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Stockholders' Equity
 9 Months Ended
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,
2020202120202021
SharesFair ValueSharesFair ValueSharesFair ValueSharesFair Value
Granted(1)
— $— — $— 10,200 $255 9,300 $324 
Returned for payroll taxes714 $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,
2020202120202021
SharesFair ValueSharesFair ValueSharesFair ValueSharesFair Value
Granted(1)
— $— — $— 20,000 $92 701,400 $7,115 
Cancelled8,800 $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,
2020202120202021
SharesCashSharesCashSharesCashSharesCash
Exercised(1)
17,913 N/A32,665 N/A17,913 N/A314,294 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,
2020202120202021
SharesFair ValueSharesFair ValueSharesFair ValueSharesFair Value
Granted9,782 $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, 2021June 1, 2021August 12, 2021September 15, 2021
Performance PeriodApril 16, 2021 - December 31, 2024June 1, 2021 - December 31, 2024August 12, 2021 - December 31, 2024September 15, 2021 - December 31, 2024
Simulation period (years)3.713.583.393.29
Share price at grant date$35.83$38.78$39.48$45.27
Expected volatility41.17 %41.79 %42.85 %43.44 %
Risk-free interest rate0.52 %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,
2020202120202021
SharesPriceSharesPriceSharesPriceSharesPrice
ESPP15,706 $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,
2020202120202021
SharesFair ValueSharesFair ValueSharesFair ValueSharesFair Value
Board of Directors8,540 $192 3,192 $142 25,220 $477 12,565 $480 
Advisor to the Board224 $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, 2021Nine 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):
2021Per ShareDollar Value
March 1st
$0.1000 $1,799 
June 1st
$0.1000 $1,808 
September 1st
$0.1000 $1,783 
2020Per ShareDollar Value
March 1st
$0.0750 $1,339 
June 1st
$0.0750 $1,343 
September 1st
$0.0875 $1,569