STOCK BASED COMPENSATION | STOCK BASED COMPENSATION Under the 2012 Omnibus Equity Award Plan, the Company has granted stock options, restricted stock and Performance-Based Restricted Stock Units (“PSUs”) to certain employees and directors. The Company recorded total stock based compensation expense of $1.8 million during each of the three month periods ended March 31, 2021 and 2020, respectively. At March 31, 2021, there was $12.8 million of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a weighted-average period of approximately 1.5 years. Restricted Stock— Restricted stock is granted to employees of the Company and its subsidiaries, and to non-employee members of the Company’s Board. These shares are part of the compensation plan for services provided by the employees or Board members. The closing price of the Company’s stock on the date of grant is used to determine the fair value of the grants. The expense related to the restricted stock grants is recorded over the vesting period as described below. There was no cash flow impact resulting from the grants. The restricted stock vests in various increments either quarterly or on the anniversaries of each grant, subject to the recipient’s continued employment or service through each applicable vesting date. Vesting occurs over one year for Board members and over two to four years for employees. A summary of the status of restricted stock awards as of March 31, 2021 and 2020 and the changes during the periods then ended is presented below: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Shares Weighted- Average Fair Value at Grant Date Shares Weighted- Average Fair Value at Grant Date Non-vested at beginning of the period 3,877,853 $ 2.49 3,994,787 $ 2.46 Granted 1,468,223 $ 2.62 1,467,500 $ 2.82 Forfeited (204,175) $ 2.76 (162,796) $ 3.04 Vested (1,034,684) $ 2.58 (1,009,884) $ 2.65 Non-vested at end of period 4,107,217 $ 2.50 4,289,607 $ 2.52 —PSUs are granted to employees of the Company and its subsidiaries. These shares are granted under two compensation agreements that are for services provided by the employees. The first agreement expired and was terminated during the first quarter of 2020 and had no unvested shares as of March 31, 2020. Under the second agreement, the fair value of the PSUs are measured at the grant date fair value of the award, which was determined based on an analysis of the probable performance outcomes. The performance period is over one year and is based on the achievement of bookings targets during the year of grant, as defined in the agreement. The earned shares will then vest over a three year period, one-third on each of the first, second, and third anniversaries of the grant date, or if later, the date the Compensation Committee certifies the performance results with respect to the performance period. For the performance period ending December 31, 2020, as a result of the COVID-19 pandemic and its impact on the overall economy, the bookings targets were modified during the third quarter of 2020. Accordingly, the Company remeasured the awards. There was no cash flow impact resulting from the grants. A summary of the status of PSUs as of March 31, 2021 and 2020 and the changes during the periods then ended is presented below: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Shares Weighted- Average Fair Value at Shares Weighted- Average Fair Value at Non-vested at beginning of the period 1,352,438 $ 2.50 1,664,650 $ 2.53 Granted 990,000 $ 2.62 911,460 $ 2.82 Forfeited (105,656) $ 2.14 (641,075) $ 3.30 Vested (339,111) $ 2.58 (308,024) $ 1.90 Non-vested at end of period 1,897,671 $ 2.54 1,627,011 $ 2.51 Stock Options— The fair value of each option grant is estimated using the Black-Scholes option-pricing model. This valuation model requires the Company to make assumptions and judgments about the variables used in the calculation, including the fair value of the Company’s common stock, the expected life (the period of time that the options granted are expected to be outstanding), the volatility of the Company’s common stock, a risk-free interest rate and expected dividends. The expected life of options granted is derived from historical exercise behavior. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury rates in effect at the time of grant. The stock options vest 25% after one year, beginning on the first anniversary date of the grant, and 6.25% each quarter following the first anniversary. There was no cash flow impact resulting from the grants. No stock options were granted during the three months ended March 31, 2021 and 2020. A summary of the status of options previously granted as of March 31, 2021 and 2020, and the changes during the periods then ended, is presented below: Three Months Ended March 31, 2021 Options Weighted-Average Exercise Price Aggregate Intrinsic Value Options outstanding at beginning of the period 110,000 $ 7.40 $ — Forfeited (85,000) $ 7.38 $ — Options outstanding at end of period 25,000 $ 7.50 $ — Exercisable at end of period 25,000 $ 7.50 $ — Three Months Ended March 31, 2020 Options Weighted-Average Exercise Price Aggregate Intrinsic Value Options outstanding at beginning of the period 190,000 $ 8.28 $ — Forfeited (80,000) $ 9.48 $ — Options outstanding at end of period 110,000 $ 7.40 $ — Exercisable at end of period 110,000 $ 7.40 $ — The weighted-average remaining contractual term of options exercisable at March 31, 2021 is 0.2 years. The following table summarizes information about options outstanding as of March 31, 2021: Exercise Price Options Outstanding and Exercisable Weighted- (in years) $ 7.00 - $ 7.99 15,000 0.0 $ 8.00 - $ 8.99 10,000 0.5 25,000 |