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Note 10 - Stockholders' Equity and Stock Incentive Plans

12 Months Ended

Dec. 31, 2021

Shareholders' Equity and Share-based Payments [Text Block]

NOTE 10. STOCKHOLDERS' EQUITY AND STOCK INCENTIVE PLANS

Share Repurchase Program

We have in the past, and may in the future, acquire our equity securities through open market purchases, privately negotiated transactions, tender offers, exchange offers, redemptions or otherwise, upon such terms and at such prices as we may determine from time to time. On December 12, 2018, our Board of Directors authorized a share repurchase program of $100.0 million (the "2018 Plan"). On March 16, 2020, at which time $61.4 million remained available under the 2018 Plan, the Company suspended share repurchases under the program in order to preserve liquidity due to the COVID-19 pandemic. On October 21, 2021, our Board of Directors authorized an additional share repurchase program of $300.0 million (the "2021 Plan") and repurchases under the program resumed. There were 1.3 million shares, 0.7 million shares and 1.1 million shares repurchased during the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, $280.6 million remained available under the 2021 Plan. The 2018 Plan is fully depleted.

We are not obligated to repurchase any shares under these programs. Repurchases of common stock may also be made under Rule 10b5-1 plans, which would permit common stock to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The timing, volume and nature of share repurchases will be at the sole discretion of management, dependent on market conditions, applicable securities laws and other factors, and may be suspended or discontinued at any time.

The following table provides information regarding share repurchases during the referenced periods.⁽¹⁾

	*For the Year Ended December 31,*
*(In thousands, except per share data)*	*2021*		*2020*		*2019*
Shares repurchased ⁽²⁾		1,310		683		1,087
Total cost, including brokerage fees	$	80,782	$	11,121	$	28,045
Average repurchase price per share ⁽³⁾	$	61.67	$	16.29	$	25.80

⁽¹⁾ Shares repurchased reflect repurchases settled during the twelve months ended December 31, 2021, 2020 and 2019. These amounts exclude repurchases, if any, traded but not yet settled on or before December 31, 2021, 2020 and 2019.

⁽²⁾ All shares repurchased have been retired and constitute authorized but unissued shares.

⁽³⁾ Figures in the table may not recalculate exactly due to rounding. Average repurchase price per share is calculated based on unrounded numbers.

Subject to applicable corporate securities laws, repurchases under our stock repurchase program may be made at such times and in such amounts as we deem appropriate. Repurchases can be discontinued at any time that we feel additional purchases are not warranted. We intend to fund the repurchases under the stock repurchase program with existing cash resources and availability under our Credit Facility. We are subject to certain limitations regarding the repurchase of common stock, such as restricted payment limitations related to our outstanding notes and our Credit Facility.

Dividends

Dividends are declared at the discretion of our Board of Directors. We are subject to certain limitations regarding the payment of dividends, such as restricted payment limitations contained in our Credit Facility and the indentures for our outstanding notes.

On May 2, 2017, the Company announced that its Board of Directors had authorized the reinstatement of the Company’s cash dividend program. The dividends declared by the Board under this program are:

Declaration date	*Record date*	*Payment date*	*Amount per share*
December 7, 2018	December 28, 2018	January 15, 2019	$	0.06
March 4, 2019	March 15, 2019	April 15, 2019		0.06
June 7, 2019	June 17, 2019	July 15, 2019		0.07
September 17, 2019	September 27, 2019	October 15, 2019		0.07
December 17, 2019	December 27, 2019	January 15, 2020		0.07

On March 25, 2020, the Company announced that the cash dividend program has been suspended to help mitigate the financial impact of the COVID-19 pandemic. On February 3, 2022, the Company announced that its Board of Directors had authorized the reinstatement of the Company’s cash dividend program and has declared a quarterly dividend of $0.15 per share, to be paid April 15, 2022, to shareholders of record as of March 15, 2022.

