Quarterly report pursuant to Section 13 or 15(d)

STOCK-BASED COMPENSATION PLANS

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STOCK-BASED COMPENSATION PLANS
6 Months Ended
Jun. 30, 2019
STOCK-BASED COMPENSATION PLANS  
STOCK-BASED COMPENSATION PLANS

NOTE 12—STOCK-BASED COMPENSATION PLANS

During the first half of 2019, the Company granted 21,500 service-based restricted stock units and 21,500 market-based restricted stock units, both out of treasury stock, at a grant date fair value of $2.60 per share and $0.75 per share, respectively. The service-based restricted stock units will vest ratably over a period of three years; the market-based restricted stock units will vest, in whole or in part, if the stock price goal is met on or before June 30, 2021. The fair value of the market-based restricted stock units is estimated using the Monte Carlo simulation model.

In addition, during the first half of 2019, the Company granted 358,613 service-based restricted stock units under the 2015 Equity Incentive Plan at a grant date fair value of $2.35 per share. These service-based restricted stock units vest ratably over a three-year period beginning on March 31, 2020. The fair value of service-based restricted stock units represents the closing price of the Company’s commons stock on the date of grant.

The Company also awarded 723,577 performance-based restricted stock units under the 2015 Equity Incentive Plan during the first half of 2019. These performance-based restricted stock units vest ratably over a three-year period beginning on March 31, 2020. Performance objectives are established by the Compensation Committee of the Board of Directors (the “Compensation Committee”) on an annual basis. For the 2019 performance period, the performance objective is based on the Company’s backlog performance target as of December 31, 2019. Performance objectives for the two succeeding years will be established by the Compensation Committee in the respective performance period. Award payouts range from a threshold of 50% to a maximum of 200% for each respective annual performance period. The fair value of the performance-based restricted stock units with an established 2019 performance objective represents the closing price of the Company’s common stock on the date of grant. The fair value of the performance-based restricted stock units that will vest on March 31, 2021 and 2022 will be measured in the year that the respective performance objective is established and approved by the Compensation Committee.

During the first half of 2019, the Company granted service-based restricted stock awards out of treasury stock totaling 149,639 shares to its five non-employee directors, which vest in four equal annual installments on January 22 of each of 2020, 2021, 2022 and 2023.

Stock-based compensation expense for the three months ended June 30, 2019 and 2018 was $0.6 million and $0.3 million, respectively, and $0.9 and $0.5 million for the six months ended June 30, 2019 and 2018, respectively, and was included in general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations.