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Shareholders’ Equity and Stock Incentive Plans
 12 Months Ended
Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]  
Shareholders’ Equity and Stock Incentive Plans Shareholders’ Equity and Stock Incentive Plans
Share Repurchase Program
On August 3, 2021, the Company’s Board of Directors authorized a share repurchase program of $50 million, which was re-authorized on May 3, 2022 and subsequently increased to $75 million on November 1, 2022. Share repurchases may be made from time to time in open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements, including compliance with the Company’s finance agreements. There is no minimum number of shares that the Company is required to repurchase and the repurchase program may be suspended or
discontinued at any time without prior notice. As of December 31, 2022, the Company had $61.5 million of remaining share repurchase availability under its November 1, 2022 authorization.
The following table includes the Company’s share repurchase activity:
Year Ended December 31,
202220212020
(In thousands, except per share data)
Shares repurchased (1)
1,113 227 50 
Total cost, including brokerage fees$51,202 $10,616 $950 
Average repurchase price per share (2)
$46.01 $46.87 $19.00 
(1)All repurchased shares were retired and constitute authorized but unissued shares.
(2)Figures in the table may not recalculate exactly due to rounding. Average repurchase price per share is calculated based on unrounded numbers.
Stock Incentive Plans
On August 27, 2015, the Board of Directors of the Company approved the Golden Entertainment, Inc. 2015 Incentive Award Plan (the “2015 Plan”), which was approved by the Company’s shareholders at the Company’s 2016 annual meeting. The 2015 Plan authorizes the issuance of stock options, restricted stock, restricted stock units, dividend equivalents, stock payment awards, stock appreciation rights, performance bonus awards and other incentive awards. The 2015 Plan authorizes the grant of awards to employees, non-employee directors and consultants of the Company and its subsidiaries. Options generally have a ten-year term. Except as provided in any employment agreement between the Company and the employee, if an employee is terminated, any unvested options will be forfeited.
The maximum number of shares of the Company’s common stock for which grants may be made under the 2015 Plan is 2.25 million shares, plus an annual increase on January 1st of each year during the ten-year term of the 2015 Plan equal to the lesser of 1.8 million shares, 4% of the total shares of the Company’s common stock outstanding (on an as-converted basis) and such smaller amount as may be determined by the Board of Directors in its sole discretion. The annual increase on January 1, 2022 was 1,153,210 shares. In addition, the maximum aggregate number of shares of common stock that may be subject to awards granted to any one participant during a calendar year is 2.0 million shares. As of December 31, 2022, a total of 3,135,469 shares of the Company’s common stock remained available for grants of awards under the 2015 Plan.
Stock Options
The following table summarizes the Company’s stock option activity:
Stock Options Outstanding
Weighted-Average Remaining Term
(in years)
Weighted-Average Exercise Price
Aggregate Intrinsic Value
(in thousands)
Outstanding at January 1, 20203,126,521 6.1$11.61 
Granted— $— 
Exercised(84,875)$3.88 
Cancelled(2,292)$13.50 
Expired(148,013)$26.61 
Outstanding at December 31, 20202,891,341 5.5$11.07 $25,520 
Granted— $— 
Exercised(749,847)$10.39 
Cancelled— $— 
Expired— $— 
Outstanding at December 31, 20212,141,494 4.5$11.31 $83,992 
Granted— $— 
Exercised(69,500)$9.94 
Cancelled— $— 
Expired— $— 
Outstanding at December 31, 20222,071,994 3.5$11.35 $53,966 
Exercisable at December 31, 20202,854,813 5.5$11.04 $25,286 
Exercisable at December 31, 20212,141,494 4.5$11.31 $83,992 
Exercisable at December 31, 20222,071,994 3.5$11.35 $53,966 
The total intrinsic value of stock options exercised was $2.6 million, $26.1 million, and $1.3 million for the years ended December 31, 2022, 2021, and 2020, respectively. The Company has not granted any stock options since 2017 and the cash received from stock options exercised during the year ended December 31, 2022 was less than $0.1 million.
The Company issues new shares of common stock upon exercise of stock options.
The Company uses the Black-Scholes option pricing model to estimate the fair value and compensation cost associated with employee incentive stock options, which requires the consideration of historical employee exercise behavior data and the use of a number of assumptions including volatility of the Company’s stock price, the weighted-average risk-free interest rate and the weighted-average expected life of the options. The Company’s determination of fair value of share-based option awards on the date of grant using the Black-Scholes option pricing model is affected by the following assumptions regarding complex and subjective variables. Any changes in these assumptions may materially affect the estimated fair value of the share-based award.
•Expected dividend yield — As the Company has not historically paid dividends, with the exception of the Special Dividend, the dividend rate variable used in the Black-Scholes model is zero.
•Risk-free interest rate — The risk-free interest rate assumption is based on the U.S. Treasury yield curve in effect at the time of grant and with maturities consistent with the expected term of options.
•Expected term — The expected term of employee stock options represents the weighted-average period that the stock options are expected to remain outstanding. It is based upon the Company’s experience as to the average historical term of option grants that were exercised, canceled or forfeited. Management believes historical data is reasonably representative of future exercise behavior.
•Expected volatility — The volatility assumption is based on the historical actual volatility of the Company’s stock. Management concluded there were no factors identified which were unusual and which would distort the volatility
figure if used to estimate future volatility. Future volatility may be substantially less or greater than expected volatility.
