Incentive Compensation |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Share-Based Payment Arrangement [Abstract] | |
| Incentive Compensation | Incentive Compensation Prior to the Merger, under various share-based compensation plans, PSB granted non-qualified options to purchase the Company’s common stock at a price not less than fair value on the date of grant, as well as RSUs, to certain directors, officers and key employees.
Prior to the Merger, we amortized the fair value of awards starting at the beginning of the service period as compensation expense. For awards that are earned solely upon the passage of time and continued service, the entire cost of the award was amortized on a straight-line basis over the service period. For awards with performance conditions, the individual cost of each vesting was amortized separately over each individual service period (the “accelerated attribution” method). We accounted for forfeitures of share-based payments as they occurred by reversing previously amortized share-based compensation expense with respect to unvested grants that were forfeited in the period the employee terminates employment.
In connection with the separation agreement with our former President and Chief Executive Officer (“CEO”), who stepped down from his positions with the Company for health reasons effective March 23, 2022, the Company paid a lump sum payment of $6,643 in exchange for 41,186 restricted stock units owned by the former CEO, which represents the market value of the Company common stock underlying such units as of March 18, 2022.
Pursuant to the terms and conditions of the Merger Agreement, at or immediately prior to, as applicable, the Company Merger Effective Time, each 2022 Equity Incentive Plan award approved under the Company’s 2022 Equity Incentive Plan Awards Program was cancelled in exchange for a specific cash payment, less any applicable withholding taxes.
Stock Options
For the period from July 1, 2022 through July 19, 2022 and the three months ended September 30, 2021, we recorded $— and $124, respectively, in compensation expense related to stock options. For the period from January 1, 2022 through July 19, 2022 and the nine months ended September 30, 2021, we recorded $— and $523, respectively, in compensation expense related to stock options.
During the period from January 1, 2022 through July 19, 2022, zero stock options were granted, 27,403 options were exercised, 132,167 options were cancelled, and zero options were forfeited. A total of zero and 159,570 options were outstanding at September 30, 2022 and December 31, 2021, respectively.
Pursuant to the terms and conditions of the Merger Agreement, at or immediately prior to, as applicable, the Company Merger Effective Time, each stock option to purchase shares of Common Stock (each, a “Company Option”) outstanding immediately prior to the Company Merger Effective Time was automatically cancelled in exchange for a cash payment in an amount in cash equal to (1) the number of shares of Common Stock subject to the Company Option immediately prior to the Company Merger Effective Time multiplied by (2) the excess of the Per Company Share Merger Consideration over the per share exercise price applicable to the Company Option, less any applicable withholding taxes.
Restricted Stock Units
For the period from July 1, 2022 through July 19, 2022 and the three months ended September 30, 2021, we recorded $327 and $1,946, respectively, in compensation expense related to RSUs. For the period from January 1, 2022 through July 19, 2022 and the nine months ended September 30, 2021, we recorded $2,522 and $5,093, respectively, in compensation expense related to RSUs.
During the period from January 1, 2022 through July 19, 2022, 38,151 RSUs were granted, 22,209 RSUs vested, 78,557 were cancelled, and 55,976 RSUs were forfeited.
Tax withholding totaling $1,318 were made on behalf of employees in exchange for 7,920 shares of common stock withheld upon vesting for the period from January 1, 2022 through July 19, 2022, resulting in the issuance of 12,528 shares of common stock. Tax withholding totaling $3,680 were made on behalf of employees in exchange for 23,935 shares of common stock withheld upon vesting for the nine months ended September 30, 2021, resulting in the issuance of 33,128 shares of common stock. A total of zero and 118,591 RSUs were outstanding at September 30, 2022 and December 31, 2021, respectively.
Under the Retirement Plan for Non-Employee Directors (the “Director Retirement Plan”), the Company granted 1,000 shares of common stock for each year served as a director up to a maximum of 10,000 shares issued upon retirement. In April 2021, we issued 10,000 shares of common stock to a director upon retirement with an aggregate fair value of $1,635. Compensation expense for these shares was previously recognized. No director retirement shares were issued during the period from January 1, 2022 through July 19, 2022.
For the period from July 1, 2022 through July 19, 2022 and the three months ended September 30, 2021, we recorded $68 and $275, respectively, in compensation expense related to the Director Retirement Plan shares. For the period from January 1, 2022 through July 19, 2022 and the nine months ended September 30, 2021, we recorded $812 and $759, respectively, in compensation expense related to the Director Retirement Plan shares.
Pursuant to the terms and conditions of the Merger Agreement, at or immediately prior to, as applicable, the Company Merger Effective Time, each Company RSU award of restricted stock units covering shares of Common Stock granted under a Company equity plan and each award of deferred stock units governed under the Company’s retirement plan for non-employee directors that were outstanding immediately prior to the Company Merger Effective Time was cancelled in exchange for a cash payment in an amount in cash equal to (1) the number of shares of Common Stock subject to the Company RSU Award immediately prior to the
Company Merger Effective Time multiplied by (2) the Per Company Share Merger Consideration, less any applicable withholding taxes.
In addition, each Company RSU Award and vested (as of July 19, 2022) Company Deferred Stock Unit Award was additionally entitled, pursuant to the terms of each award, to a dividend equivalent payment in respect of the Pro Rata Dividend. Each holder of a Company RSU Award, Company Deferred Stock Unit Award and/or Company Option received an aggregate payment with respect to such award inclusive of the aggregate Closing Cash Dividend that such holder would have received had such Company RSU Award or Company Deferred Stock Unit Award been settled in Company Common Stock or Company Option been exercised, in each case, immediately prior to the close of business on July 19, 2022.
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