XML 35 R23.htm IDEA: XBRL DOCUMENT v3.21.2
Share Based Compensation
 9 Months Ended
Sep. 30, 2021
Share-based Payment Arrangement [Abstract]  
Share Based Compensation SHARE-BASED COMPENSATION
Under the 2014 Long-Term Incentive Plan (“2014 LTIP”), stock options, SARs and RSUs have generally been granted with an exercise price equal to the fair value of Summit's common stock on the grant date. We periodically grant employee stock options to individual employees.

The fair value of our employee stock options and SARs granted under the Plans is estimated at the date of grant using the Black-Scholes option-pricing model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. Additionally, there may be other factors that would otherwise have a significant effect on the value of employee stock options and SARs granted but are not considered by the model. Because our employee stock options and SARs have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options and SARs at the time of grant. 

During third quarter 2021, we granted 54,947 SARs with a $8.97 grant date fair value per SAR that become exercisable ratably over seven years (14.3% per year) and expire ten years after the grant date. Also during 2021, we granted 122,542 SARs with an $8.40 grant date fair value per SAR that become exercisable ratably over five years (20% per year) and expire ten years after the grant date. There were no grants of SARs or stock options during 2020.

The fair value of our employee stock options and SARs granted under the Plans is estimated at the date of grant using the Black-Scholes option-pricing model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. Additionally, there may be other factors that would otherwise have a significant effect on the value of employee stock options and SARs granted but are not considered by the model. Because our employee stock options and SARs have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options and SARs at the time of grant. The assumptions used to value SARs granted in 2021 are as follows:


2021 grant with 7 year expiration2021 grant with 5 year expiration
Risk-free interest rate1.06 %0.74 %
Expected dividend yield3.00 %3.00 %
Expected common stock volatility55.59 %55.59 %
Expected life7 years5.5 years







A summary of our SAR and stock option activity during the first nine months of 2021 and 2020 is as follows:
 For the Nine Months Ended September 30,
 2021
Options/SARs
Aggregate
Intrinsic
Value (in thousands)
Remaining
Contractual
Term (Yrs.)		Weighted-Average
Exercise Price
Outstanding, January 1329,203 $20.47 
Granted177,489 21.85 
Exercised(5,800)3.85 
Forfeited— — 
Expired— — 
Outstanding, September 30500,892 $1,808 7.12$21.15 
Exercisable, September 30213,216 $1,287 5.00$18.90 


 For the Nine Months Ended September 30,
 2020
Options/SARs
Aggregate
Intrinsic
Value (in thousands)
Remaining
Contractual
Term (Yrs.)		Weighted-Average
Exercise Price
Outstanding, January 1330,703 $20.44 
Granted— — 
Exercised— — 
Forfeited— — 
Expired— — 
Outstanding, September 30330,703 $349 6.58$20.44 
Exercisable, September 30179,375 $349 5.52$17.03 

Grants of RSUs include time-based vesting conditions that generally vest ratably over a period of 3 to 5 years. During second quarter 2020, we granted 10,995 RSUs which will vest ratably over 4 years. During first quarter 2020, we granted 1,846 RSUs which will fully vest on the 2nd anniversary of the grant date.
RSUsWeighted Average Grant Date Fair Value
Nonvested, December 31, 202015,686 $20.40 
Granted— — 
Forfeited— — 
Vested(3,400)19.61 
Nonvested, September 30, 202112,286 $20.62 
RSUsWeighted Average Grant Date Fair Value
Nonvested, December 31, 20192,892 $25.93 
Granted12,841 18.19 
Forfeited— — 
Vested(651)25.60 
Nonvested, September 30, 202015,082 $20.45 

We recognize compensation expense based on the estimated number of stock awards expected to actually vest, exclusive of the awards expected to be forfeited.  During the first nine months of 2021 and 2020, total stock compensation expense for all share-based arrangements was $448,000 and $402,000 and the related deferred tax benefits were approximately $108,000 and $96,000. At September 30, 2021 our total unrecognized compensation expense related to all nonvested awards not yet recognized totaled $2.41 million and is expected to be recognized over the next 2.46 years.