Annual report pursuant to Section 13 and 15(d)

Share-Based Compensation

v3.22.0.1
Share-Based Compensation
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Share-Based Compensation Share-Based Compensation
2020 Omnibus Incentive Plan
Shares-based awards are granted under the 2020 Omnibus Incentive Plan (the “2020 Plan”), which replaced the 2018 Omnibus Incentive Plan (the “2018 Plan”). From the effective date of the 2020 Plan, no further awards may be granted under the 2018 Plan, however, awards previously granted under the 2018 Plan will remain outstanding in accordance with their terms. At December 31, 2021, there were 1,619,272 shares available for future share-based awards under the 2020 Plan. 
RSU Equity Awards
The following table summarizes RSU Equity Award activity for the year ended December 31, 2021:
RSU Equity Awards (in thousands) Weighted Average Grant-Date Fair Value per Share
Unvested at the beginning of the year 677  $34.57 
Granted 643  $38.59 
Vested (224) $43.97 
Forfeited (128) $42.40 
Unvested at the end of the year 968  $34.04 
Grant activity for the year ended December 31, 2021, 2020 and 2019 primarily consisted of RSU Equity Awards granted to executives and employees as part of the annual grant of long-term equity incentive awards with a weighted average grant date fair value of $38.59, $21.07 and $85.96, respectively.
For outstanding performance-based RSU Equity Awards, the number of 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 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. No performance-based RSU Equity Awards were granted during 2021.
The following table summarizes the shares that vested and did not vest as a result of the Company’s performance as compared to its peers.
Years Ended December 31,
Performance-based Equity Awards 2021 2020 2019
Vesting Multiplier 50  %
50% - 100%
 100  %
Target 28,356 21,920 8,878
Vested at end of performance period 14,177 11,372 8,878
Did not vest at end of performance period 14,179 10,548 —
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 years ended December 31, 2020 and 2019, the grant date fair value of the performance-based RSU Equity Awards, calculated using a Monte Carlo simulation, was $3.4 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 years ended December 31, 2020 and 2019:
Performance-based Awards June 29, 2020 January 31, 2020 January 31, 2019
Expected term (in years) 2.5 2.9 2.9
Expected volatility 113.2  % 54.8  % 47.9  %
Risk-free interest rate 0.2  % 1.3  % 2.4  %
Dividend yield —  % —  % —  %
The aggregate fair value of RSU Equity Awards that vested during the years ended December 31, 2021, 2020 and 2019 was $8.7 million, $1.6 million and $7.3 million, respectively. As of December 31, 2021, unrecognized compensation costs related to unvested RSU Equity Awards were $21.2 million and will be recognized over a weighted average period of 2.0 years.
Cash-Settled Awards
Cash-Settled RSU Awards. The table below summarizes the Cash-Settled RSU Award activity for the year ended December 31, 2021:
Cash-Settled RSU Awards
(in thousands)		 Weighted Average Grant-Date Fair Value per Share
Unvested at the beginning of the year 196  $47.56 
Granted (1)
3  $36.71 
Vested (14) $107.93 
Did not vest at end of performance period (14) $107.93 
Forfeited (24) $54.57 
Unvested at the end of the year 147  $34.60 
(1)Includes 3.2 thousand units associated with deferrals of certain non-employee director compensation pursuant to the terms of the Amended and Restated Deferred Compensation Plan for Outside Directors.
No Cash-Settled RSU Awards were granted to employees during the year ended December 31, 2021. Grant activity during the years ended December 31, 2020 and 2019 primarily consisted of Cash-Settled RSU Awards to executives as part of the annual grant of long-term equity incentive awards. These awards cliff vest after an approximate three-year performance period. The weighted average grant date fair value of Cash-Settled RSU Awards was $36.71, $26.84 and $105.08 for the years ended December 31, 2021, 2020 and 2019, respectively.
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 to calculate the grant date fair value per Cash-Settled RSU Award granted during the years ended December 31, 2020 and 2019 are the same as the performance-based RSU Equity Awards presented above.
For the years ended December 31, 2021, 2020 and 2019, Cash-Settled RSU Awards vested resulting in cash payments of $0.7 million, $0.2 million and $0.8 million, respectively. As of December 31, 2021, unrecognized compensation costs related to unvested Cash-Settled RSU Awards were $2.7 million and will be recognized over a weighted average period of 1.0 years.
Cash-Settled SARs. The table below summarizes the Cash SAR activity for the year ended December 31, 2021.
Stock Appreciation Rights
(in thousands)		 Weighted
Average
Exercise
Prices		 Weighted Average Remaining Life
(In years)		 Aggregate Intrinsic Value
(In millions)
Outstanding, beginning of the year 368  $100.34 
Granted —  $— 
Exercised —  $— 
Forfeited —  $— 
Expired (65) $156.00 
Outstanding, end of the year 303  $88.37  3.1 $— 
Vested, end of the year 303  $88.37  —  $— 
Vested and exercisable, end of the year —  $—  —  $— 
As all Cash SARs are vested, there is no unrecognized compensation costs as of December 31, 2021. The acquisition date fair value of the Cash SARs in 2019, calculated using the Black-Scholes-Merton option pricing model, was $4.6 million. The following table summarizes the assumptions used and the expiration date for the grants that occurred during the period presented below:
Cash SARs 2019
Expected term (in years) 5.4
Expected volatility 60.7  %
Risk-free interest rate 1.7  %
Dividend yield —  %
Expiration date March 17, 2026
The following table summarizes the classification in the consolidated balance sheets of the Company’s cash-settled awards for the periods indicated:
December 31,
2021 2020
(In thousands)
Cash SARs $7,884  $1,670 
Cash-Settled RSU Awards 1,382  182 
Other current liabilities 9,266  1,852 
Cash-Settled RSU Awards 6,366  1,336 
Other long-term liabilities 6,366  1,336 
Total Cash-Settled RSU Awards $15,632  $3,188 
Share-Based Compensation Expense, Net
Share-based compensation expense associated with the RSU Equity Awards, Cash-Settled RSU Awards, and 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:
Years Ended December 31,
2021 2020 2019
RSU Equity Awards $13,230  $13,030  $14,322 
Cash-Settled RSU Awards 6,412  (771) 1,021 
Cash SARs 6,215  (3,344) 443 
25,857  8,915  15,786 
Less: amounts capitalized to oil and gas properties (12,934) (6,252) (4,704)
Total share-based compensation expense, net $12,923  $2,663  $11,082