XML 29 R17.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stock Based Compensation
 6 Months Ended
Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Based Compensation

Note 9. Stock-Based Compensation

 

The Company maintains three stock-based compensation plans from which new grants could be issued. The Company’s stock-based compensation plans permit Parent Corporation common stock to be issued to key employees and directors of the Company and its subsidiaries. Grants under the existing plans can be in the form of stock options (qualified or non-qualified), restricted shares, or performance units. Shares available for grant and issuance under the existing plans as of June 30, 2016 are 68,516 under the 2009 Equity Incentive Plan and 234,090 shares under the North Jersey Community Bancorp Equity Compensation Plan. The Company intends to issue all shares under these plans in the form of newly issued shares.

 

Restricted stock and option awards typically have a three-year vesting period starting one year after the date of grant with one-third vesting each year. The options generally expire ten years from the date of grant. Restricted stock awards granted to new employees and board members may be granted with shorter vesting periods. Grants of performance units typically have a cliff vesting after 3 years. All issuances are subject to forfeiture if the recipient leaves or is terminated prior to the awards vesting. Restricted shares have the same dividend and voting rights as common stock while options and performance units do not.

 

All awards are issued at fair value of the underlying shares at the grant date. The Company expenses the cost of the awards, which is determined to be the fair market value of the awards at the date of grant, ratably over the vesting period.

 

No options were granted during the three and six months ended June 30, 2016 or 2015.

 

During the three months ended June 30, 2016 and 2015 a total of 1,000 and 0 restricted shares were awarded, respectively. The compensation expense related to restricted stock awards during the quarter ended June 30, 2016 was $167,000.

 

During 2016 and 2015, the Company granted to various key employees performance unit awards, with each unit entitling the holder to one share of the Company’s common stock contingent upon the Company meeting or exceeding certain return on asset targets over the course of a three-year period commencing on January 1 of the year of issuance. Under the grant agreement, and assuming the Company has met or exceeded the applicable targets, grants of performance unit awards will vest on the third anniversary of the grant date or on an earlier date in the event of a change in control, as defined in the agreements. At June 30, 2016, the specific number of shares related to performance unit awards that were expected to vest was 132,304, determined by actual performance in consideration of the established range of the performance targets, which is consistent with the level of expense currently being recognized over the vesting period. Should this expectation change, additional compensation expense could be recorded in future periods or previously recognized expense could be reversed. The maximum amount of performance unit awards is 181,892 shares. The total amount of compensation cost related to performance unit awards included in salary expense during the quarter ended June 30, 2016 and 2015 was $267,000 and $102,000, respectively.

 

Option activity under the principal option plans as of June 30, 2016 and changes during the six months ended June 30, 2016 were as follows:

 

                Weighted-      
                Average      
          Weighted-   Remaining      
          Average   Contractual      
          Exercise   Term   Aggregate
    Shares   Price   (In Years)   Intrinsic Value
Outstanding at December 31, 2015   535,906     $     6.48          
Granted   -       -          
Exercised   (38,735 )     6.32          
Forfeited/cancelled/expired   (45,010 )     10.59          
Outstanding at June 30, 2016   452,161     $ 6.09   2.81   $     4,341,277
Exercisable at June 30, 2016        448,631     $ 6.02   2.77   $ 4,336,158

 

The aggregate intrinsic value of outstanding and exercisable options above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on June 30, 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2016. This amount changes based on the fair market value of the Parent Corporation’s stock.

 

Information related to stock option exercises during 2016:

 

  2016
Intrinsic value of options exercised $      398,890
Cash received from options exercised   244,625
Tax benefit realized from options exercised   53,631
Weighted average fair value of options granted   n/a

 

The aggregate intrinsic value of exercised options above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the date of exercise and the exercise price, multiplied by the number of in-the-money options) of all options that were exercised during the 6 month period ending June 30, 2016. The tax benefit is calculated on any non-qualified options exercised during the period using a 36% tax rate.

 

The below table represents information regarding restricted shares currently outstanding at June 30, 2016:

 

        Weighted-
        Average
  Nonvested   Grant Date
  Shares   Fair Value
Nonvested at December 31, 2015 96,902     $     16.81
Granted 72,920       15.88
Vested (55,648 )     16.01
Forfeited/cancelled/expired (1,000 )     19.58
Nonvested at June 30, 2016       113,174     $ 16.81

 

As of June 30 2016, there was $1,507,000 of total unrecognized compensation cost related to nonvested restricted shares granted under the plans. The cost is expected to be recognized over a weighted average period of 26.1 months. No shares vested during the quarter ended June 30, 2016.

 

A summary of the status of unearned performance unit awards and the change during the period is presented in the table below:

        Weighted-
        Average
        Grant Date
  Shares   Fair Value
Unearned at December 31, 2015 87,038     $     19.46
Awarded 52,713       17.15
 
Forfeited (7,447 )     19.46
Expired -       -
Unearned at June 30, 2016      132,304     $ 18.60

 

At June 30, 2016, compensation cost of $1,918,000 related to nonvested awards not yet recognized is expected to be recognized over a weighted-average period of 2.0 years.