Quarterly report pursuant to Section 13 or 15(d)

Stockholder's Equity

v3.20.2
Stockholder's Equity
9 Months Ended
Sep. 30, 2020
Equity [Abstract]  
Stockholder's Equity Stockholder’s Equity
Equity Based Awards
The 2018 Incentive Plan is administered by the Compensation Committee of the Company’s Board of Directors. The total number of shares of the Company's common stock originally reserved were 2,210,544 shares and a total of 1,874,354 shares are currently available for issuance. A variety of discretionary awards for employees, officers, directors, and consultants are authorized under the 2018 Incentive Plan, including incentive or non-qualified stock options and restricted stock, restricted stock units and performance-based awards. All awards must be evidenced by a written award certificate which will include the provisions specified by the Compensation Committee of the Board of Directors. The Compensation Committee determines the exercise price for stock options, which cannot be less than the fair market value of the Company’s common stock as of the date of grant.
Share Based Compensation
Nonvested Stock
During the nine months ended September 30, 2020, the Company granted 9,900 nonvested shares of common stock to independent directors under the Second Amended and Restated 2005 Non-Employee Directors Compensation Plan. The shares vest 100% on the one year anniversary date. During the nine months ended September 30, 2020, one retired director was granted 775 nonvested shares of common stock under the Second Amended and Restated 2005 Non-Employee Directors Compensation Plan, which shares vest 100% at the grant date.
During the nine months ended September 30, 2020, employees and a consultant were granted 113,525 and 10,890 shares, respectively, of nonvested shares of common stock pursuant to the 2018 Incentive Plan. The shares vest over a period of five years, conditioned on continued employment and in accordance with the consulting agreement. The fair value of nonvested shares of common stock is determined based on the closing trading price of the Company’s common stock on the grant date.
The following table represents the share grants activity for the nine months ended September 30, 2020: 
Restricted stock Options
Number of
shares
Weighted
average grant
date fair value
Number of shares Weighted
average grant
date fair value
Share grants outstanding as of December 31, 2019 534,331  $ 71.01  98,756  $ 40.71 
Granted 135,090  123.10  —  — 
Vested or exercised (199,330) 62.31  (16,286) 32.93 
Share grants outstanding as of September 30, 2020 470,091  $ 89.32  82,470  $ 42.25 
As of September 30, 2020, there was $33.7 million of total unrecognized compensation cost related to nonvested shares of common stock granted. That cost is expected to be recognized over the weighted average period of 3.04 years. The Company records compensation expense related to nonvested stock awards at the grant date for shares of common stock that are awarded fully vested, and over the vesting term on a straight-line basis for shares of common stock that vest over time. The Company estimates forfeitures at the time of grant and revises the estimate in subsequent periods if actual forfeitures differ to ensure that
total compensation expense recognized is at least equal to the value of vested awards. The Company recorded $11.1 million and $6.4 million of compensation expense related to nonvested stock grants for the nine months ended September 30, 2020 and 2019, respectively.
Employee Stock Purchase Plan
In 2006, the Company adopted the Employee Stock Purchase Plan whereby eligible employees may purchase the Company’s common stock at 95% of the market price on the last day of the calendar quarter. There were 250,000 shares of common stock initially reserved for the plan. In 2013, the Company adopted the Amended and Restated Employee Stock Purchase Plan, which reserved an additional 250,000 shares of common stock to the plan.
The table below details the shares of common stock issued during 2020: 
Number of
shares
Per share
price
Shares available as of December 31, 2019 132,449 
Shares issued during the three months ended March 31, 2020 4,663  $ 130.87 
Shares issued during the three months ended June 30, 2020 3,730  $ 133.19 
Shares issued during the three months ended September 30, 2020 3,454  $165.60
Shares available as of September 30, 2020 120,602 
Treasury Stock
In conjunction with the vesting of the nonvested shares of common stock or the exercise of stock options, recipients incur personal income tax obligations. The Company allows the recipients to turn in shares of common stock to satisfy minimum tax obligations. During the nine months ended September 30, 2020, the Company redeemed 70,676 shares of common stock valued at $9.0 million, related to share vesting tax obligations. Such shares are held as treasury stock and are available for reissuance by the Company.
In addition, the Company redeemed 7,328 shares of common stock valued at $0.8 million, related to the exercise of options. During the nine months ended September 30, 2020, the Company reclassified $0.9 million between treasury and additional paid in capital for the exercise of options.