12.	Stock-Based Compensation Plans

2013 Omnibus Equity Incentive Plan

The Company’s board of directors adopted the 2013 Omnibus Equity Incentive Plan (the “2013 Plan”), which became effective upon the Company’s IPO. In February 2017, the board of directors amended and restated the 2013 Plan, which was approved by the Company’s stockholders in May 2017. Grants are made from time to time by the compensation committee of the Company’s board of directors at its discretion subject to certain restrictions as to the number and value of shares that may be granted to any individual. In addition, non-employee directors receive annual grants under a director compensation policy. As of March 31, 2019, there were 5,353,815 shares available for future grants under the 2013 Plan.

Awards Granted and Settled

Under the 2013 Plan, the Company has issued restricted stock awards (“RSAs”) to non-employee directors and restricted stock units (“RSUs”) to employees and independent contractors. RSAs vest in equal annual installments over a one-year or three-year period from the date of grant. All RSUs vest in equal annual installments over a five-year period from the date of grant or earlier as approved by the compensation committee of the Company’s board of directors. Any unvested awards are canceled upon termination as a service provider. Awards accelerate upon death subject to approval by the compensation committee. As of March 31, 2019, there were no issued or outstanding options, SARs, performance units or performance shares awards under the 2013 Plan.

 

During the three months ended March 31, 2019, 290,396 shares of RSUs were vested of which 284,396 were delivered. Additionally, 56,426 shares of common stock were withheld to pay applicable required employee statutory withholding taxes based on the market value of the shares on the vesting date. The shares withheld for taxes were returned to the share reserve and are available for future issuance in accordance with provisions of the 2013 Plan.

Outstanding Awards

Activity under the 2013 Plan consisted of the following (dollars in thousands, except per share data):

 

		RSA Grants to Non-employee Directors				RSU Grants to Employees				RSU Grants to Independent Contractors				Total				Weighted- Average Grant Date Fair Value Per Share
Nonvested shares at December 31, 2018			27,096				471,782				392,697				891,575			$	27.59
Granted
February 2019			—				204,060				7,731				211,791
Total Granted			—				204,060				7,731				211,791				39.45
Vested (1)			—				(152,816	)			(137,580	)			(290,396	)			21.74
Transferred			—				(4,915	)			4,915				—				28.80
Forfeited/canceled			—				(3,277	)			(11,767	)			(15,044	)			32.17
Nonvested shares at March 31, 2019 (2)			27,096				514,834				255,996				797,926			$	32.78
Unrecognized stock-based compensation expense as of   March 31, 2019 (3)		$	182			$	16,149			$	8,221			$	24,552
Weighted average remaining vesting period (years) as of   March 31, 2019			0.81				3.92				3.27				3.68

 

(1)	Includes vested shares delivered subsequent to March 31, 2019.

(2)	Nonvested RSUs will be settled through the issuance of new shares of common stock.

(3)	The total unrecognized compensation expense is expected to be recognized over a weighted-average period of approximately 3.68 years.

Employee Stock Purchase Plan

In 2013, the Company adopted the 2013 Employee Stock Purchase Plan (“ESPP”). The ESPP qualifies under Section 423 of the Internal Revenue Code and provides for consecutive, non-overlapping 6-month offering periods. The offering periods generally start on the first trading day on or after May 15 and November 15 of each year. Qualifying employees may purchase shares of the Company stock at a 10% discount based on the lower of the market price at the beginning or end of the offering period, subject to IRS limitations. The Company determined that the ESPP was a compensatory plan and is required to expense the fair value of the awards over each 6-monthoffering period.

The ESPP initially had 366,667 shares of common stock reserved and 225,894 shares of common stock remain available for issuance for each of the periods at March 31, 2019 and December 31, 2018. The ESPP provides for annual increases in the number of shares available for issuance under the ESPP, equal to the least of (i) 366,667 shares, (ii) 1% of the outstanding shares on such date, or (iii) an amount determined by the compensation committee of the Company’s board of directors. Pursuant to the provisions of the ESPP, the board of directors has determined to not provide for any annual increases to date. At March 31, 2019, total unrecognized compensation cost related to the ESPP was $14,000 and is expected to be recognized over a weighted average period of 0.12 years.

SARs and DSUs

Prior to the IPO, certain employees were granted SARs. As of March 31, 2013, the outstanding SARs were frozen at the liability amount, and will be paid out to each participant in installments upon retirement or departure under the terms of the revised SARs agreements. To replace beneficial ownership in the SARs, the difference between the book value liability and the fair value of the awards was granted to plan participants in the form of DSUs, which were fully vested upon receipt and will be settled in actual stock at a rate of 20% per year if the participant remains employed by the Company during that period (otherwise all unsettled shares of stock upon termination from service will be settled five years from the termination date, unless otherwise agreed to by the Company). In the event of death or termination of service after reaching the age of 67, 100% of the DSUs will be settled.

 

Future share settlements of fully vested DSUs by year consisted of the following:

 

		March 31, 2019
2021			60,373
2022			281,193
			341,566

Summary of Stock-Based Compensation

Components of stock-based compensation are included in selling, general and administrative expense in the condensed consolidated statements of net and comprehensive income consisted of the following (in thousands):

 

		Three Months Ended March 31,
		2019				2018
Employee stock purchase plan		$	30			$	39
RSAs – non-employee directors			170				111
RSUs – employees			1,345				953
RSUs – independent contractors (1)			796				1,510
		$	2,341			$	2,613

 

(1)

The Company grants RSUs to independent contractors (i.e. investment sales and financing professionals), who are considered non-employees. Prior to the adoption of ASU No. 2018-07 on July 1, 2018, such awards were required to be measured at fair value at the end of each reporting period until settlement. Stock-based compensation expense was therefore impacted by the changes in the Company’s common stock price during each reporting period prior to the date of adoption. New awards after the date of adoption are measured based on the grant date closing price of the Company’s common stock consistent with awards made to the Company’s employees and non-employee directors.