Stock Incentive Plan

In April 2020, the Company's stockholders approved the 2020 Stock Incentive Plan (the "2020 Plan"), which amended and restated the Company's 2012 Stock Incentive Plan (the "2012 Plan") to (a) provide for a term ending ten years from the date of stockholder approval at the Annual Meeting, (b) state the number of shares of the Company's common stock authorized for issuance over the term of the 2020 Plan to be 3.3 million shares plus the aggregate number of shares remaining available for future awards under the 2012 Plan and the number of shares subject to outstanding awards under the 2012 Plan that would have again become available for issuance pursuant to new awards under the 2012 Plan, whether because the outstanding awards under the 2012 Plan are forfeited or canceled, expire or are settled in cash, or because the shares covered by such awards under the 2012 Plan are surrendered or withheld in payment of the award exercise or purchase price in satisfaction of tax withholding obligations, (c) remove the individual award limit and set an annual grant limit for non-employee directors, and (d) make certain other changes. Under our 2020 Plan, approximately 7.4 million shares remain available for grant at December 31, 2021. The number of authorized but unissued shares of common stock under this 2020 Plan as of December 31, 2021 was approximately 10.5 million shares.

Grants made under the 2020 Plan include provisions that entitle the grantee to automatic vesting acceleration in the event of a grantee’s separation from service (including as a result of retirement, death or disability), other than for cause (as defined), after reaching the defined age and years of service thresholds. These provisions result in the accelerated recognition of the stock compensation expense for those grants issued to employees who have met the stipulated thresholds.

Stock Options

Options granted under the 2020 Plan generally become exercisable ratably over a three-year period from the date of grant. Options that have been granted under the 2012 Plan and will be granted under the 2020 Plan have an exercise price equal to the market price of our common stock on the date of grant and will expire no later than ten years after the date of grant.

Summarized stock option plan activity is as follows:

						*Weighted-*
				*Weighted-*		*Average*
				*Average*		*Remaining*		*Aggregate*
	*Options*			*Option Price*		*Term*		*Intrinsic Value*
						*(In years)*		*(In thousands)*
Outstanding at January 1, 2019		1,179,026		$	11.98
Granted		—			—
Canceled		(48,941	)		13.72
Exercised		(242,357	)		9.81
Outstanding at December 31, 2019		887,728			12.48
Granted		—			—
Canceled		(2,000	)		8.34
Exercised		(240,380	)		8.23
Outstanding at December 31, 2020		645,348			14.07
Granted		—			—
Canceled		—			—
Exercised		(371,016	)		11.88
Outstanding at December 31, 2021		274,332		$	17.02		4.0	$	13,318

Exercisable at December 31, 2020		645,348		$	14.07		4.2	$	18,619

Exercisable at December 31, 2021		274,332		$	17.02		4.0	$	13,318

Share-based compensation costs related to stock option awards are calculated based on the fair value of each option grant on the date of the grant using the Black-Scholes option pricing model.

The following table summarizes the information about stock options outstanding and exercisable at December 31, 2021:

	*Options Outstanding*						*Options Exercisable*
			*Weighted-*
			*Average*
			*Remaining*		*Weighted-*				*Weighted-*
	*Number*		*Contractual*		*Average*		*Number*		*Average*
Range of Exercise Prices	*Outstanding*		*Life (Years)*		*Exercise Price*		*Exercisable*		*Exercise Price*
$9.86		32,000		1.9	$	9.86		32,000	$	9.86
11.57		23,431		2.9		11.57		23,431		11.57
17.75		130,383		4.9		17.75		130,383		17.75
19.98		88,518		3.9		19.98		88,518		19.98
$9.86-$19.98		274,332		4.0		17.02		274,332		17.02

The total intrinsic value of in-the-money options exercised during the years ended December 31, 2021, 2020 and 2019 was $17.9 million, $5.7 million, and $4.7 million, respectively. No options vested during the years ended December 31, 2021 and 2020 and there were no unrecognized share-based compensation costs related to unvested stock options as of December 31, 2021. The total fair value of options vested during the year ended December 31, 2019 was approximately $0.6 million.

Restricted Stock Units

Our 2020 Plan provides for the grant of Restricted Stock Units ("RSUs"). An RSU is an award that may be earned in whole, or in part, upon the passage of time, and that may be settled for cash, shares, other securities or a combination thereof. The RSUs do not contain voting rights and are not entitled to dividends. The RSUs are subject to the terms and conditions contained in the applicable award agreement and the 2020 Plan. Share-based compensation costs related to RSU awards are calculated based on the market price on the date of the grant.

We grant RSUs to members of management of the Company, which represents a contingent right to receive one share of our common stock upon vesting. An RSU generally vests on the third anniversary of its issuance and the share-based compensation expense is amortized to expense over the requisite service period.

