Annual report pursuant to Section 13 and 15(d)

Share-based Compensation

v3.20.4
Share-based Compensation
12 Months Ended
Dec. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Share-based Compensation

NOTE 13 – SHARE-BASED COMPENSATION

 

Share-based compensation expense consisted of the following:

 

 

 

Years Ended December 31,

 

 

 

 

2020

 

 

2019

 

 

Restricted stock

 

$

4,719

 

 

$

6,496

 

 

Unrestricted stock

 

 

-

 

 

 

418

 

 

Stock options

 

 

905

 

 

 

841

 

 

DSUs

 

 

984

 

 

 

-

 

 

Pool A awards

 

 

2,328

 

 

 

-

 

 

Pool B awards

 

 

1,120

 

 

 

-

 

 

Total

 

$

10,056

 

(1)

$

7,755

 

(2)

  

         (1) $1,940 was presented as part of cost of services and $8,116 was presented as part of selling, general and

                        administrative expenses in the consolidated statement of operations.

 

           (2) $2,513 was presented as part of cost of services and $5,242 was presented as part of selling, general and

                        administrative expenses in the consolidated statement of operations.

 

Restricted Stock

 

The following table summarizes restricted stock activity in 2020:

 

 

 

Number of

shares

 

 

Weighted-

average

grant-date

fair value

(per share data)

 

Non-vested restricted stock as of December 31, 2019

 

 

2,723,637

 

 

$

8.87

 

Granted

 

 

-

 

 

 

-

 

Vested

 

 

(690,237

)

 

 

8.87

 

Forfeited

 

 

(584,113

)

 

 

8.91

 

Non-vested restricted stock as of December 31, 2020

 

 

1,449,287

 

 

$

8.85

 

 

In 2019, the Company granted shares of restricted Class A common stock (“restricted stock”) totaling 2,218,183 to certain employees of the Company pursuant to the LTIP. Restricted stock is subject to restrictions on transfer and is generally subject to a risk of forfeiture if the award recipient is no longer an employee of the Company prior to the lapse of the restriction. The restricted stock granted in 2019 had a total fair value of $19,764 and vests over four years in equal installments each year on the anniversary of the grant date.

 

The fair value of the restricted stock granted in 2019 was determined using the closing price of the Company’s Class A common stock on the grant date.

 

As of December 31, 2020, the total unrecognized compensation cost related to restricted stock was $7,345 which is expected to be recognized over a weighted-average period of 2.15 years.

 

Unrestricted stock

 

In 2019, the Company granted 46,875 shares of fully vested and unrestricted Class A common stock (“unrestricted stock”) under the LTIP to certain board members in exchange for their services as a director of the Company, in accordance with the existing compensation plan of the Board of Directors. The fair value of the unrestricted stock was $8.91 per share, which was determined using the closing price of the Company’s Class A common stock on the grant date.

 

 

Stock options

 

The following table summarizes stock option activity in 2020:

 

 

 

Number of

shares

 

 

Weighted

average

exercise price

(per share

data)

 

 

Weighted

Average

Remaining

Contractual

Life (years)

 

Outstanding as of December 31, 2019

 

 

1,068,162

 

 

$

8.91

 

 

 

6.21

 

Granted

 

 

-

 

 

$

-

 

 

 

-

 

Exercised

 

 

-

 

 

 

-

 

 

 

-

 

Forfeited/Expired

 

 

(190,896

)

 

 

8.91

 

 

 

-

 

Outstanding as of December 31, 2020

 

 

877,266

 

 

$

8.91

 

 

 

5.21

 

Exercisable as of December 31, 2020

 

 

219,317

 

 

$

8.91

 

 

 

5.21

 

 

In 2019, the Company granted a total of 1,068,162 stock options under the LTIP to certain employees of the Company. The fair value of stock options on the date of grant was $3.95 per option, which was calculated using the Black-Scholes valuation model. These stock options were granted with seven-year terms and vest over four years in equal installments each year on the anniversary of the grant date. The expected term of the options granted was based on the safe harbor rule of the SEC Staff Accounting Bulletin No. 107 “Share-Based Payment” as the Company lacks historical exercise data to estimate the expected term of these options. The expected stock price volatility is calculated based on the Company’s peer group because the Company does not have sufficient historical data and will continue to use peer group volatility information until historical volatility of the Company is available to measure expected volatility for future grants. The exercise price for stock options granted equals the closing market price of the underlying stock on the date of grant. These options are time-based and are not based upon attainment of performance goals. The fair value of stock options on the grant date was $4,219 and recognized as compensation expense over the vesting period of four years.

 

As of December 31, 2020, the total unrecognized compensation cost related to stock options was $1,906 which is expected to be recognized over a weighted average period of 2.21 years.

Deferred Stock Units

 

In 2020, the Company granted 8,911,858 Deferred Stock Units (“DSUs”) to certain key employees of the Company pursuant to the A&R LTIP. Each DSU represents the right to receive one share of the Company’s Class A common stock. DSUs granted in 2020 had total fair value of $2,954, which was determined using the closing price of Class A common stock on each grant date. DSUs vest over three years in equal installments each year on the anniversary of the vesting effective date, subject to the grantee’s continuous service through each vesting period.

 

As of December 31, 2020, the total unrecognized compensation cost related to DSUs was $1,969 which is expected to be recognized over a weighted average period of 2 years.

 

Pool A Performance Award

 

In 2020, the Company made grants of Pool A Performance Awards (“Pool A Award”) to certain key employees of the Company. Each Pool A Award represents the right to receive, at the Company’s election, a fixed monetary amount either in cash or a variable number of shares of the Company’s Class A common stock based on its closing share price on the date of settlement. The Pool A Award became fully vested as of January 1, 2021 but settlement will not occur until the fifth anniversary of the grant date.

 

The Company accounts for the Pool A Award under liability accounting as a result of the fixed monetary amount that could be settled either in cash or a variable number of shares of the Company’s Class A common stock. The Company considers the delayed settlement as a post-vesting restriction which would impact the determination of grant-date fair value of the award.

The Pool A Award granted in 2020 had a total fair value of $2,328, which was estimated using a risk-adjusted discount rate, which reflects the weighted average cost of capital of similarly traded public companies.

 

As of December 31, 2020, we recorded Pool A Award liability of $2,328, presented as part of other long-term liabilities in the consolidated balance sheets. Subsequent changes in the fair value of the liability from December 31, 2020 through the date of settlement will be recorded as additional compensation cost.

 

Pool B Performance Award

 

In 2020, the Company made grants of Pool B Performance Awards (“Pool B Award”) to certain key employees of the Company. Each Pool B Award represents the right to receive, at the Company’s election, either a cash payment calculated in accordance with the award agreement, or a fixed number of shares of the Company’s Class A common stock. The Pool B Award granted in 2020 had total fair value of $3,362, which was determined using the closing price of Class A common stock on each grant date. The Pool B Award vests over three years in equal installments each year on the anniversary of the vesting effective date, subject to the grantee’s continuous services through each vesting period.

 

As of December 31, 2020, the total unrecognized compensation cost related to Pool B Award was $2,241, which is expected to be recognized over a weighted average period of 2 years.