Incentive Plan

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Incentive Plan

Incentive Plan

During the three-month periods ended March 31, 2019 and 2018, compensation expense related to share-based arrangements under the Basic Energy Services, Inc. Management Incentive Plan (the “MIP”), including restricted stock, restricted stock units and stock option awards, was approximately $3.3 million and $6.8 million respectively. Basic did not recognize a tax benefit for compensation expense recognized during the three-month periods ended March 31, 2019 and 2018.

At March 31, 2019, there was $13.2 million unrecognized compensation expense related to non-vested share-based compensation arrangements granted under the MIP. That cost is expected to be recognized over a weighted average period of 1.9 years.

Stock Option Awards

The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. Stock options granted under the MIP expire ten years from the date they are granted, and vest over a three-year service period. Total expense related to stock options in three-month periods ended March 31, 2019 and 2018, was approximately $755,000 and $1.1 million, respectively. Future expense for all options is expected to be approximately $2.5 million in total through February 2020.

The following table reflects changes during the three-month period and a summary of stock options outstanding at March 31, 2019:

				Weighted
				Average
		Weighted		Remaining	Aggregate
	Number of	Average		Contractual	Intrinsic
	Options	Exercise		Term	Value
Non-statutory stock options:	Granted	Price		(Years)	(000's)
Outstanding, beginning of period	595,736	$	39.23
Options granted	—	—
Options forfeited	(6,474)	$	40.12
Options exercised	—	—
Options expired	(71,228)	$	39.23
Outstanding, end of period	518,034	$	39.21	7.8	$—
Exercisable, end of period	347,528	$	39.21	7.8	$—
Vested or expected to vest, end of period	170,506	$	39.23	7.8	$—

 There were  no stock options exercised during the three months ended March 31, 2019 and 2018.

Restricted Stock Unit Awards

Time-based

 A summary of the status of Basic’s non-vested restricted stock units at March 31, 2019 and changes during the three months ended March 31, 2019 are presented in the following table:

		Weighted Average
	Number of	Grant Date Fair
Non-vested Units	Restricted Stock Units	Value Per Unit
Non-vested at beginning of period	191,302	$	16.58
Granted during period	—	—
Vested during period	(73,976)	16.17
Forfeited during period	(2,912)	17.31
Non-vested at end of period	114,414	$	16.83

 Valuation of time vesting restricted stock units for all periods presented is equal to the quoted market price for the shares on the date of the grant. The total fair value of time-vesting restricted stock units vested in three months ended March 31, 2019 and 2018, was $299,000 and $49,000, respectively, and is measured as the quoted market price of the Company’s common stock on the vesting date for the number of shares vested.

Performance-based

 A summary of the status of Basic’s non-vested performance-based grants at March 31, 2019 and changes during the three months ended March 31, 2019 are presented in the following table:

		Weighted Average
	Number of	Grant Date Fair
Non-vested Units	Performance Stock Units	Value Per Unit
Non-vested at beginning of period	682,985	$	27.27
Granted during period	—	—
Vested during period	(218,541)	36.33
Forfeited during period	(9,764)	26.66
Non-vested at end of period	454,680	$	22.93

The total fair value of performance-based restricted stock units vested during the three months ended March 31, 2019 and 2018 was $1.0 million and $4.8 million, respectively, and was measured as the quoted market price of the Company’s common stock on the vesting date for the number of shares vested.

Restricted Stock Awards

On May 21, 2018, Basic’s Board of Directors (the "Board") approved grants of an aggregate of 48,400 restricted stock shares to non-employee members of the Board. These grants are subject to vesting over a period of ten months and are subject to accelerated vesting under certain circumstances. The total fair value of restricted stock awards vested during the three months ended March 31, 2019 and 2018 was $33,000 and $77,000, respectively, and was measured as the quoted market price of the Company’s common stock on the vesting date for the number of shares vested.

Phantom Stock Awards

On March 21, 2019, the Compensation Committee of the Board approved grants of phantom restricted stock awards to certain key employees. Phantom shares are recorded as a liability at their current market value and are included in other current liabilities. The number of phantom shares issued on March 22, 2019 was 370,350. These grants remain subject to vesting annually in one-third increments over a three-year period, with the first portion vesting on March 22, 2020, and are subject to accelerated vesting in certain circumstances. Total expense related to phantom stock in three-month periods ended March 31, 2019 and 2018, was approximately $13,000 and $276,000, respectively.