We also annually award RSUs to certain members of our Board of Directors. RSU grants issued in 2020 and prior years are to be paid in shares of common stock upon the director’s cessation of service to the Company. Commencing with the 2021 grant, the shares are issued to the director when the RSU is granted. These RSUs are issued for past service; therefore, they are expensed on the date of issuance.

Summarized RSU activity is as follows:

				*Weighted-*
	*Restricted*			*Average Grant*
	*Stock Units*			*Date Fair Value*
Outstanding at January 1, 2019		1,713,867
Granted		555,749		$	28.46
Canceled		(10,100	)
Awarded		(490,759	)
Outstanding at December 31, 2019		1,768,757
Granted		45,150		$	29.17
Canceled		(54,752	)
Awarded		(531,402	)
Outstanding at December 31, 2020		1,227,753
Granted		456,492		$	52.59
Canceled		(27,782	)
Awarded		(466,633	)
Outstanding at December 31, 2021		1,189,830

As of December 31, 2021, there was approximately $6.6 million of total unrecognized share-based compensation costs related to unvested RSUs, which is expected to be recognized over approximately 1.7 years.

Performance Stock Units

Our 2020 Plan provides for the grant of Performance Stock Units ("PSUs"). A PSU is an award which may be earned in whole, or in part, upon the passage of time, and the attainment of performance criteria, and which may be settled for cash, shares, other securities or a combination thereof. The PSUs do not contain voting rights and are not entitled to dividends. The PSUs are subject to the terms and conditions contained in the applicable award agreement and our 2020 Plan. We annually award PSUs to certain members of management.

Each PSU represents a contingent right to receive a share of Boyd Gaming Corporation common stock; however, the actual number of common shares awarded is dependent upon the occurrence of: (i) a requisite service period; and (ii) an evaluation of specific performance conditions. The performance conditions are based on Company metrics for net revenue growth, EBITDA growth and return on invested capital, all of which are determined on a comprehensive annual three-year growth rate. Based upon actual and combined achievement, the number of shares awarded could range from zero, if no conditions are met, a 50% payout if only threshold performance is achieved, a payout of 100% for target performance, or a payout of up to 200% of the original award for achievement of maximum performance. Each condition weighs equally and separately in determining the payout and, based upon management's estimates at the service inception date, the Company is expected to meet the target for each performance condition. Therefore, the related compensation cost of these PSUs assumes all units granted will be awarded. Share-based compensation costs related to PSU awards are calculated based on the market price on the date of the grant.

These PSUs will vest three years from the service inception date, during which time achievement of the related performance conditions is periodically evaluated, and the number of shares expected to be awarded, and resulting compensation expense, is adjusted accordingly.

Performance Shares Vesting

The PSU grants awarded in fourth quarter 2017, 2016 and 2015 vested during first quarter 2021, 2020 and 2019, respectively. Common shares were issued based on the determination by the Compensation Committee of the Board of Directors of our actual achievement of net revenue growth, EBITDA growth and customer service scores for the three-year performance period of each grant. As provided under the provisions of our stock incentive plan, certain of the participants elected to surrender a portion of the shares to be received to pay the withholding and other payroll taxes payable on the compensation resulting from the vesting of the PSUs.

The PSU grant awarded in November 2017 resulted in a total of 90,444 shares being issued during first quarter 2021, representing approximately 0.33 shares per PSU. Of the 90,444 shares issued, a total of 30,129 were surrendered by the participants for payroll taxes, resulting in a net issuance of 60,315 shares due to the vesting of the 2017 grant. The actual achievement level under the award metrics equaled the estimated performance as of year-end 2020; therefore, the vesting of the PSUs did not impact compensation costs in our 2021 consolidated statement of operations.

The PSU grant awarded in November 2016 resulted in a total of 364,810 shares being issued during first quarter 2020, representing approximately 1.53 shares per PSU. Of the 364,810 shares issued, a total of 126,465 were surrendered by the participants for payroll taxes, resulting in a net issuance of 238,345 shares due to the vesting of the 2016 grant. The actual achievement level under the award metrics equaled the estimated performance as of year-end 2019; therefore, the vesting of the PSUs did not impact compensation costs in our 2020 consolidated statement of operations.

The PSU grant awarded in October 2015 resulted in a total of 395,964 shares being issued during first quarter 2019, representing approximately 1.67 shares per PSU. Of the 395,964 shares issued, a total of 125,004 were surrendered by the participants for payroll taxes, resulting in a net issuance of 270,960 shares due to the vesting of the 2015 grant. The actual achievement level under the award metrics equaled the estimated performance as of the year-end 2018; therefore, the vesting of the PSUs did not impact compensation costs in our 2019 consolidated statement of operations.

