XML 82 R25.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Stockholders' Equity | 12 Months Ended
--- | ---
Dec. 31, 2019
Share-based Payment Arrangement [Abstract] |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Share Authorization We are authorized to issue 80,000,000 shares of common stock, $0.01 per share par value. We had 25,703,490 and 25,880,362 shares issued and outstanding, net of 7,625,339 and 8,025,339 shares held in treasury at par, at December 31, 2018 and 2019, respectively. Stock Based Compensation Plans During the year ended December 31, 2019, we had two stock benefits plans in effect under which stock, restricted stock, stock options and performance awards have been granted or remain outstanding: the Second Amended and Restated 2006 Long-Term Incentive Plan (the “Amended and Restated 2006 Plan”) and the 2017 Omnibus Incentive Plan (the “2017 Plan”). The Amended and Restated 2006 Plan was terminated upon the approval of the 2017 Plan at the annual shareholders meeting on May 17, 2017. The termination of the Amended and Restated 2006 Plan does not affect the awards previously issued and outstanding. All stock-based plans are administered by the Compensation Committee appointed by our Board of Directors (the “Board”). The 2017 Plan provides for grants of options as non-qualified options or incentive stock options, restricted stock and performance awards. The 2017 Plan expires on May 17, 2027. The status of each of the plans at December 31, 2019 is as follows (shares in thousands):
| Shares Reserved |  | Shares Available to Issue |  | Options Outstanding |  | Performance Awards Outstanding (2)
Amended and Restated 2006 Plan | — |  |  | — |  |  | 844 |  |  | — |
2017 Plan | 2,801 |  | (1) | 1,848 |  |  | 234 |  |  | 569 |
Total | 2,801 |  |  | 1,848 |  |  | 1,078 |  |  | 569 |
(1) | Amount includes approximately 1,246,000 shares granted from the Amended and Restated 2006 Plan that were returned to the Company due to cancellations, to pay taxes on restricted stock vestings and to pay option price and taxes on option exercises.
(2) | Performance Awards are reserved at 200% of shares granted which is equal to the maximum payout in shares.
Restricted Stock During 2019, we issued restricted stock to certain employees totaling 25,550 shares that vest over a three year period and had an aggregate grant date market value of $0.5 million. In 2018, a total of 86,260 shares of restricted stock were awarded with a grant date market value of $2.2 million. In 2017, a total of 27,250 shares of restricted stock were awarded with a grant date market value of $0.8 million. A summary of the status of unvested restricted stock as of December 31, 2019, and changes during 2019, is presented below (shares in thousands):
Unvested stock awards | Shares |  | Weighted Average Grant Date Fair Value
Unvested at January 1, 2019 | 89 |  |  | $ | 25.38 |
Awards | 26 |  |  | 19.94 |
Vestings | (33 | ) |  | 25.19 |
Cancellations | (12 | ) |  | 24.84 |
Unvested at December 31, 2019 | 70 |  |  | $ | 23.56 |
We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for restricted stock awards of $0.7 million, $0.8 million and $0.8 million the years ended December 31, 2017, 2018 and 2019, respectively. As of December 31, 2019, we had $1.6 million of total unrecognized compensation costs related to unvested restricted stock awards, which are expected to be recognized over a weighted average period of approximately 1.4 years. Stock Options During 2019, we granted 100,000 options to a certain key employee at a weighted average exercise price of $24.35. These options will vest in one-fifth increments over a five-year period and have a ten-year term. The fair value of these options was $0.6 million. In 2018, a total of 212,940 stock options were awarded, the fair value of which was $1.4 million. In 2017, a total of 461,700 stock options were awarded, the fair value of which was $3.3 million. Options are granted with an exercise price equal to the closing price of our common stock on the date of grant. All of the options granted and outstanding under this plan have either a seven or ten-year term. We utilize the Black-Scholes option valuation model for estimating the fair value of our stock options. This model allows the use of a range of assumptions related to volatility, risk-free interest rate, expected holding period and dividend yield. The expected volatility utilized in the valuation model is based on the historical volatility of our stock price. The dividend yield and expected holding period are based on historical experience and management's estimate of future events. The risk-free interest rate is derived from the U.S. Treasury yield curve based on the expected life of the option in effect at the time of grant. The fair values of our stock options were calculated using the following weighted average assumptions, based on the methods described above for the years ended December 31, 2017, 2018 and 2019:
| 2017 |  | 2018 |  | 2019
Dividend yield | 0.75 | % |  | 1.18 | % |  | 1.23 | %
Expected volatility | 29.29 | % |  | 27.08 | % |  | 27.45 | %
Risk-free interest rate | 1.95 | % |  | 2.65 | % |  | 1.65 | %
