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Stockholders' Equity | 9 Months Ended
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Sep. 30, 2020
Share-based Payment Arrangement [Abstract] |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Restricted Stock During the three months ended September 30, 2020, we did not issue restricted stock. During the nine months ended September 30, 2020, we issued restricted stock to certain employees totaling 10,200 shares that vest over a three-year period and had an aggregate grant date market value of approximately $0.3 million at a weighted average stock price of $25.00. We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for restricted stock awards of $196,000 and $183,000, for the three months ended September 30, 2019 and 2020, respectively and $624,000 and $551,000 for the nine months ended September 30, 2019 and 2020, respectively. As of September 30, 2020, we had $1.1 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 1.2 years. Stock Options During the three months ended September 30, 2020, we did not issue stock options. During the nine months ended September 30, 2020, we granted 20,000 options to a certain key employee at a weighted average price of $18.02. These options will vest in one-third increments over a three-year period and have a ten-year term. The fair value of these options was $0.1 million. On June 26, 2020, we cancelled 100,000 options in connection with the resignation of our President and Chief Operating Officer. The fair value of the options granted were estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:
Grant date |  | June 25, 2020
Dividend yield |  | 1.67 | %
Expected volatility |  | 38.54 | %
Risk-free interest rate |  | 0.25 | %
Expected holding period (years) |  | 3.74
Black-Scholes value |  | $4.61
We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for stock options of $160,000 and $165,000, for the three months ended September 30, 2019 and 2020, respectively and $513,000 and $502,000 for the nine months ended September 30, 2019 and 2020, respectively. Performance Awards On May 19, 2020, we cancelled all Performance Award Agreements previously awarded to all individuals in 2019 and 2020. Concurrently with the cancellation, the Compensation Committee of the Board of Directors (the “Board”) approved a new performance award to be issued to certain employees. We granted 368,921 performance awards to certain eligible employees, payable in shares. These awards will vest (if at all) on December 31, 2024 provided that the Company’s common stock reaches one of five pre-determined growth targets for a sustained period beginning on the grant date of May 19, 2020 and ending on December 31, 2024. The new performance award was treated as a modification of the cancelled awards and resulted in an additional $1.7 million of incremental compensation costs, which are expected to be recognized over the remaining term of 51 months. On June 26, 2020, we cancelled 33,538 performance awards in connection with the resignation of our President and Chief Operating Officer. The following table reflects the performance awards granted during the nine months ended September 30, 2020, their respective fair values and the assumptions utilized in the Monte-Carlo simulation pricing model:
Grant date |  | May 19, 2020 |  | June 25, 2020 |  | July 30, 2020 |  | August 31, 2020
Performance period |  | May 19, 2020 - December 31, 2024 |  | June 25, 2020 - December 31, 2024 |  | July 30, 2020 - December 31, 2024 |  | August 31, 2020 - December 31, 2024
Awards granted |  | 368,921 |  | 13,974 |  | 2,795 |  | 6,987
Fair value (in millions) |  | $3.6 |  | $0.2 |  | $0.1 |  | $0.2
Simulation period (years) |  | 4.62 |  | 4.52 |  | 4.42 |  | 4.33
Share price at grant date |  | $15.79 |  | $18.02 |  | $23.10 |  | $22.14
Expected volatility |  | 34.54 | % |  | 36.24 | % |  | 37.43 | % |  | 37.71 | %
Risk-free interest rate |  | 0.33 | % |  | 0.29 | % |  | 0.20 | % |  | 0.24 | %
We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for performance awards of $61,000 and $286,000 for the three months ended September 30, 2019 and 2020, respectively and $138,000 and $589,000 for the nine months ended September 30, 2019 and 2020, respectively. Employee Stock Purchase Plan During the three months ended September 30, 2020, employees purchased a total of 15,706 at a weighted average price of $18.96 per share. During the nine months ended September 30, 2020, employees purchased a total of 59,020 shares at a weighted average price of $15.6 per share. The fair value of the right (option) to purchase shares under the ESPP is estimated at the date of purchase with the four quarterly purchase dates using the following assumptions:
Dividend yield | 0.01%
Expected volatility | 48.63%
Risk-free interest rate | 1.54%,1.57%,1.57%,1.56%
Expected life (years) | 0.25, 0.50, 0.75, 1.00
We recorded stock-based compensation expense, which is included in General, administrative and other expenses and Regional and unallocated funeral and cemetery costs, for the ESPP totaling $58,000 and $95,000 for the three months ended September 30, 2019 and 2020, respectively and $224,000 and $339,000 for the nine months ended September 30, 2019 and 2020, respectively. Good to Great Incentive Program On February 19, 2020, we issued 17,991 shares of our common stock to certain employees, which were valued at approximately $0.4 million at a grant date stock price of $25.00. Non-Employee Director Compensation On February 19, 2020, our Board revised the Director Compensation Policy to provide that each independent director is entitled to a quarterly retainer of $35,000, payable at the end of the quarter. On April 23, 2020, as part of our broad-based effort to respond to COVID-19, the Board approved a temporary reduction of the quarterly retainer for our non-employee directors from $35,000 per quarter to $29,750 per quarter (or 15%) effective April 19, 2020. On June 26, 2020, the Board voted to reinstate the quarterly retainer back to 100% effective as of June 28, 2020. During the three months ended September 30, 2020, we granted 8,540 shares of our common stock to six of our non-employee directors, which were valued at $0.2 million at a weighted average stock price of $22.41. For the nine months ended September 30, 2020, we granted an aggregate of 25,220 shares of our common stock to six of our non-employee directors, which were valued at $0.5 million at a weighted average stock price of $18.88. We recorded stock-based compensation expense, which is included in General, administrative and other expenses, related to annual retainers and common stock awards of $114,000 and $250,000 for the three months ended September 30, 2019 and 2020, respectively and $341,000 and $653,000 for the nine months ended September 30, 2019 and 2020, respectively. Share Repurchase During the three and nine months ended September 30, 2020, we did not repurchase any shares of our common stock pursuant to our share repurchase program. At September 30, 2020, we had approximately $25.6 million available for repurchases under our share repurchase program. Cash Dividends On May 19, 2020, the Board approved an increase of $0.05 to our annual dividend beginning with the dividend declaration in the third quarter of 2020. During the nine months ended September 30, 2020 and 2019, our Board declared the following dividends payable on the dates below (in thousands, except per share amounts):
2020 | Per Share |  | Dollar Value
March 1 st | $ | 0.0750 |  |  | $ | 1,339 |
June 1 st | $ | 0.0750 |  |  | $ | 1,343 |
September 1 st | $ | 0.0875 |  |  | $ | 1,569 |
2019 | Per Share |  | Dollar Value
March 1 st | $ | 0.0750 |  |  | $ | 1,360 |
June 1 st | $ | 0.0750 |  |  | $ | 1,365 |
September 1 st | $ | 0.0750 |  |  | $ | 1,336 |
See Note 19 to the Consolidated Financial Statements included herein for additional information related to our dividends. Accumulated other comprehensive income Our components of accumulated other comprehensive income are as follows (in thousands):
Three months ended September 30, 2020 |  |
|  | Accumulated Other Comprehensive Income
June 30, 2020 |  | $ | — |
Net unrealized gains associated with available-for-sale securities of the trusts | 3,540 |
Reclassification of net unrealized gains activity attributable to the Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus | (3,540) |
Balance at September 30, 2020 | $ | — |
Nine months ended September 30, 2020 |  |
|  | Accumulated Other Comprehensive Income
Balance at December 31, 2019 | $ | — |
Net unrealized losses associated with available-for-sale securities of the trusts | (7,263) |
Reclassification of net unrealized losses activity attributable to the Deferred preneed funeral and cemetery receipts held in trust and Care trusts’ corpus | 7,263 |
Balance at September 30, 2020 | $ | — |

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