| Stock-Based Compensation |
Note 12 - Stock-Based Compensation
Predecessor Stock Plan
Stock-based compensation awards were granted to employees under the Predecessor’s 2010 Long-Term Incentive Plan, as amended and restated as of May 10, 2016 (the “Predecessor Stock Plan”). The Predecessor Stock Plan authorized the compensation committee or the board of directors to issue stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based awards, and other types of awards in cash or stock to key employees, consultants, and directors. The maximum number of shares of Predecessor Common Stock that may be delivered pursuant to the awards was 1,120,000. As of March 26, 2019, all unvested Predecessor stock-based awards were canceled.
Successor Stock Plan
Stock-based compensation awards were granted to employees under the Successor’s 2019 Long-Term Incentive Plan as of March 26, 2019 (the “Successor Stock Plan”). The Successor Stock Plan authorizes the compensation committee or the board of directors to issue stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based awards, and other types of awards in cash or stock to key employees, consultants, and directors. The maximum number of shares of Successor Common Stock that may be delivered pursuant to the awards granted was 1,487,905. As of December 31, 2019, there were 841,408 shares remaining under the Successor 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. Stock-based compensation expense and cash compensation paid to the respective employees is included in our consolidated statements of operations in general and administrative expense.
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1. |
Restricted stock units are service-based awards and entitle a grantee to receive a share of common stock on a specified vesting date. The grant-date fair market value of unvested units is determined based on the closing trading price of the Company’s shares on the grant date. These awards vest when earned at the end of the service or performance period which is generally 1 to 3 years. These awards are expensed ratably over the applicable vesting period and are settled in shares of our common stock upon vesting. These awards are considered equity awards.
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2. |
Time-based phantom stock units are service-based awards and represent the equivalent of one share of common stock as of the grant date. The value of these awards is based on the common stock price. These awards vest when earned at the end of the service period which is generally 1 to 3 years. These awards are expensed ratably over the applicable vesting period and are settled in cash upon vesting. These awards are classified as liability awards.
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3. |
Performance cash units 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 over a three-year performance period. Each unit has a nominal value of $100.0. A maximum of 200.0 percent of the number of units granted may be earned if performance at the maximum level is achieved. These awards vest to the extent earned at the end of a three-year graded service period. These awards are expensed ratably over the applicable vesting period and are settled in cash upon vesting. These awards are classified as liability awards.
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4. |
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 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 250.0 percent of the number of units granted may be earned if performance at the maximum level is achieved. These awards vest to the extent earned at the end of the three-year performance period. These awards are expensed ratably over the applicable vesting period and are settled in cash upon vesting. These awards are classified as liability awards.
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5. |
Stock options are service-based awards and entitle a grantee the right to buy a share of common stock at a fixed price on a specified vesting date. The grant-date fair value of unvested units is determined using the Black-Scholes option pricing model. These awards vest to the extent earned at the end of a three-year graded service period and expire 10 years from the grant date. These awards are expensed ratably over the applicable vesting period and are settled in shares of our common stock upon vesting. These awards are considered equity awards.
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Restricted Stock Units
The following table presents restricted stock units activity:
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Restricted Stock Units |
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Weighted Average
Grant-Date Fair Value
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Unvested at January 1, 2018 (Predecessor) |
302,338 |
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$ |
27.10 |
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Granted |
107,863 |
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$ |
12.51 |
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Vested |
(156,524 |
) |
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$ |
29.87 |
|
Forfeited |
(18,079 |
) |
|
$ |
23.82 |
|
Unvested at January 1, 2019 (Predecessor) |
235,598 |
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|
$ |
18.84 |
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Vested |
(556 |
) |
|
$ |
20.75 |
|
Canceled |
(235,042 |
) |
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$ |
18.80 |
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Unvested at March 31, 2019 (Predecessor) |
— |
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|
$ |
— |
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Granted |
496,569 |
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|
$ |
21.58 |
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Vested |
(49,407 |
) |
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$ |
19.45 |
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Forfeited |
(148,222 |
) |
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$ |
23.00 |
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Unvested at December 31, 2019 (Successor) |
298,940 |
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$ |
20.97 |
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The following table presents total expense recognized and value of the units vested:
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Successor |
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Predecessor |
Dollars in Thousands except units issued |
Nine Months Ended December 31, |
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Three Months Ended March 31, |
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Year Ended
December 31, |
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2019 |
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2019 |
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2018 |
Total expense (gain) |
$ |
2,938 |
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$ |
1,512 |
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$ |
2,833 |
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Total value of the units vested |
$ |
961 |
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$ |
12 |
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$ |
4,675 |
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Total unrecognized compensation cost related to unamortized units was $4.1 million as of December 31, 2019. The remaining unrecognized compensation cost related to non-vested units will be amortized over a weighted-average vesting period of approximately 27 months.
