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Share-Based Compensation | 9 Months Ended
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Sep. 30, 2020
Share-based Payment Arrangement [Abstract] |
Share-Based Compensation | Note 10—Shared-Based Compensation The components of the Company’s shared-based compensation expense for the nine months ended September 30, 2020 and 2019 are as follows:
| Nine Months Ended September 30, |  |
| 2020 |  | 2019
| (in thousands) |  |
Stock options | $ | 1,594 |  |  | $ | 1,970 |
Restricted stock and restricted stock units | 3,898 |  |  | 2,980 |
Employee Stock Purchase Plan | 425 |  |  | 518 |
Total pre-tax share-based compensation expense charged against income1 | $ | 5,917 |  |  | $ | 5,468 |
1.Share-based compensation expense is recorded in cost of services and selling, general and administrative expense in the Company’s Consolidated Statements of Comprehensive Income. At September 30, 2020, the unrecognized compensation cost related to unvested stock options and awards was $18.5 million. The weighted average period over which these awards will vest is approximately 2.9 years. 2020 Omnibus Incentive Plan On May 26, 2020, the Company adopted the 2020 Omnibus Incentive Plan (the "2020 Plan") after approval by the Company's Shareholders at the Annual Meeting of Shareholders. The 2020 Plan provides that current or prospective officers, employees, non-employee directors and advisors can receive share-based awards such as stock options, performance stock units, restricted stock units and other stock awards. The 2020 Plan seeks to encourage profitability and growth of the Company through short-term and long-term incentives that are consistent with the Company's operating objectives. As of September 30, 2020, there were 5.2 million shares of common stock reserved for issuance under the 2020 Plan, of which, 2.5 million are available for future grant. The amount of shares available for issuance under the 2020 Plan will increase when outstanding awards under the Company's Second Amended and Restated 2012 Equity Incentive Plan (the “2012 Plan”) are subsequently forfeited, terminated, lapsed, or satisfied thereunder in cash or property other than shares. No stock award will have a term in excess of 10 years. The Nominating, Compensation and Stock Option Committee of the Board of Directors is responsible for determining the terms of the grants in accordance with the 2020 Plan. 2012 Equity Incentive Plan The 2012 Plan was replaced by the 2020 Plan on May 26, 2020. Accordingly, no new equity awards will be granted under the 2012 Plan. Stock Options A summary of stock options outstanding under as of December 31, 2019 and changes during the nine months ended September 30, 2020 are as follows:
| Stock Options Outstanding |  |
| Number of Shares |  | Weighted Average Exercise Price
| (in thousands) |  |
December 31, 2019 | 2,107 |  |  | $ | 32.99 |
Granted | 215 |  |  | $ | 24.49 |
Exercised | (101) |  |  | $ | 17.72 |
Forfeited | (12) |  |  | $ | 37.66 |
Expired | (46) |  |  | $ | 32.18 |
September 30, 2020 | 2,163 |  |  | $ | 32.85 |
The weighted average grant-date fair value of stock options granted during the nine months ended September 30, 2020 and 2019 was $4.65 and $8.18 per common share, respectively. The total intrinsic value of stock options exercised during the nine months ended September 30, 2020 and 2019 was $0.9 million and $1.5 million, respectively. The fair value of stock option awards granted in 2020 and 2019 was estimated on the date of grant using the Black-Scholes option valuation model with the following assumptions:
| Nine Months Ended September 30, |  |
| 2020 |  | 2019
Risk-free interest rate | 1.8 | % |  | 2.5 | %
Weighted average expected life | 6.6 years |  | 5.7 years
Expected volatility | 26.6 | % |  | 22.6 | %
Dividend yield | 3.2 | % |  | 1.9 | %
The following table summarizes other information about the stock options at September 30, 2020:
| September 30, 2020
| (amounts in thousands, except per share data)
Outstanding: |
Aggregate intrinsic value | $ | 809 |
Weighted average remaining contractual life | 5.4 years
Exercisable: |
Number of options | 1,440 |
Weighted average exercise price | $ | 31.09 |
Aggregate intrinsic value | $ | 809 |
Weighted average remaining contractual life | 4.2 years
Restricted Stock Units and Restricted Stock The fair value of outstanding restricted stock units and restricted stock was determined based on the market price of the shares on the date of grant. During the nine months ended September 30, 2020, the Company granted 0.3 million restricted stock units with a weighted average grant date fair value of $24.43 per unit. During the nine months ended September 30, 2019, the Company granted 0.2 million restricted stock units with a weighted average grant date fair value of $40.49 per unit. During the nine months ended September 30, 2020 and 2019, the Company did not grant any restricted stock. A summary of the outstanding restricted stock units and restricted stock as of December 31, 2019 and changes during the nine months ended September 30, 2020 is as follows:
| Restricted Stock Units and Restricted Stock |  |
| Number |  | Weighted Average Grant Date Fair Value
| (in thousands) |  |
December 31, 2019 | 362 |  |  | $ | 43.24 |
Granted | 307 |  |  | $ | 24.43 |
Vested | (94) |  |  | $ | 42.40 |
Forfeited | (13) |  |  | $ | 32.83 |
September 30, 2020 | 562 |  |  | $ | 33.33 |
Employee Stock Purchase Plan The Company’s Employee Stock Purchase Plan ("ESPP") is currently available through 2021 to all eligible employees. All full-time and part-time employees who work an average of 20 hours per week and have completed two years of continuous service with the Company are eligible to participate. Annual offerings commence and terminate on the respective year’s first and last calendar day. Under the ESPP, the Company is authorized to issue up to 4.1 million shares of its common stock to its employees. Pursuant to such authorization, there are 2.1 million shares available for future grant at September 30, 2020. The expense associated with the options granted under the ESPP during the nine months ended September 30, 2020 and 2019 was estimated on the date of grant using the Black-Scholes option valuation model with the following assumptions:
| Nine Months Ended September 30, |  |
| 2020 |  | 2019
Risk-free interest rate | 1.6% |  | 2.6%
Weighted average expected life (years) | 1.0 |  | 1.0
Expected volatility | 42.0% |  | 30.8%
Dividend yield | 3.3% |  | 1.9%
Deferred Compensation Plan The Company offers a Supplemental Executive Retirement Plan (“SERP”) for executives and certain key employees. The SERP allows participants to defer a portion of their earned income on a pre-tax basis and as of the last day of each plan year, each participant will be credited with a match of a portion of their deferral in the form of the Company’s common stock based on the then-current market value. Under the SERP, the Company is authorized to issue 1.0 million shares of its common stock to its employees. Pursuant to such authorization, the Company has 0.4 million shares available for future grant at September 30, 2020. At the time of issuance, such shares are accounted for at cost as treasury stock. The following table summarizes information about the SERP during the nine months ended September 30, 2020 and 2019:
| Nine Months Ended September 30, |  |
| 2020 |  | 2019
| (in thousands) |  |
SERP expense 1 | $ | 444 |  |  | $ | 497 |
Unrealized gain recorded in SERP liability account | $ | 3,973 |  |  | $ | 4,964 |
1.Both the SERP match and the deferrals are included in the selling, general and administrative caption in the Consolidated Statements of Comprehensive Income.

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