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Stockholders' Equity | 9 Months Ended
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Sep. 30, 2021
Share-based Payment Arrangement [Abstract] |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Restricted Stock Restricted stock activity is as follows (in thousands, except shares):
| Three months ended September 30, |  | Nine months ended September 30,
| 2020 |  | 2021 |  | 2020 |  | 2021
| Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value
Granted(1) | — |  | $ | — |  |  | — |  | $ | — |  |  | 10,200 |  | $ | 255 |  |  | 9,300 |  | $ | 324 |
Returned for payroll taxes | 714 |  | $ | 16 |  |  | 711 |  | $ | 28 |  |  | 10,588 |  | $ | 250 |  |  | 10,399 |  | $ | 375 |
Cancelled | — |  | $ | — |  |  | — |  | $ | — |  |  | — |  | $ | — |  |  | 966 |  | $ | 27 |
(1) | Restricted stock granted during the nine months ended September 30, 2020 and 2021 vest over a three-year period at a weighted average stock price of $25.00 and $34.79, respectively.
We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for restricted stock awards of $183,000 and $89,000, for the three months ended September 30, 2020 and 2021, respectively and $551,000 and $308,000, for the nine months ended September 30, 2020 and 2021, respectively. Stock Options During the nine months ended September 30, 2021, we granted 150,000 options to a certain key employee at a weighted average price of $34.79. These options will vest when the price of our common stock closes at or above $53.39 (50,000 options) and $77.34 (100,000 options) for three consecutive days within the ten-year term and the employee has remained continuously employed by us through such date. The fair value of these options was $1.7 million. In addition, in accordance with the terms of the separation agreement, we accelerated 12,980 options in connection with the resignation of an employee which resulted in an additional $129,000 of stock-based compensation expense. Additional stock option activity is as follows (in thousands, except shares):
| Three months ended September 30, |  | Nine months ended September 30,
| 2020 |  | 2021 |  | 2020 |  | 2021
| Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value
Granted(1) | — |  | $ | — |  |  | — |  | $ | — |  |  | 20,000 |  | $ | 92 |  |  | 701,400 |  | $ | 7,115 |
Cancelled | 8,800 |  | $ | 52 |  |  | 6,000 |  | $ | 61 |  |  | 146,034 |  | $ | 846 |  |  | 19,684 |  | $ | 181 |
(1) | Stock options granted during the nine months ended September 30, 2020 and 2021 had a weighted average price of $18.02 and $34.79, respectively. The options granted in 2020 vest over a three-year period and have a ten-year term. The options granted in 2021 vest over a five-year period and have a ten-year term.
| Three months ended September 30, |  | Nine months ended September 30,
| 2020 |  | 2021 |  | 2020 |  | 2021
| Shares | Cash |  | Shares | Cash |  | Shares | Cash |  | Shares | Cash
Exercised(1) | 17,913 |  | N/A |  | 32,665 |  | N/A |  | 17,913 |  | N/A |  | 314,294 |  | N/A
Returned for option price(2) | 4,426 |  | $ | — |  |  | 17,790 |  | $ | — |  |  | 4,426 |  | $ | — |  |  | 166,359 |  | $ | 880 |
Returned for payroll taxes(3) | 1,333 |  | $ | 31 |  |  | 2,192 |  | $ | 82 |  |  | 1,333 |  | $ | 31 |  |  | 20,163 |  | $ | 1,058 |
(1) | Stock options exercised during the three months ended September 30, 2020 and 2021 had a weighted average exercise price of $5.70 and $21.81, respectively, with an aggregate intrinsic value of $0.3 million and $0.6 million, respectively. Stock options exercised during the nine months ended September 30, 2020 and 2021 had a weighted average exercise price of $5.70 and $21.78 respectively, with an aggregate intrinsic value of $0.3 million and $5.0 million, respectively.
(2) | Represents cash received for the payment of the option price.
(3) | Represents cash withheld for the payment of payroll taxes.
