Equity Compensation Plans

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

United has an equity compensation plan that allows for grants of various stock-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, 2021, 600,106 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, 2018	759,746	$	27.66			47,139	$	27.07
Granted	315,827	26.74				—	—
Vested / Exercised	(216,138)	25.38				(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				1,500	27.95
Granted	446,512	19.15				—	—
Vested / Exercised	(324,697)	26.42				—	—
Expired	—					(1,500)	27.95
Cancelled	(36,808)	25.73				—	—
December 31, 2020	893,431	23.75				—	—
Granted	302,701	30.34				62,743	8.30
Vested / Exercised	(330,598)	26.13		$	10,855	(27,283)	8.20			$	765

Cancelled	(57,060)	25.15				—	—
December 31, 2021	808,474	25.15		29,057		35,460	8.38		2.01	977
Vested / Exercisable
at December 31, 2021	—	—				35,460	8.38		2.01	977

Options granted in 2021 were related to the Aquesta acquisition, with the weighted average exercise price of Aquesta’s fully vested converted options determined pursuant to the purchase agreement. The value of the Aquesta options was determined using a Black-Scholes model and was included in the purchase price for the acquisition. Because the options were deep in the money and had very short remaining terms, the values were not materially different from the intrinsic value of the options. No compensation expense relating to options was included in earnings for 2021, 2020 or 2019.

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 2021 and 2020 was $6.07 million and $7.40 million, respectively, which was recognized in salaries and employee benefits expense. In 2019, compensation expense for employee restricted stock awards was $8.98 million, of which $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 2019 expense of $6.86 million was recognized in salaries and employee benefits expense. In addition, in 2021, 2020, and 2019, $489,000, $484,000 and $379,000, respectively, was recognized in other operating expenses for restricted stock unit awards granted to members of the Board.

During 2021, 2020, and 2019, in addition to time-based restricted stock unit awards, the Board approved PSUs. The PSUs 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 174,713 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.

Deferred income tax benefits related to compensation expense for options and restricted stock units of $1.67 million, $2.01 million and $2.39 million were included in the determination of income tax expense in 2021, 2020 and 2019, respectively. As of December 31, 2021, there was $15.5 million of unrecognized compensation cost related to restricted stock units granted under the plan. The cost is expected to be recognized over a weighted-average period of 2.5 years.