RSUs and PSUs
Executive officers of the Company receive long-term incentive equity awards in a combination of RSUs and PSUs, issued under the 2015 Plan. The number of PSUs that will be eligible to vest with respect to these PSU awards will be determined based on the Company’s attainment of performance goals set by the Compensation Committee. Following the one- or two-year performance periods, the number of “vesting eligible” PSUs will then be subject to two- or one- additional years of time-based vesting, respectively. Share-based compensation costs related to RSU and PSU awards are calculated based on the market price on the date of the grant. The Company periodically reviews the estimates of performance against the defined criteria to assess the expected payout of each outstanding PSU grant and adjusts the stock compensation expense accordingly.
The following table summarizes the Company’s RSU activity:
RSUs
SharesWeighted-
Average Grant Date Fair Value
Total Fair Value of Shares Vested
(in thousands)
Outstanding at January 1, 2020661,258 $16.44 
Granted624,415 $9.65 
Vested(308,222)$16.06 $3,336 
Cancelled(33,494)$16.58 
Outstanding at December 31, 2020943,957 $12.06 
Granted318,356 $31.46 
Vested(426,770)$14.20 $14,203 
Cancelled(20,123)$26.08 
Outstanding at December 31, 2021815,420 $18.17 
Granted123,970 $51.86 
Vested(363,450)$17.78 $18,963 
Cancelled(28,269)$17.63 
Outstanding at December 31, 2022547,671 $26.09 
The following table summarizes the Company’s PSU activity:
PSUs
Shares (1)
Weighted-
Average Grant Date Fair Value
Total Fair Value of Shares Vested
(in thousands)
Outstanding at January 1, 2020376,328 $20.65 
Granted404,880 $8.86 
Vested(5,254)
(2)
$28.72 $47 
Cancelled(32,235)
(2)
$28.72 
Outstanding at December 31, 2020743,719 $13.82 
Granted129,503 $29.00 
Vested(89,920)
(2) (3)
$25.73 $2,608 
Cancelled(77,725)
(2) (3)
$25.23 
Outstanding at December 31, 2021705,577 
(4)
$13.84 
Granted83,579 $53.51 
Performance certification534,383 
(5)
$— 
Vested(247,380)
(6)
$12.51 $13,030 
Cancelled— $— 
Outstanding at December 31, 20221,076,159 $17.17 
(1)The number of shares for the PSUs listed as granted represents the “target” number of PSUs granted to each recipient eligible to vest if the Company meets its “target” performance goals for the applicable period. The actual number of PSUs eligible to vest for those PSUs will vary depending on whether or not the Company meets or exceeds the applicable threshold, target, or maximum performance goals for the PSUs, with 200% of the “target” number of PSUs eligible to vest at “maximum” performance levels.
(2)During the first quarter of 2020, the Company’s financial results for the performance goals applicable to the PSUs granted in March 2018 were certified, which resulted in the reduction of the PSUs granted in 2018 to the number of PSUs eligible to vest from 108,957 to 76,722 shares (with the 32,235 share adjustment shown in the table above as “Cancelled”), 5,254 of which shares vested in March 2020 and 71,468 of which shares vested in March 2021.
(3)62,791 of the 77,725 PSUs cancelled during the year ended December 31, 2021 related to PSUs granted in November 2017, for which applicable performance goals were not met. 14,934 of the 77,725 PSUs cancelled during the period related to PSUs granted in March 2019 (the “2019 PSU Awards”). The Company’s financial results for the applicable performance goals were certified in March 2021, which resulted in the reduction of the shares subject to the 2019 PSU Awards from 204,580 to 189,646. In addition, 18,452 of the shares under the 2019 PSU Awards vested during the first quarter of 2021.
(4)Includes 171,194 shares of PSUs granted in March 2019 that were certified below target during the three months ended March 31, 2021 and vested in March 2022. Also includes PSUs granted in March 2020 and March 2021 at “target.”
(5)The Company’s financial results for the applicable performance goals were certified during the three months ended March 31, 2022 and 200% of the target PSUs granted in March 2020 and March 2021 were deemed “earned.” Includes 38,093 incremental shares issued in March 2022 in connection with vesting of PSUs granted in March 2020 due to such award “earned” at 200% of the “target.” The remaining PSUs granted in March 2020 and March 2021 will be eligible to vest on March 14, 2023 and 2024, respectively.
(6)Comprises 171,194 shares of PSUs granted in March 2019 and 76,186 shares of PSUs granted in March 2020 that vested in March 2022.
Share-Based Compensation
The following table summarizes share-based compensation costs by award type:
Year Ended December 31,
(In thousands)202220212020
Stock options$— $191 $1,919 
RSUs6,900 6,867 5,264 
PSUs5,980 6,786 2,342 
Total share-based compensation costs$12,880 $13,844 $9,525 
As of December 31, 2022, the Company’s unrecognized share-based compensation expense related to RSUs and PSUs was $8.2 million and $6.2 million, respectively, which is expected to be recognized over a weighted-average period of 1.2 years and 0.6 years for RSUs and PSUs, respectively. The Company did not have any remaining unrecognized share-based compensation expense related to stock options as of December 31, 2022.