Expected holding period (years) | 5.0 |  |  | 5.0 |  |  | 5.0 |
A summary of the stock options at December 31, 2017, 2018 and 2019 and changes during the three years ended December 31, 2019 is presented in the table and narrative below (shares in thousands):
| Years Ended December 31,
| 2017 |  | 2018 |  | 2019
| Shares |  | Wtd. Avg. Ex. Price |  | Shares |  | Wtd. Avg. Ex. Price |  | Shares |  | Wtd. Avg. Ex. Price
Outstanding at beginning of period | 1,650 |  |  | $ | 19.18 |  |  | 1,934 |  |  | $ | 20.85 |  |  | 1,523 |  |  | $ | 21.95 |
Granted | 462 |  |  | $ | 26.56 |  |  | 213 |  |  | $ | 25.43 |  |  | 100 |  |  | $ | 24.35 |
Exercised | (159 | ) |  | $ | 19.81 |  |  | (459 | ) |  | $ | 17.73 |  |  | (247 | ) |  | $ | 17.37 |
Canceled or expired | (19 | ) |  | $ | 23.17 |  |  | (165 | ) |  | $ | 25.34 |  |  | (298 | ) |  | $ | 21.96 |
Outstanding at end of year | 1,934 |  |  | $ | 20.85 |  |  | 1,523 |  |  | $ | 21.95 |  |  | 1,078 |  |  | $ | 23.22 |
Exercisable at end of year | 1,225 |  |  | $ | 18.68 |  |  | 1,001 |  |  | $ | 20.29 |  |  | 643 |  |  | $ | 22.02 |
The aggregate intrinsic value of the outstanding and exercisable stock options was $2.9 million and $2.4 million at December 31, 2019. The total intrinsic value of options exercised during the years ended December 31, 2017, 2018 and 2019 totaled $1.0 million, $3.9 million and $1.2 million, respectively. The total fair value of stock options vested during 2017, 2018 and 2019 totaled $1.5 million, $1.5 million and $0.9 million, respectively. We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for stock options of $1.5 million, $1.0 million and $0.7 million for the years ended December 31, 2017, 2018 and 2019, respectively. As of December 31, 2019, there was $1.9 million of unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options expected to be recognized over a weighted average period of approximately 3.02 years. The following table further describes our outstanding stock options at December 31, 2019:
| Options Outstanding |  | Options Exercisable
Actual Ranges of Exercise Prices | Number Outstanding at 12/31/19 |  | Weighted-Average Remaining Contractual Life |  | Weighted-Average Exercise Price |  | Number Exercisable at 12/31/19 |  | Weighted-Average Exercise Price
$5.70 - $5.94 | 43,871 |  |  | 1.69 |  | $ | 5.82 |  |  | 43,871 |  |  | $ | 5.82 |
$20.06 - $22.58 | 495,320 |  |  | 3.25 |  | $ | 21.89 |  |  | 84,240 |  |  | $ | 20.06 |
$24.35 - $26.93 | 538,944 |  |  | 7.95 |  | $ | 25.86 |  |  | 514,612 |  |  | $ | 23.72 |
$5.70 - $26.93 | 1,078,135 |  |  | 5.54 |  | $ | 23.22 |  |  | 642,723 |  |  | $ | 22.02 |
Performance Awards During 2019, we granted 306,623 performance awards to our leadership team and certain key employees, payable in shares. These awards will vest (if at all) in December 2023, provided that certain criteria surrounding our common stock price is achieved. The fair value of these performance awards was $1.6 million and was determined by using the Monte-Carlo simulation pricing model with the following assumptions:
Grant date | February 20, 2019 | August 1, 2019 | November 4, 2019 | December 2, 2019
Performance period | February 20, 2019 - December 31, 2023 | August 1, 2019 - December 31, 2023 | November 4, 2019 - December 31, 2023 | December 2, 2019 - December 31, 2023
Shares granted | 248,500 |  | 14,000 |  | 9,123 |  | 35,000 |
Simulation period (years) | 4.86 | 4.42 | 4.16 | 4.08
Expected volatility | 25.7 | % | 27.01 | % | 28.39 | % | 28.47 | %
Risk-free interest rate | 2.47 | % | 1.68 | % | 1.6 | % | 1.64 | %
Forfeiture rate | 7.17 | % | 7.17 | % | 7.17 | % | 7.17 | %
During 2018, we granted 113,320 performance awards to our leadership team and certain key employees, payable in shares. The fair value of these performance awards was $2.9 million and was determined by using the weighted average stock price on the grant date of $25.43. During 2017, we granted 105,540 performance awards to our leadership team and certain key employees, payable in shares. The fair value of these performance awards was approximately $2.8 million and was determined by using the weighted average stock price on the grant date of $26.56. On November 29, 2018, we cancelled all the Performance Award Agreements previously awarded to all individuals in 2016, 2017 and 2018, which resulted in a write-off of $3.3 million. Prior to such cancellation, each of the Agreements provided for contingent compensation, which was payable to such individuals in shares of common stock, based on our performance over a five-year period from the date of grant. We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for performance awards of $0.7 million, $4.4 million and $0.2 million during the years ended December 31, 2017, 2018 and 2019, respectively. The 2018 expense includes the write-off due to the cancellation of the performance awards. Employee Stock Purchase Plan We provide all employees the opportunity to purchase common stock through payroll deductions in our ESPP. Purchases are made quarterly; the price being 85% of the lower of the price on the first day of the plan entry date (beginning of the fiscal year) or the actual date of purchase (end of quarter). In 2019, employees purchased a total of 73,731 shares at a weighted average price of $13.18 per share. In 2018, employees purchased a total of 49,938 shares at a weighted average price of $18.56 per share. In 2017, employees purchased a total of 43,808 shares at a weighted average price of $22.43 per share. We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for our ESPP of approximately $0.2 million, $0.2 million and $0.3 million during the years ended December 31, 2017, 2018 and 2019, respectively. The fair values of the right (option) to purchase shares under the ESPP are estimated at the date of purchase with the four quarterly purchase dates using the following assumptions:
| 2017 |  | 2018 |  | 2019
Dividend yield | 0.9 | % |  | 1.4 | % |  | 1.4 | %
Expected volatility | 19 | % |  | 21 | % |  | 36 | %
Risk-free interest rate | 0.53%, 0.65%, 0.77%, 0.89% |  |  | 1.44%, 1.61%, 1.72%, 1.83% |  |  | 2.42%, 2.51%, 2.56%, 2.60% |
Expected life (years) | .25, .50, .75, 1.00 |  |  | .25, .50, .75, 1.00 |  |  | .25, .50, .75, 1.00 |
Expected volatilities are based on the historical volatility during the previous twelve months of the underlying common stock. The risk-free rate for the quarterly purchase periods is based on the U.S. Treasury yields in effect at the time of purchase. The expected life of the ESPP grants represents the calendar quarters from the beginning of the year to the purchase date (end of each quarter). Director Compensation Plans Our Director Compensation Policy provides for the following: (i) each independent director is entitled to an annual retainer of $75,000, payable in quarterly installments of $18,750 each at the end of the quarter; and (ii) the Lead Director and chairman of our Audit Committee are entitled to an additional annual retainer of $10,000, payable in quarterly installments of $2,500 each at the end of each quarter, and the chairman of our Corporate Governance and Compensation Committees are entitled to an additional annual retainer of $5,000, payable in quarterly installments of $1,250 each at the end of each quarter. Any new independent director will receive upon admission to the Board a grant of $25,000 (in addition to the independent director annual retainer prorated at the time the new director is admitted to the Board) which can be taken in cash or restricted shares of our common stock. The number of shares of such common stock will be determined by dividing the cash amount by the closing price of our common stock on the date of grant, which will be the date of admission to the Board. Effective May 16, 2018, our Board revised the Director Compensation Policy such that any Director may elect to receive their annual retainer, which is paid in quarterly installments, in unrestricted shares of our common stock, $0.01 par value by providing written notice as set forth in the Director Compensation Policy. The number of shares of such common stock shall be determined by dividing the cash amount of the retainer by the closing price of our common stock on the date of grant, which shall be the last business day of each quarter. Such common stock shall vest immediately upon grant. Any written notice to receive the retainer in common stock shall remain effective until notice otherwise is made in writing. Our Board also revised the Director Compensation Policy such that the new Director grant of $25,000 shall vest immediately. Prior to this change, the stock grant vested 50% immediately and 25% on each of the first and second anniversaries of admission. Pursuant to the revised Director Compensation Policy described above, for the year ended December 31, 2019, we granted 7,458 shares of our common stock to two Directors, which were valued at $0.2 million at a weighted average stock price of $20.78. We recorded compensation expense, which is included in General, administrative and other expenses, related to annual retainers and restricted stock awards of $0.4 million, $0.5 million and $0.5 million during the years ended December 31, 2017, 2018 and 2019, respectively. Cash Dividends For the years ended December 31, 2018 and 2019, our Board declared the following dividends payable on the dates below (in thousands, except per share amounts):
2019 | Per Share |  | Dollar Value
March 1st | $ | 0.075 |  |  | $ | 1,360 |
June 1st | $ | 0.075 |  |  | $ | 1,365 |
September 1st | $ | 0.075 |  |  | $ | 1,336 |
December 1st | $ | 0.075 |  |  | $ | 1,337 |
2018 | Per Share |  | Dollar Value
March 1st | $ | 0.075 |  |  | $ | 1,207 |
June 1st | $ | 0.075 |  |  | $ | 1,433 |
September 1st | $ | 0.075 |  |  | $ | 1,436 |
December 1st | $ | 0.075 |  |  | $ | 1,437 |
Accumulated other comprehensive income Our components of Accumulated other comprehensive income are as follows (in thousands):
| Accumulated Other Comprehensive Income
Balance at December 31, 2018 | $ | — |
Decrease in net unrealized gains associated with available-for-sale securities of the trusts | 5 |
Reclassification of net unrealized gain activity attributable to the Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus’ | (5 | )
Balance at December 31, 2019 | $ | — |

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration