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, 2018
STOCK-BASED COMPENSATION PLANS  
STOCK-BASED COMPENSATION PLANS

NOTE 11—STOCK-BASED COMPENSATION PLANS

During the second quarter of 2018, the Company granted 381,021 service-based restricted stock units to employees, out of treasury stock, at a grant date fair value of $2.94 per share. Restricted stock units granted to employees in 2018 vest ratably over a three-year period beginning on March 31, 2019. The fair value of service-based restricted stock units represents the closing price of the Company’s common stock on the date of grant.

During the second quarter of 2018, the Company awarded 381,008 performance based restricted stock units to employees, out of treasury stock, at a grant date fair value of $1.27 per share. The 2018 units contain a performance condition based on a stock price goal. The stock price goal will be met if the Company’s common stock price per share equals or exceeds $5.00 for any period of 30 consecutive trading days during a three-year period ending on March 31, 2021. These restricted stock units will vest ratably over a period of three years if the stock price goal is met on or before March 31, 2019. However, if the stock price goal is achieved after March 31, 2019 and on or prior to March 31, 2020, the restricted stock units will vest in three installments, with one-third vesting on the date the stock price goal is met, one-third vesting on March 31, 2020 and one-third vesting on March 31, 2021. Further, if the stock price goal is achieved after March 31, 2020 and on or prior to March 31, 2021, the restricted stock units will vest in two installments, with two-thirds vesting on the date the stock price goal is met and one-third vesting on March 31, 2021. If the stock price goal is met after March 31, 2021 and during the three-year performance period, the restricted stock units will vest in full on the date that the stock price goal is met. The fair value of the performance-based restricted stock units is estimated using the Monte Carlo simulation model.

On April 16, 2018, the Company granted 129,410 service-based restricted stock awards out of treasury stock to its four non-employee directors, at a grant date fair value of $2.33 per share with a vesting period of four years. Because the Company had not granted restricted stock awards to its directors since 2015, a portion of the total awards vested on the grant date. In addition, due to the resignation of six non-employee members of the Company’s Board of Directors, on April 11, 2018, a total of 4,545 shares of previously granted restricted stock awards vested.

On May 16, 2018, the Company granted 109,192 service-based restricted stock awards out of treasury stock to its four non-employee directors, at a grant date fair value of $2.20 per share with a vesting period of four years.

Stock-based compensation expense for the three months ended June 30, 2018 and 2017 was $0.3 million and $0.7 million, respectively, and $0.5 million and $1.4 million for the six months ended June 30, 2018 and 2017, respectively, and was included in general and administrative expenses on the Company’s condensed consolidated statements of operations.