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Stock Compensation | 12 Months Ended
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Dec. 31, 2019
Stock Compensation [Abstract] |
Stock Compensation | 15. Stock Compensation Overview We are currently authorized to grant and have available for grant the following number of shares under our stock plans as of December 31, 2019 and 2018:
|  | Authorized |  | Available for Grant
Plan |  | Shares |  | 2019 |  | 2018
1996 Discounted Employee Stock Purchase Plan, as amended |  | 1,900,000 |  | 234,000 |  | 295,000
2009 Equity and Cash Incentive Plan |  | 9,000,000 |  | 2,100,000 |  | 958,000
Total |  | 10,900,000 |  | 2,334,000 |  | 1,253,000
During 2019 the Company amended the 2009 Equity and Cash Incentive Plan to increase the authorized shares under the plan by 1.9 million shares. Upon the exercise of stock options or grants of RSAs, PSAs, RSUs, or PSUs, we may issue the required shares out of authorized but unissued common stock or out of treasury stock, at our discretion. Stock Awards In 2019 the Compensation Committee of our Board of Directors (the “Committee”) authorized awards from approved stock incentive plans of RSAs to non-employee directors, RSUs to certain employees, and RSAs and PSUs to certain Company officers, which, counting PSUs at target levels, together totaled 507,000 shares and had an aggregate grant date market value of $15.0 million. Two types of PSUs were granted in 2019, an annual grant with a one-year performance period (“Annual PSU”) and a special Long-Term Incentive Program PSU grant (“LTIP”), which has multiple performance periods over a five-year period. If the highest performance threshold is met, the Annual PSU granted in 2019 represents the right to receive up to 150% of the target number of shares of common stock. The performance component of the Annual PSU awards granted in 2019 is based on attaining specified levels of adjusted earnings before interest, taxes, depreciation, and amortization, (“EBITDA”), as defined in the Annual PSU grant documents, for the 2019 calendar year. The Annual PSU granted in 2019 earned approximately 83% of the target number of shares. If the highest performance thresholds are met, the PSUs granted in 2019 under the LTIP represent the right to receive up to 288%, and up to 192% for a certain key executive, of the target number of shares of common stock. The performance component of the LTIP awards granted in 2019 is based on attaining specified levels of adjusted revenue growth and gross margin, as defined in the LTIP grant document, for the years 2019 through 2023. The first performance period under the LTIP will not conclude until December 31, 2021. In 2018 the Committee authorized awards from approved stock incentive plans of RSAs to non-employee Directors, RSUs to certain employees, and RSAs and PSUs to certain Company officers, which, counting PSUs at target levels, together totaled 328,000 shares of common stock and had an aggregate grant date market value of $7.5 million. The performance component of PSU awards granted in 2018 was based on attaining specified levels of adjusted EBITDA, as defined in the PSU grant documents, for the 2018 calendar year. The PSUs granted in 2018 earned approximately 80% of the target number of shares. In 2017 the Committee authorized awards from approved stock incentive plans of RSAs to non-employee Directors, RSUs to certain employees, and RSAs, PSAs, and PSUs to certain Company officers, which, counting PSUs at target levels, together totaled 426,000 shares of common stock and had an aggregate grant date market value of $7.1 million. The performance component of PSU awards granted in 2017 was based on attaining specified levels of adjusted EBITDA, adjusted inventory levels, and adjusted trade accounts receivable days’ sales outstanding, each as defined in the PSU grant documents, for the 2017 calendar year. The PSUs granted in 2017 earned approximately 92% of the target number of shares. A summary of stock grant activity for the years ended December 31, 2019, 2018, and 2017 for RSAs, PSAs, RSUs, and PSUs, based on the target number of shares, is as follows:
|  |  |  | Weighted
|  |  |  | Average
|  |  |  | Grant Date
RSAs |  | Shares |  | Fair Value
Unvested at December 31, 2016 |  | 392,000 |  | $ | 10.64
Granted |  | 138,000 |  |  | 17.00
Vested |  | (129,000) |  |  | 10.84
Forfeited |  | (18,000) |  |  | 11.78
Unvested at December 31, 2017 |  | 383,000 |  |  | 12.81
Granted |  | 128,000 |  |  | 23.83
Vested |  | (136,000) |  |  | 12.96
Forfeited |  | (49,000) |  |  | 12.07
Unvested at December 31, 2018 |  | 326,000 |  |  | 17.19
Granted |  | 93,000 |  |  | 29.77
Vested |  | (149,000) |  |  | 14.45
Forfeited |  | (27,000) |  |  | 20.53
Unvested at December 31, 2019 |  | 243,000 |  |  | 23.30
|  |  |  | Weighted
|  |  |  | Average
|  |  |  | Grant Date
PSAs |  | Shares |  | Fair Value
Unvested at December 31, 2016 |  | 250,000 |  | $ | 10.18
Granted |  | -- |  |  | --
Vested |  | (250,000) |  |  | 10.18
Forfeited |  | -- |  |  | --
Unvested at December 31, 2017 |  | -- |  |  | --
Granted |  | -- |  |  | --
Vested |  | -- |  |  | --
Forfeited |  | -- |  |  | --
Unvested at December 31, 2018 |  | - |  |  | --
Granted |  | -- |  |  | --
Vested |  | -- |  |  | --
Forfeited |  | -- |  |  | --
Unvested at December 31, 2019 |  | - |  |  | --
|  |  |  | Weighted |  |  |
|  |  |  | Average |  |  |
|  |  |  | Remaining |  | Aggregate
|  |  |  | Contractual |  | Intrinsic
RSUs |  | Shares |  | Term in years |  | Value
Unvested at December 31, 2016 |  | 178,000 |  |  | 1.24 |  | $ | 3,405,000
Granted |  | 196,000 |  |  |  |  |  |
Vested |  | (64,000) |  |  |  |  |  |
Forfeited |  | (24,000) |  |  |  |  |  |
Unvested at December 31, 2017 |  | 286,000 |  |  | 1.26 |  |  | 5,477,000
Granted |  | 115,000 |  |  |  |  |  |
Vested |  | (99,000) |  |  |  |  |  |
Forfeited |  | (51,000) |  |  |  |  |  |
Unvested at December 31, 2018 |  | 251,000 |  |  | 1.05 |  |  | 7,123,000
Granted |  | 103,000 |  |  |  |  |  |
Vested |  | (101,000) |  |  |  |  |  |
Forfeited |  | (27,000) |  |  |  |  |  |
Unvested at December 31, 2019 |  | 226,000 |  |  | 0.93 |  |  | 6,131,000
Vested and expected to vest |  | 226,000 |  |  | 0.93 |  | $ | 6,131,000
|  |  |  | Weighted |  |  |
|  |  |  | Average |  |  |
|  |  |  | Remaining |  | Aggregate
|  |  |  | Contractual |  | Intrinsic
PSUs |  | Shares |  | Term in years |  | Value
Unvested at December 31, 2016 |  | 188,000 |  |  | 0.77 |  | $ | 3,603,000
Granted |  | 126,000 |  |  |  |  |  |
Vested |  | (128,000) |  |  |  |  |  |
Forfeited |  | (17,000) |  |  |  |  |  |
Unvested at December 31, 2017 |  | 169,000 |  |  | 0.71 |  |  | 3,236,000
Granted |  | 104,000 |  |  |  |  |  |
Vested |  | (109,000) |  |  |  |  |  |
Forfeited |  | (17,000) |  |  |  |  |  |
Unvested at December 31, 2018 |  | 147,000 |  |  | 0.72 |  |  | 4,179,000
Granted |  | 322,000 |  |  |  |  |  |
Vested |  | (87,000) |  |  |  |  |  |
Forfeited |  | (35,000) |  |  |  |  |  |
Unvested at December 31, 2019 |  | 347,000 |  |  | 2.33 |  |  | 9,400,000
Vested and expected to vest |  | 347,000 |  |  | 2.33 |  | $ | 9,400,000
During the years ended December 31, 2019, 2018, and 2017 the total fair value of $9.8 million, $7.3 million, and $11.1 million, respectively, in combined RSAs, PSAs, RSUs, and PSUs vested. Stock Options The Compensation Committee of our Board of Directors authorized grants of stock options from approved stock incentive plans to certain Company officers and employees totaling 169,000, 219,000, and 260,000 shares in 2019, 2018, and 2017, respectively, with exercise prices equal to the stock prices on the respective grant dates. A summary of our stock option activity for the years ended December 31, 2019, 2018, and 2017 is as follows:
|  |  |  |  |  |  | Weighted |  |  |
|  |  |  |  |  |  | Average |  |  |
|  |  |  | Weighted |  | Remaining |  | Aggregate
|  |  |  | Average |  | Contractual |  | Intrinsic
|  | Shares |  | Exercise Price |  | Term in years |  | Value
Outstanding at December 31, 2016 |  | 1,911,000 |  | $ | 8.59 |  |  | 3.55 |  | $ | 20,179,000
Granted |  | 260,000 |  |  | 16.30 |  |  |  |  |  |
Exercised |  | (394,000) |  |  | 6.30 |  |  |  |  |  |
Forfeited |  | (31,000) |  |  | 12.47 |  |  |  |  |  |
Expired |  | (5,000) |  |  | 7.01 |  |  |  |  |  |
Outstanding at December 31, 2017 |  | 1,741,000 |  |  | 10.19 |  |  | 3.64 |  |  | 15,598,000
Granted |  | 219,000 |  |  | 21.55 |  |  |  |  |  |
Exercised |  | (578,000) |  |  | 7.59 |  |  |  |  |  |
Forfeited |  | (49,000) |  |  | 14.10 |  |  |  |  |  |
Expired |  | -- |  |  | -- |  |  |  |  |  |
Outstanding at December 31, 2018 |  | 1,333,000 |  |  | 13.04 |  |  | 3.93 |  |  | 20,439,000
Granted |  | 169,000 |  |  | 29.62 |  |  |  |  |  |
Exercised |  | (334,000) |  |  | 9.87 |  |  |  |  |  |
Forfeited |  | (39,000) |  |  | 22.64 |  |  |  |  |  |
Expired |  | -- |  |  | -- |  |  |  |  |  |
Outstanding at December 31, 2019 |  | 1,129,000 |  |  | 16.14 |  |  | 3.67 |  |  | 12,763,000
Vested and expected to vest |  | 1,129,000 |  | $ | 16.14 |  |  | 3.67 |  | $ | 12,763,000
Exercisable at December 31, 2019 |  | 782,000 |  | $ | 12.55 |  |  | 2.89 |  | $ | 11,371,000
Other information concerning stock options for the years ended December 31 is as follows:
| 2019 |  | 2018 |  | 2017
Weighted-average fair value of options granted | $ | 11.47 |  | $ | 8.38 |  | $ | 5.97
Intrinsic value of options exercised |  | 6,519,000 |  |  | 9,961,000 |  |  | 4,748,000
Employees purchased common stock totaling 61,000, 83,000, and 93,000 shares in 2019, 2018, and 2017, respectively, through our ESPP. Stock Compensation Expense The following weighted-average assumptions were used to determine the fair value of options:
| 2019 |  | 2018 |  | 2017
| Stock |  | ESPP |  | Stock |  | ESPP |  | Stock |  | ESPP
| Options |  | Options |  | Options |  | Options |  | Options |  | Options
Expected life of options | 5.00 Years |  | 0.50 Years |  | 5.00 Years |  | 0.50 Years |  | 4.75 Years |  | 0.50 Years
Expected stock price volatility | 0.40 |  | 0.39 |  | 0.40 |  | 0.34 |  | 0.40 |  | 0.39
Risk-free interest rate | 2.54% |  | 2.35% |  | 2.64% |  | 1.73% |  | 1.87% |  | 0.85%
The following table summarizes stock compensation expense (in thousands):
| 2019 |  | 2018 |  | 2017
RSA, PSA, RSU, and PSU expense | $ | 7,451 |  | $ | 5,076 |  | $ | 5,335
Stock option and ESPP option expense |  | 1,960 |  |  | 1,732 |  |  | 1,978
Total stock compensation expense | $ | 9,411 |  | $ | 6,808 |  | $ | 7,313
Included in the total stock compensation expense, as applicable in each period, were expenses related to RSAs, PSAs, RSUs, PSUs, and stock options issued in each respective year, as well as those issued in prior periods that continue to vest during the period, and compensation related to our ESPP. These amounts were recorded as stock compensation expense and were subject to or normal allocation of expenses to inventory costs and deferred preservation costs. We capitalized $612,000, $484,000, and $394,000 in the years ended December 31, 2019, 2018, and 2017, respectively, of the stock compensation expense into our inventory costs and deferred preservation costs. As of December 31, 2019 we had total unrecognized compensation costs of $11.9 million related to RSAs, RSUs, and PSUs and $2.0 million related to unvested stock options. As of December 31, 2019 this expense is expected to be recognized over a weighted-average period of 1.5 years for RSUs, 1.4 years for stock options, 1.0 years for RSAs, and 2.3 years for PSUs. ‎

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