Stock-Based Compensation |
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| Stock-Based Compensation |
Stock-Based Compensation
Stock Plan
Stock-based compensation awards were granted to employees under the Company’s 2010 Long-Term Incentive Plan, as Amended and Restated as of May 10, 2016 (the Stock Plan). The Stock Plan was approved by the stockholders at the Annual Meeting of Stockholders on May 10, 2016. The Stock Plan authorizes the compensation committee or the board of directors to issue stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance-based awards, time-based awards, and other types of awards in cash or stock to key employees, consultants, and directors. The maximum number of shares that may be delivered pursuant to the awards granted under the Stock Plan is 16,800,000 shares of common stock. As of December 31, 2017 there were 4,617,521 shares remaining available under the Stock Plan.
Stock-Based Awards
Stock-based awards generally vest over three years. Stock-based compensation expense is recognized net of an estimated forfeiture rate, which is based on historical experience and adjusted, if necessary, in subsequent periods based on actual forfeitures. We recognize stock-based compensation expense in the same financial statement line item as cash compensation paid to the respective employees. Tax deduction benefits for awards in excess of recognized compensation costs are reported as a financing cash flow.
In 2017, we issued three types of stock-based awards: restricted stock units (RSUs), performance-based phantom stock units and time-based phantom stock units:
The following table presents RSUs granted, vested and forfeited during 2017 under the Stock Plan:
We issued 2,711,546 units, 3,289,569 units, and 2,996,151 units, respectively, of RSUs during 2017, 2016 and 2015, respectively, to selected key personnel. The per-share weighted-average grant-date fair value of units granted during 2017, 2016, and 2015 was $1.42, $2.07, and $3.08, respectively. Stock-based compensation expense is included in our consolidated statements of operations in “General and administration expenses.”
Total stock-based compensation expense recognized relating to RSUs for the years ended December 31, 2017, 2016, and 2015 was $4.0 million, $7.5 million, and $8.4 million, respectively, all of which was related to nonvested RSUs. The total fair value of the units vested during the years ended December 31, 2017, 2016, and 2015 was $8.6 million, $10.0 million, and $8.0 million, respectively. The fair value of RSUs is determined based on the closing trading price of the Company’s stock on the grant date.
Nonvested RSUs as of December 31, 2017 totaled 4,534,178 and total unrecognized compensation cost related to unamortized RSUs was $3.3 million as of December 31, 2017. The remaining unrecognized compensation cost related to non-vested RSUs will be amortized over a weighted-average vesting period of approximately 33 months.
The following table presents time-based phantom stock units granted, vested, and forfeited during 2017 under the Stock Plan:
In 2017 we issued 648,755 units and 1,188,854 units of time-based phantom stock units during 2017 and 2016 to selected key personnel. We did not issue any time-based phantom stock units in 2015.
Compensation expense recognized related to time-based phantom stock units for the year ended December 31, 2017 was nominal. Expense recognized for the year ended December 31, 2016 was $1.4 million.
Performance-Based Awards
In 2017, we issued two types of performance-based awards: Performance Cash Units (PCUs) and performance-based phantom stock units.
PCUs are performance-based awards that contain payout conditions which are based on our performance against a group of selected peer companies with regard to relative return on capital employed (ROCE) over a three-year performance period. Each PCU has a nominal value of $100.00. A maximum of 200 percent of the number of PCUs granted may be earned if performance at the maximum level is achieved. PCUs vest to the extent earned at the end of a three-year performance period and are settled in cash.
Performance-based phantom stock units are performance-based awards denominated in a number of shares which contain payout conditions based on our performance against a group of selected peer companies with regard to relative total shareholder return (TSR) over a three-year performance period. They represent a grant of hypothetical stock to the equivalent number of shares of common stock but, with the employee receiving cash upon vesting. We used a simulation-based option pricing approach to determine the fair value of these awards. A maximum of 250 percent of the number of performance-based phantom stock units granted may be earned if performance at the maximum level is achieved. Performance-based phantom stock units vest to the extent earned at the end of the three-year performance period and are settled in cash.
We evaluate the terms of each award to determine if the award should be accounted for as equity or a liability under the stock compensation rules of U.S. GAAP. PCUs and performance-based phantom stock units are classified as liability awards.
For performance-based awards with graded vesting conditions, we recognize compensation expense on a straight-line basis over the service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. For market-based awards that vest at the end of the service period, we recognize compensation expense on a straight-line basis through the end of the service period.
The following table presents PCUs granted, vested, and forfeited during 2017 under the Stock Plan:
In 2017, 2016, and 2015 we issued 14,153 units, 17,091 units, and 17,091 units, respectively, of PCUs to selected key personnel.
Compensation expense recognized related to PCUs for the years ended December 31, 2017, 2016, and 2015 was $1.0 million, $2.3 million, and $2.3 million, respectively.
The following table presents performance-based phantom stock units granted, vested, and forfeited during 2017 under the Stock Plan:
In 2017, 2016, and 2015 we issued 660,370 units, 1,164,880 units, and 541,127 units, respectively, of performance-based phantom stock units to selected key personnel.
Compensation expense recognized related to performance-based phantom stock units for the year ended December 31, 2017 was a gain of $0.9 million, and an expense of $1.3 million, and $0.4 million for the years ended December 31, 2016 and 2015, respectively.
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