Stock Based Compensation

6 Months Ended

Jun. 30, 2020

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Based Compensation

15. STOCK BASED COMPENSATION

On May 12, 2020, United’s shareholders approved the 2020 Long-Term Incentive Plan (“2020 LTI Plan”). The 2020 LTI Plan became effective May 13, 2020. An award granted under the 2020 LTI Plan may consist of any non-qualified stock options or incentive stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, performance units or other-stock-based award. These awards all relate to the common stock of United. The maximum number of shares of United common stock which may be issued under the 2020 LTI Plan is 2,300,000. The 2020 LTI Plan will be administered by a board committee appointed by United’s Board of Directors (the “Board”). Unless otherwise determined by the Board, the Compensation Committee of the Board (the “Committee”) shall administer the 2020 LTI Plan. The maximum number of options and stock appreciation rights, in the aggregate, which may be awarded to any individual key employee during any calendar year is 100,000. The maximum number of options and stock appreciation rights, in the aggregate, which may be awarded to any non-employee director during any calendar year is 10,000 or, if such Award is payable in cash, the Fair Market Value equivalent thereof. The maximum number of shares of restricted stock or shares subject to a restricted stock units award that may be granted during any calendar year is 50,000 shares to any individual key employee and 10,000 shares to any individual non-employee director. Subject to certain change in control provisions, the 2020 LTI Plan provides that all awards will vest as the Committee determines in the award agreement, provided that no awards will vest sooner than 1/3 per year over the first three anniversaries of the award. United adopted a clawback policy that applies to named executive officers and other executive officers and permits the Committee to cancel certain awards to recoup gains realized from previous awards should United be required to prepare an accounting restatement due to materially inaccurate performance metrics. A Form S-8 was filed on May 29, 2020 with the Securities and Exchange Commission to register all the shares which were available for the 2020 LTI Plan. The 2020 LTI Plan replaces the 2016 LTI Plan.

Compensation expense of $1,369 and $2,622 related to the nonvested awards under United’s Long-Term Incentive Plans was incurred for the second quarter and first six months of 2020, respectively, as compared to the compensation expense of $1,198 and $2,311 related to the nonvested awards under United’s Long-Term Incentive Plans incurred for the second quarter and first six months of 2019, respectively. Compensation expense was included in employee compensation in the unaudited Consolidated Statements of Income.

Stock Options

United currently has options outstanding from various option plans other than the 2020 LTI Plan (the “Prior Plans”); however, no common shares of United stock are available for grants under the Prior Plans as these plans have expired. Awards outstanding under the Prior Plans will remain in effect in accordance with their respective terms. The maximum term for options granted under the plans is ten (10) years.

A summary of activity under United’s stock option plans as of June 30, 2020, and the changes during the first six months of 2020 are presented below:

	Six Months Ended June 30, 2020
						Weighted Average
				Aggregate		Remaining
				Intrinsic		Contractual		Exercise
	Shares			Value		Term (Yrs.)		Price
Outstanding at January 1, 2020		1,715,316						$	34.49
Assumed in Carolina Financial merger		117,116							12.14
Granted		183,551							32.51
Exercised		(14,994	)						20.48
Forfeited or expired		(8,915	)						28.47
Outstanding at June 30, 2020		1,992,074		$	2,513		5.5	$	33.13
Exercisable at June 30, 2020		1,446,719		$	2,513		4.4	$	31.67

The following table summarizes the status of United’s nonvested stock option awards during the first six months of 2020:

	Shares			Weighted-Average Grant Date Fair Value Per Share
Nonvested at January 1, 2020		589,737		$	7.62
Granted		183,551			5.65
Vested		(225,582	)		7.68
Forfeited or expired		(2,351	)		7.32
Nonvested at June 30, 2020		545,355		$	6.93

During the six months ended June 30, 2020 and 2019, 14,994 and 47,960 shares, respectively, were issued in connection with stock option exercises. All shares issued in connection with stock option exercises for the six months ended June 30, 2020 and 2019 were issued from authorized and unissued stock. The total intrinsic value of options exercised under the Plans during the six months ended June 30, 2020 and 2019 was $249 and $713 respectively.

Restricted Stock

Under the 2020 LTI Plan, United may award restricted common shares to key employees and non-employee directors. Restricted shares granted to participants will vest no sooner than 1/3 per year over the first three anniversaries of the award. Unless determined by the Committee or the Board and provided in the award agreement, recipients of restricted shares do not pay any consideration to United for the shares, have the right to vote all shares subject to such grant and receive all dividends with respect to such shares, whether or not the shares have vested. Presently, these nonvested participating securities have an immaterial impact on diluted earnings per share.

The following summarizes the changes to United’s restricted common shares for the period ended June 30, 2020:

	Number of Shares			Weighted-Average Grant Date Fair Value Per Share
Outstanding at January 1, 2020		247,896		$	39.20
Granted		175,495			32.51
Vested		(88,671	)		39.32
Forfeited		(946	)		36.58
Outstanding at June 30, 2020		333,774		$	35.66