Equity Compensation and Related Plans

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

United has an equity compensation plan that allows for grants of various share-based compensation. Options granted under the plan can have an exercise price no less than the fair market value of the underlying stock at the date of grant. The general terms of the plan include a vesting period (usually four years) with an exercisable period not to exceed ten years. Certain options and restricted stock unit awards provide for accelerated vesting if there is a change in control of United or certain other conditions are met (as defined in the plan document). As of December 31, 2019, 1.32 million additional awards could be granted under the plan.

Restricted stock units and options outstanding and activity for the years ended December 31 consisted of the following:



	Restricted Stock Units						Options
	Shares		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value (000’s)		Shares		Weighted Average Exercise Price		Weighted Average Remaining Term (Yrs.)	Aggregate Intrinsic Value (000’s)
December 31, 2016	690,970		$	18.60			72,665		$	34.34
Granted	270,339		26.50				—		—
Vested	(284,662	)	17.48				—		—
Expired	—		—				(1,538	)	147.60
Cancelled	(12,830	)	19.91				(10,840	)	75.08
December 31, 2017	663,817		22.40				60,287		24.12
Granted	416,484		30.54				—		—
Vested / Exercised	(290,013	)	20.18				(12,000	)	11.85
Cancelled	(30,542	)	23.65				(1,148	)	31.50
December 31, 2018	759,746		27.66				47,139		27.07
Granted	315,827		26.74				—		—
Vested / Exercised	(216,138	)	25.38		$	6,004	(13,000	)	16.34
Expired	—						(30,243	)	31.43
Cancelled	(51,011	)	27.18				(2,396	)	29.68
December 31, 2019	808,424		27.94		24,964		1,500		27.95		0.27	$	4
Vested / Exercisable
at December 31, 2019	—		—				1,500		27.95		0.27	4

The following is a summary of stock options outstanding at December 31, 2019:



Options Outstanding					Options Exercisable
Shares	Range	Weighted Average Price		Average Remaining Life	Shares	Weighted Average Price
500	20.00 - 25.00	$	22.95	0.22	500	$	22.95
1,000	30.01 - 30.45	30.45		0.29	1,000	30.45
1,500	20.00 - 30.45	27.95		0.27	1,500	27.95

No compensation expense relating to options was included in earnings for 2019. Compensation expense relating to options of $18,000 and $28,000, respectively, was included in earnings for 2018 and 2017. The amount of compensation expense for all periods was determined based on the fair value of options at the time of grant, multiplied by the number of options granted that were expected to vest, which was then amortized over the vesting period.

Compensation expense for restricted stock units without market conditions is based on the market value of United’s common stock on the date of grant. United recognizes the impact of forfeitures as they occur. The value of restricted stock unit awards is amortized into expense over the service period. Compensation expense recognized in the consolidated statements of income for employee restricted stock unit awards in 2019, 2018 and 2017 was $8.98 million, $5.69 million and $5.51 million, respectively. Of the expense related to restricted stock unit awards during the twelve months ended December 31, 2019, $1.38 million related to the modification of existing awards resulting from an acceleration of vesting of awards due to retirement and $740,000 related to awards granted in conjunction with an acquisition, both of which were recognized in merger-related and other charges in the consolidated statement of income. The remaining expense of $6.86 million was recognized in salaries and employee benefits expense, as was the entire amount for 2018. Of the expense recognized related to restricted stock unit awards during 2017, $696,000 related to the modification of existing awards resulting from an acceleration of vesting of unvested awards due to retirement, which was recognized in merger-related and other charges. The remaining expense of $4.82 million was recognized in compensation expense. In addition, in 2019, 2018, and 2017, $379,000, $338,000 and $287,000, respectively, was recognized in other operating expenses for restricted stock unit awards granted to members of United’s board of directors.

During 2019 and 2018, in addition to time-based restricted stock unit awards, United’s Board of Directors approved performance-based restricted stock unit awards with market conditions (“PSUs”). The PSUs will vest based on achieving, during the applicable

calendar-year performance periods, certain performance and market targets relative to a bank peer group. Achievement of the base-level performance and market targets for all applicable periods will result in the issuance of 96,910 shares, which are included in the outstanding balance in the table above. Additional shares may be issued if more stringent performance and market hurdles are met. The grant date per share fair market value of these PSUs was estimated using the Monte Carlo Simulation valuation model.

A deferred income tax benefit related to compensation expense for options and restricted stock units of $2.39 million, $1.54 million and $2.27 million was included in the determination of income tax expense in 2019, 2018 and 2017, respectively. As of December 31, 2019, there was $14.8 million of unrecognized compensation cost related to nonvested stock options and restricted stock units granted under the plan. The cost is expected to be recognized over a weighted-average period of 2.5 years.

United sponsors a Dividend Reinvestment and Stock Purchase Plan (“DRIP”) that allows participants who already own United’s common stock to purchase additional shares directly from the Company. The DRIP also allows participants to automatically reinvest their quarterly dividends in additional shares of common stock without a commission. In 2019, 2018 and 2017, 62,629, 7,307 and 4,404 shares, respectively, were issued under the DRIP.

United has an Employee Stock Purchase Program (“ESPP”) that allows eligible employees to purchase shares of common stock at a discount (10%), with no commission charges. During 2019, 2018 and 2017 United issued 20,928, 17,941 shares and 13,422 shares, respectively, through the ESPP.

United offers its common stock as an investment option in its deferred compensation plan. The common stock component is accounted for as an equity instrument and is reflected in the consolidated balance sheets as common stock issuable. The deferred compensation plan does not allow for diversification once an election is made to invest in United stock and settlement must be accomplished in shares at the time the deferral period is completed. United also allows restricted stock unit grantees to defer all or a portion of their awards into the deferred compensation plan upon vesting. At December 31, 2019 and 2018, United had 664,640 shares and 674,499 shares, respectively, of its common stock that was issuable under the deferred compensation plan.