We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for stock options, including the accelerated stock options discussed above of $165,000 and $467,000, for the three months ended September 30, 2020 and 2021, respectively and $502,000 and $1,507,000, for the nine months ended September 30, 2020 and 2021, respectively. Performance Awards During the nine months ended September 30, 2020, we issued 237,500 performance awards to certain employees, payable in shares, with a fair value of $2.8 million. On May 19, 2020, we cancelled all performance award agreements previously awarded to all individuals during 2019 and the February 19, 2020 award. Concurrently with the cancellation, the Compensation Committee of the Board of Directors (the “Board”) approved 368,921 new performance awards to be issued to certain employees. These new performance awards were treated as a modification of the cancelled awards and resulted in an additional $1.7 million of incremental compensation expense. On June 1, 2021, we amended the performance award agreements granted on May 19, 2020 for three of our executives. The amendment increased the amount of performance awards payable in shares for the last three predetermined growth targets. These awards will vest (if at all) on December 31, 2024, provided that the Company’s common stock reaches the predetermined growth targets for the sustained period ending on December 31, 2024. The amendment was treated as a modification of the original performance award agreement and resulted in an additional $2.6 million of incremental compensation expense, expected to be recognized over the remaining term of 43 months. Additional performance award activity is as follows (in thousands, except shares):
| Three months ended September 30, |  | Nine months ended September 30,
| 2020 |  | 2021 |  | 2020 |  | 2021
| Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value
Granted | 9,782 |  | $ | 244 |  |  | 29,548 |  | $ | 1,062 |  |  | 23,756 |  | $ | 469 |  |  | 39,802 |  | $ | 1,464 |
Cancelled | — |  | $ | — |  |  | 6,987 |  | $ | 101 |  |  | 33,538 |  | $ | 631 |  |  | 41,922 |  | $ | 598 |
The fair values of the performance awards granted during the nine months ended September 30, 2021 were determined by using the Monte-Carlo simulation pricing model with the following assumptions:
|  | April 16, 2021 |  | June 1, 2021 |  | August 12, 2021 |  | September 15, 2021
Performance Period |  | April 16, 2021 - December 31, 2024 |  | June 1, 2021 - December 31, 2024 |  | August 12, 2021 - December 31, 2024 |  | September 15, 2021 - December 31, 2024
Simulation period (years) |  | 3.71 |  | 3.58 |  | 3.39 |  | 3.29
Share price at grant date |  | $35.83 |  | $38.78 |  | $39.48 |  | $45.27
Expected volatility |  | 41.17 | % |  | 41.79 | % |  | 42.85 | % |  | 43.44 | %
Risk-free interest rate |  | 0.52 | % |  | 0.46 | % |  | 0.53 | % |  | 0.49 | %
We recorded stock-based compensation expense, which is included in General, administrative and other expenses, for performance awards of $286,000 and $475,000 for the three months ended September 30, 2020 and 2021, respectively and $589,000 and $1,064,000 for the nine months ended September 30, 2020 and 2021, respectively. Employee Stock Purchase Plan ESPP activity is as follows (in thousands, except shares):
| Three months ended September 30, |  | Nine months ended September 30,
| 2020 |  | 2021 |  | 2020 |  | 2021
| Shares | Price |  | Shares | Price |  | Shares | Price |  | Shares | Price
ESPP | 15,706 |  | $ | 18.96 |  |  | 14,734 |  | $ | 26.32 |  |  | 59,020 |  | $ | 15.60 |  |  | 46,622 |  | $ | 26.32 |
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:
| 2021
Dividend yield | 0.01%
Expected volatility | 48.14%
Risk-free interest rate | 0.09%, 0.09%, 0.10%, 0.10%
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 $95,000 and $117,000 for the three months ended September 30, 2020 and 2021, respectively and $339,000 and $458,000 for the nine months ended September 30, 2020 and 2021, respectively. Non-Employee Director and Board Advisor Compensation Non-Employee Director and Board Advisor common stock activity is as follows (in thousands, except shares):
| Three months ended September 30, |  | Nine months ended September 30,
| 2020 |  | 2021 |  | 2020 |  | 2021
| Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value |  | Shares | Fair Value
Board of Directors | 8,540 |  | $ | 192 |  |  | 3,192 |  | $ | 142 |  |  | 25,220 |  | $ | 477 |  |  | 12,565 |  | $ | 480 |
Advisor to the Board | 224 |  | $ | 6 |  |  | 112 |  | $ | 5 |  |  | 808 |  | $ | 15 |  |  | 389 |  | $ | 15 |
(1) | Common stock granted during the three months ended September 30, 2020 and 2021 had a weighted average price of $26.79 and $44.59, respectively. Common stock granted during the nine months ended September 30, 2020 and 2021 had a weighted average price of $18.91 and $38.20, respectively.
We recorded compensation expense, which is included in General, administrative and other expenses, related to annual retainers, including the value of stock granted to non-employee Directors and an advisor to our Board, of $250,000 and $201,000 for the three months ended September 30, 2020 and 2021, respectively and $653,000 and $656,000 for the nine months ended September 30, 2020 and 2021, respectively. Share Repurchase On May 18, 2021 and July 26, 2021, our Board authorized increases of up to an additional $25.0 million, respectively, in our share repurchase program to permit us to purchase up to a total of $50.0 million under our share repurchase program, in addition to amounts previously authorized and outstanding, in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Share repurchase activity is as follows (dollar value in thousands):
| Three months ended September 30, 2021 |  | Nine months ended September 30, 2021
Number of Shares Repurchased(1) | 1,203,493 |  |  | 1,528,197 |
Average Price Paid Per Share | $ | 44.24 |  |  | $ | 42.89 |
Dollar Value of Shares Repurchased(1) | $ | 53,239 |  |  | $ | 65,540 |
(1) | During the three and nine months ended September 30, 2021, 84,000 shares settled in October 2021, which had a cost of $3.8 million.
Our shares were purchased in the open market at times and in amounts as management determined appropriate based on factors such as market conditions, legal requirements and other business considerations. Shares purchased pursuant to the repurchase program are currently held as treasury shares. At September 30, 2021, we had approximately $10.1 million available for repurchase under our share repurchase program. Cash Dividends Our Board declared the following dividends payable on the dates below (in thousands, except per share amounts):
2021 | Per Share |  | Dollar Value
March 1 st | $ | 0.1000 |  |  | $ | 1,799 |
June 1 st | $ | 0.1000 |  |  | $ | 1,808 |
September 1 st | $ | 0.1000 |  |  | $ | 1,783 |
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 |

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