on the date on which such option is granted, and generally expire ten years from the date of grant.  The options usually vest over a four-year period.

The following table summarizes information about stock option activity for the year to date period ended September 30, 2024:
SharesWeighted Average Exercise Price
Outstanding at January 1, 2024
305,308 $28.96 
Exercised(8,620)19.33 
Forfeited(40,063)28.47 
Outstanding at September 30, 2024
256,625 29.36 
Vested at Period-End200,923 28.75 
Expected to Vest55,702 31.55 
The following table presents information on the amounts expensed related to stock options for the three and nine month periods ended September 30, 2024 and 2023:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
Amount expensed$(7)$24 $152 $196 

The expense recorded during the third quarters of 2024 and 2023 reflect the reversal of previously recorded amounts related to forfeited stock options triggered by the departure of previous employees, including the prior President and CEO.

Restricted Stock Units - Historically, the Company has granted restricted stock units which give the recipient the right to receive shares of Company stock upon vesting. The fair value of each restricted stock unit is the market value of Company stock on the date of grant. 100% of the restricted stock unit awards vest three years from the grant date, unless vested or forfeited prior to vesting in accordance with the terms of the award. Once vested, the restricted stock units are no longer forfeitable. Vested units settle upon
retirement, as defined in the Arrow retirement plan, of the recipient. Unvested restricted stock unit awards will generally be forfeited if the recipient ceases to be employed by the Company, with limited exceptions.
There were no restricted stock units outstanding at any time during the three or nine month periods ended September 30, 2024. The following table summarizes information about restricted stock unit activity for the nine month period ended September 30, 2023:
Restricted Stock UnitsWeighted Average Grant Date Fair Value
Non-vested at January 1, 202313,925 30.47 
Granted5,164 31.47 
Vested(19,089)30.74 
Non-vested at September 30, 2023
— 
The following table presents information on the amounts expensed related to restricted stock units for the periods ended September 30, 2024 and 2023:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
Amount expensed$— $246 $— $321 


Employee Stock Purchase Plan
In April 2023, Arrow suspended the operation of the prior ESPP (the "Prior ESPP") as a result of the now resolved delay in filing the Annual Report on Form 10-K for the year ended December 31, 2022 (the "2022 Form 10-K") and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (the "2023 Q1 Form 10-Q") and the related effects under applicable securities laws. In October 2023, the Board of Directors approved the adoption of a new ESPP intended to satisfy the requirements of Section 423 of the Internal Revenue Code, which was effective January 1, 2024 (the "Qualified ESPP"). Under the Qualified ESPP, the amount of the discount is 10% below market price. Under the Prior ESPP, the amount of the discount was 5% below market price. Under current accounting guidance, a stock purchase plan with a discount of 5% or less is not considered a compensatory plan. The Qualified ESPP is considered a compensatory plan. The Qualified ESPP was approved by Arrow shareholders at the annual meeting of shareholders on June 5, 2024.

Employee Stock Ownership Plan
Arrow maintains an ESOP, pursuant to which substantially all employees of Arrow and its subsidiaries are eligible to participate upon satisfaction of applicable service requirements. The Company may make, and historically has made, a cash contribution to the ESOP each year.