Time-based Phantom Stock Units
The following table presents time-based phantom stock units activity:
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Time-based Phantom Stock Units |
Unvested at January 1, 2018 (Predecessor) |
68,759 |
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Granted |
106,530 |
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Vested |
(28,387 |
) |
Forfeited |
(4,117 |
) |
Unvested at January 1, 2019 (Predecessor) |
142,785 |
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Canceled |
(142,785 |
) |
Unvested at March 31, 2019 (Predecessor) |
— |
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Granted |
248,022 |
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Unvested at December 31, 2019 (Successor) |
248,022 |
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The following table presents total expense recognized:
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Successor |
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Predecessor |
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Nine Months Ended December 31, |
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Three Months Ended March 31, |
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Year Ended
December 31, |
Dollars in Thousands except units issued |
2019 |
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2019 |
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2018 |
Total expense (gain) |
$ |
581 |
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$ |
(29 |
) |
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$ |
(261 |
) |
Performance Cash Units
The following table presents performance cash units activity:
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Performance Cash Units |
Unvested at January 1, 2018 (Predecessor) |
23,021 |
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Granted |
16,149 |
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Vested |
(10,771 |
) |
Forfeited |
(791 |
) |
Unvested at January 1, 2019 (Predecessor) |
27,608 |
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Vested |
(27,608 |
) |
Unvested at March 31, 2019 (Predecessor) |
— |
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Unvested at December 31, 2019 (Successor) |
— |
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The following table presents total expense recognized:
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Successor |
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Predecessor |
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Nine Months Ended December 31, |
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Three Months Ended March 31, |
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Year Ended
December 31, |
Dollars in Thousands except units issued |
2019 |
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2019 |
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2018 |
Total expense (gain) |
$ |
— |
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|
358 |
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$ |
161 |
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Performance-based Phantom Stock Units
The following table presents performance-based phantom stock units activity:
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Performance-based Phantom Stock Units |
Unvested at January 1, 2018 (Predecessor) |
87,395 |
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Granted |
107,645 |
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Vested |
(48,937 |
) |
Forfeited |
(3,778 |
) |
Unvested at January 1, 2019 (Predecessor) |
142,325 |
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Canceled |
(142,325 |
) |
Unvested at March 31, 2019 (Predecessor) |
— |
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Unvested at December 31, 2019 (Successor) |
— |
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The following table presents total expense recognized:
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Successor |
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Predecessor |
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Nine Months Ended December 31, |
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Three Months Ended March 31, |
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Year Ended
December 31, |
Dollars in Thousands except units issued |
2019 |
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2019 |
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2018 |
Total expense (gain) |
$ |
— |
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$ |
3 |
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$ |
(600 |
) |
Stock Options
The value of stock option awards is determined using the Black-Scholes option pricing model with following assumptions:
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Risk-free interest rate (U.S. Treasury yield curve) |
2.2 |
% |
Expected dividend yield |
— |
% |
Expected volatility |
51.5 |
% |
Expected term (in years) |
6 |
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The following table presents stock options activity:
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Stock Options |
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Weighted Average
Grant-Date Fair Value
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Weighted Average
Exercise Price
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Weighted Average
Remaining Contractual Life (in years)
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Aggregate
Intrinsic
Value (1)
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Outstanding at April 1, 2019 (Successor) |
— |
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$ |
— |
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$ |
— |
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— |
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$ |
— |
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Granted |
520,483 |
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$ |
11.06 |
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$ |
23.00 |
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|
8.7 |
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$ |
— |
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Exercised |
— |
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$ |
— |
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$ |
— |
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— |
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$ |
— |
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Forfeited |
(222,333 |
) |
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$ |
11.65 |
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$ |
23.00 |
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|
9.2 |
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$ |
— |
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Outstanding at December 31, 2019 (Successor) |
298,150 |
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$ |
10.63 |
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$ |
23.00 |
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|
8.4 |
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$ |
— |
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Exercisable at December 31, 2019 (Successor) |
74,111 |
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$ |
7.54 |
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$ |
23.00 |
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|
4.2 |
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$ |
— |
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(1) |
Aggregate intrinsic value is calculated as the difference between our closing stock price at fiscal year-end and the exercise price, multiplied by the number of in-the-money options and represents the pre-tax amount that would have been received by the option holders, had they all exercised their options on the fiscal year-end date. |
The following tables presents total expense recognized and value of the units vested:
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Successor |
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Predecessor |
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Nine Months Ended December 31, |
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Three Months Ended March 31, |
Dollars in Thousands except units issued |
2019 |
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2019 |
Total expense (gain) |
$ |
1,753 |
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$ |
— |
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Total value of the units vested |
$ |
559 |
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|
$ |
— |
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Total unrecognized compensation cost related to unamortized units was $1.3 million as of December 31, 2019. The remaining unrecognized compensation cost related to non-vested units will be amortized over a weighted-average vesting period of approximately 27 months.
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