Annual report pursuant to Section 13 and 15(d)

Share Based Compensation

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Share Based Compensation
12 Months Ended
Dec. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share Based Compensation
15. SHARE BASED COMPENSATION
Share Incentive Plans. SEACOR’s stockholders approved the 2014 Share Incentive Plan to provide for the grant of options to purchase shares of Common Stock, stock appreciation rights, restricted stock, stock awards, performance awards and restricted stock units to non-employee directors, key officers and employees of the Company. The 2014 Share Incentive Plan superseded the 2007 Share Incentive Plan (collectively including all predecessor plans, the “Share Incentive Plans”). The Compensation Committee of the Board of Directors administers the Share Incentive Plans. A total of 6,650,000 shares of Common Stock have been authorized for grant under the Share Incentive Plans. All shares issued pursuant to such grants are newly issued shares of Common Stock. The exercise price per share of options granted cannot be less than 100% of the fair market value of Common Stock at the date of grant under the Share Incentive Plans. Grants to date have been limited to stock awards, restricted stock, restricted stock units and options to purchase shares of Common Stock.
Restricted stock typically vests from one to five years after date of grant and options to purchase shares of Common Stock typically vest and become exercisable from one to five years after date of grant. Options to purchase shares of Common Stock granted under the Share Incentive Plans expire no later than the tenth anniversary of the date of grant. In the event of a participant’s death, retirement, termination by the Company without cause or a change in control of the Company, as defined in the Share Incentive Plans, restricted stock vests immediately and options to purchase shares of Common Stock vest and become immediately exercisable.
Employee Stock Purchase Plans. SEACOR’s stockholders approved an amendment to the 2009 Employee Stock Purchase Plan (collectively including all predecessor plans, the “Employee Stock Purchase Plans”) increasing the shares of Common Stock available for issuance under the plan by 300,000 and extending the term to ten years from the date of the Company’s 2018 annual meeting of stockholders. The Employee Stock Purchase Plans permit the Company to offer Common Stock for purchase by eligible employees at a price equal to 85% of the lesser of (i) the fair market value of Common Stock on the first day of the offering period or (ii) the fair market value of Common Stock on the last day of the offering period. Common Stock is made available for purchase under the Employee Stock Purchase Plans for six-month offering periods. The Employee Stock Purchase Plans are intended to comply with Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”), but is not intended to be subject to Section 401(a) of the Code or the Employee Retirement Income Security Act of 1974. The Board of Directors of SEACOR may amend or terminate the Employee Stock Purchase Plans at any time; however, no increase in the number of shares of Common Stock reserved for issuance under the Employee Stock Purchase Plans may be made without stockholder approval. A total of 900,000 shares of Common Stock have been approved for purchase under the Employee Stock Purchase Plans with all shares issued from those held in treasury.
Share Award Transactions. The following transactions have occurred in connection with the Company’s share based compensation plans during the years ended December 31,:
2019 2018 2017
Restricted stock awards granted 149,950    121,850    153,100   
Restricted stock awards forfeited (4,230)   —    (2,444)  
Director stock awards granted 2,125    2,875    1,750   
Stock Option Activities:
Outstanding as of the beginning of year 1,467,391    1,546,014    1,639,865   
Granted(1)
165,650    142,550    1,013,893   
Exercised (165,893)   (220,694)   (562,587)  
Forfeited (5,200)   —    (3,374)  
Expired (7,874)   (479)   (541,783)  
Outstanding as of the end of year 1,454,074    1,467,391    1,546,014   
Employee Stock Purchase Plans shares issued 44,383    45,251    36,552   
Shares available for issuance under Share Incentive and Employee Stock Purchase Plans as of the end of year(2)
539,414    884,218    896,265   
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(1)On June 2, 2017, the Company granted 846,353 stock options to existing option holders under make-whole provisions upon the Spin-off.
(2)Shares available for future grants and ESPP purchases were adjusted on June 2, 2017 to reflect the Spin-off in accordance with make-whole provisions of the plans.
During the years ended December 31, 2019, 2018 and 2017, the Company recognized $5.2 million, $4.0 million and $32.5 million, respectively, of compensation expense related to stock awards, stock options, employee stock purchase plans purchases and restricted stock (collectively referred to as “share awards”). During 2017, compensation expense related to stock awards included $16.6 million associated with the Spin-off and the accelerated vesting of incentive share awards in advance of changes in the U.S. federal income tax code. As of December 31, 2019, the Company had approximately $12.8 million in total unrecognized compensation costs of which $4.5 million and $3.5 million are expected to be recognized in 2020 and 2021, respectively, with the remaining balance recognized through 2024.
The weighted average values of grants under the Company’s Share Incentive Plans were $27.67, $29.72 and $37.20 for the years ended December 31, 2019, 2018 and 2017, respectively. The fair value of each option granted during the years ended December 31, 2019, 2018 and 2017, is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: (a) no dividend yield, (b) weighted average expected volatility of 28.2%, 26.6% and 25.5%, respectively, (c) weighted average discount rates of 1.88%, 2.78% and 1.92%, respectively, and (d) expected lives of 5.75 years, 5.58 years and 5.59 years, respectively.
During the year ended December 31, 2019, the number of shares and the weighted average grant price of restricted stock transactions were as follows:
Restricted Stock
Number of
Shares
Weighted
Average
Grant Price
Nonvested as of December 31, 2018 121,850    $ 46.66   
Granted 149,950    $ 43.20   
Vested (26,390)   $ 46.58   
Forfeited (4,230)   $ 44.66   
Nonvested as of December 31, 2019 241,180    $ 44.55   
During the years ended December 31, 2019 and 2017, the total grant date fair value of restricted stock that vested was $1.2 million and $26.1 million, respectively. During the year ended December 31, 2018, no restricted stock vested.
During the year ended December 31, 2019, the number of shares and the weighted average exercise price on stock option transactions were as follows:
Total Options
Number of
Shares
Weighted
Average
Exercise Price
Outstanding, as of December 31, 2018 1,467,391    $ 41.72   
Granted 165,650    $ 43.77   
Exercised (165,893)   $ 31.61   
Forfeited (5,200)   $ 43.47   
Expired (7,874)   $ 48.84   
Outstanding, as of December 31, 2019 1,454,074    $ 43.19   
Outstanding and Exercisable, as of December 31, 2019 1,013,705    $ 43.60   
During the years ended December 31, 2019, 2018 and 2017, the aggregate intrinsic value of exercised stock options was $2.5 million, $3.9 million and $5.6 million, respectively. As of December 31, 2019, the weighted average remaining contractual term for total outstanding stock options and vested/exercisable stock options was 5.10 and 3.90 years, respectively. As of December 31, 2019, the aggregate intrinsic value of all options outstanding and all vested/exercisable options outstanding was $3.8 million and $2.7 million, respectively.