Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation

v3.20.1
Share-Based Compensation
3 Months Ended
Mar. 31, 2020
Share-based Payment Arrangement [Abstract]  
Share-based Compensation Share-based Compensation
RSU Equity Awards
The following table summarizes activity for restricted stock units may be settled in common stock (“RSU Equity Awards”) for the three months ended March 31, 2020 and 2019:
Three Months Ended March 31,
2020 2019
RSU Equity Awards
(in thousands)
Weighted Average Grant Date
Fair Value
RSU Equity Awards
(in thousands)
Weighted Average
Grant Date
Fair Value
Unvested, beginning of the period 2,695    $10.57    2,103    $13.24   
Granted (1)
2,318    $3.32    1,710    $8.67   
Vested (2)
(162)   $9.84    (333)   $11.85   
Forfeited —    $—    (74)   $10.30   
Unvested, end of the period 4,851    $7.13    3,406    $11.14   

(1)Includes 0.9 million and 0.4 million target performance-based RSU Equity Awards that will vest at a range of 0% to 300% and 0% to 200%, respectively.
(2)The fair value of shares vested was $0.7 million and $2.6 million during the three months ended March 31, 2020 and 2019, respectively.

Grant activity primarily consisted of RSU Equity Awards to executives as part of the annual grant of long-term equity incentive awards in January 2020. Grant activity for the same period in 2019 consists of RSU Equity Awards granted to employees as part of the annual grant of long-term equity incentive awards.
The number of outstanding performance-based RSU Equity Awards that can vest is based on a calculation that compares the Company’s total shareholder return (“TSR”) to the same calculated return of a group of peer companies selected by the Company and can range between 0% and 300% of the target units for the awards granted in 2020 and between 0% and 200% of the target units for the awards granted in 2018 and 2019. The increase in the maximum amount of performance-based RSU Equity Awards that can vest for the awards granted in 2020 is due to an absolute TSR modifier, which was added as a second factor in the calculation, in addition to the relative TSR multiplier. While the absolute TSR modifier could increase the number of awards that vest, the number of awards that vest could also be reduced if the absolute TSR is less than 5% over the performance period.
The Company recognizes expense for performance-based RSU Equity Awards based on the fair value of the awards at the grant date. Awards with a performance-based provision do not allow for the reversal of previously recognized expense, even if the market metric is not achieved and no shares ultimately vest. For the three months ended March 31, 2020 and 2019, the grant date fair value of the performance-based RSU Equity Awards, calculated using a Monte Carlo simulation, was $2.9 million and $4.3 million, respectively. The following table summarizes the assumptions used and the resulting grant date fair value per performance-based RSU Equity Award granted during the three months ended March 31, 2020 and 2019:
Three Months Ended March 31,
Performance-based Awards 2020 2019
Number of simulations 100,000 100,000
Expected term (in years) 2.9 2.9
Expected volatility 54.8  % 47.9  %
Risk-free interest rate 1.3  % 2.4  %
Dividend yield —  % —  %
Grant date fair value per performance-based RSU Equity Award $3.39 $10.78
As of March 31, 2020, unrecognized compensation costs related to unvested RSU Equity Awards were $19.0 million and will be recognized over a weighted average period of 1.5 years.
Cash-Settled RSU Awards
The table below summarizes the activity for restricted stock units that may be settled in cash (“Cash-Settled RSU Awards”) for the three months ended March 31, 2020 and 2019:
Three Months Ended March 31,
2020 2019
Cash-Settled RSU Awards
(in thousands)
Weighted Average Grant Date
Fair Value
Cash-Settled RSU Awards
(in thousands)
Weighted Average
Grant Date
Fair Value
Unvested, beginning of the period 855    $10.41    678    $12.36   
Granted 863    $3.39    424    $10.78   
Vested (10)   $10.24    (164)   $12.02   
Did not vest at end of performance period (1)   $10.24    —    $—   
Forfeited —    $—    (82)   $11.58   
Unvested, end of the period 1,707    $6.86    856    $7.52   
Grant activity primarily consisted of Cash-Settled RSU Awards to executives as part of the annual grant of long-term equity incentive awards that occurred in the first quarter of each of the years presented in the table above. These awards cliff vest after an approximate three-year performance period.
The Company’s outstanding Cash-Settled RSU Awards include the same performance-based vesting conditions as the performance-based RSU Equity Awards, which are described above. Additionally, the assumptions used and the resulting grant date fair value per Cash-Settled RSU Award granted for each of the respective periods presented are the same as the performance-based RSU Equity Awards presented above.
The following table summarizes the Company’s liability for Cash-Settled RSU Awards and the classification in the consolidated balance sheets for the periods indicated:
March 31, 2020 December 31, 2019
(In thousands)
Other current liabilities $102    $966   
Other long-term liabilities 207    2,089   
Total Cash-Settled RSU Awards $309    $3,055   
As of March 31, 2020, unrecognized compensation costs related to unvested Cash-Settled RSU Awards were $0.6 million and will be recognized over a weighted average period of 1.75 years.
Share-Based Compensation Expense, Net
Share-based compensation expense associated with the RSU Equity Awards, Cash-Settled RSU Awards, and cash-settled stock appreciation rights (“Cash SARs”), net of amounts capitalized, is included in “General and administrative” in the consolidated statements of operations. The following table presents share-based compensation expense (benefit), net for each respective period:
Three Months Ended March 31,
2020 2019
(In thousands)
RSU Equity Awards $3,948    $5,476   
Cash-Settled RSU Awards (1,996)   1,151   
Cash SARs (4,756)   —   
(2,804)   6,627   
Less: amounts capitalized to oil and gas properties (168)   (1,173)  
Total share-based compensation expense (benefit), net ($2,972)   $5,454   
See “Note 10 - Stock-Based Compensation” of the Notes to Consolidated Financial Statements in the 2019 Annual Report for details of the Company’s equity-based incentive plans.