Summarized PSU activity is as follows:

				*Weighted-*
	*Performance*			*Average Grant*
	*Stock Units*			*Date Fair Value*
Outstanding at January 1, 2019		1,037,420
Granted		269,495		$	28.67
Performance Adjustment		158,858
Canceled		—
Awarded		(395,964	)
Outstanding at December 31, 2019		1,069,809
Granted		—		$	—
Performance Adjustment		126,375
Canceled		(11,328	)
Awarded		(388,611	)
Outstanding at December 31, 2020		796,245
Granted		127,250		$	55.25
Performance Adjustment		(180,861	)
Canceled		(2,071	)
Awarded		(92,774	)
Outstanding at December 31, 2021		647,789

As of December 31, 2021, there was approximately $2.6 million of total unrecognized share-based compensation costs related to unvested PSUs, which is expected to be recognized over approximately 1.4 years. Based on the current estimates of performance compared to the targets set for the respective PSU grants, the Company estimates that approximately 1.0 million shares will be issued to settle the PSUs outstanding at December 31, 2021.

Career Shares

Our Career Shares Program is a stock incentive award program for certain executive officers to provide for additional capital accumulation opportunities for retirement. The program incentivizes and rewards executives for their period of service. Our Career Shares Program was adopted in December 2006, and modified in October 2010, as part of the overall update of our compensation programs. The Career Shares Program rewards eligible executives with annual grants of Boyd Gaming Corporation stock units, to be paid out at retirement. The payout at retirement is dependent upon the executive's age at such retirement and the number of years of service with the Company. Executives must be at least 55 years old and have at least 10 years of service to receive any payout at retirement. Career Shares do not contain voting rights and are not entitled to dividends. Career Shares are subject to the terms and conditions contained in the applicable award agreement and our 2020 Plan. The Career Share awards are tranched by specific term, in the following periods: 10 years, 15 years and 20 years of service. These grants vest over the remaining period of service required to fulfill the requisite years in each of these tranches, and compensation expense is recorded in accordance with the specific vesting provisions. Share-based compensation costs related to Career Shares awards are calculated based on the market price on the date of the grant.

Summarized Career Shares activity is as follows:

				*Weighted-*
	*Restricted*			*Average Grant*
	*Stock Units*			*Date Fair Value*
Outstanding at January 1, 2019		1,021,285
Granted		67,719		$	21.27
Canceled		—
Awarded		(26,693	)
Outstanding at December 31, 2019		1,062,311
Granted		51,262		$	30.05
Canceled		(5,816	)
Awarded		(70,437	)
Outstanding at December 31, 2020		1,037,320
Granted		36,123		$	42.12
Canceled		(1,295	)
Awarded		(23,510	)
Outstanding at December 31, 2021		1,048,638

As of December 31, 2021, there was approximately $1.4 million of total unrecognized share-based compensation costs related to unvested Career Shares.

Share-Based Compensation

We account for share-based awards exchanged for employee services in accordance with the authoritative accounting guidance for share-based payments. Under the guidance, share-based compensation expense is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense, net of estimated forfeitures, over the employee's requisite service period.

The following table summarizes our share-based compensation costs by award type:

	*For the Year Ended December 31,*
*(In thousands)*	*2021*		*2020*			*2019*
Stock Options	$	—	$	—		$	52
Restricted Stock Units		21,599		11,131			14,301
Performance Stock Units		14,883		(3,166	)		9,525
Career Shares		1,291		1,237			1,324
Total share-based compensation costs	$	37,773	$	9,202		$	25,202

The PSU share based compensation credit for the year ended December 31, 2020 is due to a decline in the estimated achievement level as a result of the COVID-19 pandemic on Company performance.

The following table provides classification detail of the total costs related to our share-based employee compensation plans reported in our consolidated statements of operations:

	*For the Year Ended December 31,*
*(In thousands)*	*2021*		*2020*		*2019*
Gaming	$	873	$	539	$	628
Food & beverage		167		103		120
Room		79		49		57
Selling, general and administrative		4,437		2,738		3,195
Corporate expense		32,217		5,773		21,202
Total share-based compensation expense	$	37,773	$	9,202	$	25,202