Stockholders’ Equity

Authorized Shares

The Company’s certificate of incorporation authorizes the issuance of two classes of capital stock designated as common stock and preferred stock, each having $0.0001 par value per share. As of December 31, 2018, the Company was authorized to issue 305,000,000 shares, of which 304,000,000 shares are designated common stock and 1,000,000 shares are designated preferred stock.

Dividend Provisions

The Company did not declare or pay any dividends during the years ended December 31, 2016, 2017 or 2018.

Voting Rights

Each holder of common stock has the right to one vote per share owned on matters presented for stockholder action.

Issuance of Common Stock and Warrants

Series I Warrants

In November 2008, the Company issued to certain investors 4,419,192 Series I Warrants to purchase up to 3,314,394 shares of common stock. The Series I Warrants became exercisable beginning six months from the date of issuance, had a term of seven years from the date they became exercisable, and carried an exercise price of $12.54 per share. All outstanding Series I Warrants expired in April 2016.

At-The-Market Offering Program

On May 31, 2017, the Company terminated its equity distribution agreement (the “Sales Agreement”) with Citigroup Global Markets Inc. (“Citigroup”), as sales agent and/or principal. The Sales Agreement was terminable at will upon written notification by the Company with no penalty. Pursuant to the Sales Agreement, the Company was entitled to issue and sell, from time to time through or to Citigroup, shares of its common stock having an aggregate offering price of up to $200,000 in an “at-the-market” offering program (the “ATM Program”). The ATM Program commenced on November 11, 2015 when the Company and Citigroup entered into the original equity distribution agreement, which was amended and restated on September 9, 2016 and again on December 21, 2016 prior to its termination.

The following table summarizes the activity under the ATM Program for the periods presented:



	Year ended December 31,		Year ended December 31,
(in 000s, except share amounts)	2016		2017
Gross proceeds	$	103,591	$	10,767
Fees and issuance costs	2,612		311
Net proceeds	$	100,979	$	10,456
Shares issued	31,064,434		3,802,500

Total Private Placement

On May 9, 2018, the Company entered into a stock purchase agreement (the “Purchase Agreement”) with Total Marketing Services, S.A. (“Total”), a wholly owned subsidiary of TOTAL S.A. (“TOTAL”). Pursuant to the Purchase Agreement, the Company agreed to sell and issue, and Total agreed to purchase, up to 50,856,296 shares of the Company’s common stock at a purchase price of $1.64 per share, all in a private placement (the “Total Private Placement”). The purchase price per share was determined based on the volume-weighted average price for the Company’s common stock between March 23, 2018 (the day on which discussions began between the Company and Total) and May 3, 2018 (the day on which the Company agreed in principle with Total regarding the structure and basic terms of its investment). As of the date of the Purchase Agreement, Total did not hold or otherwise beneficially own any shares of the Company’s common stock, and Total has agreed, until the later of May 9, 2020 or such date when it ceases to hold more than 5.0% of the Company’s common stock then outstanding, among other similar undertakings and subject to customary conditions and exceptions, to not purchase shares of the Company’s common stock or otherwise pursue transactions that would result in Total beneficially owning more than 30.0% of the Company’s equity securities without the approval of the Company’s board of directors.

On June 13, 2018, the Company and Total closed the Total Private Placement, in which: (1) the Company issued to Total all of the 50,856,296 shares of its common stock issuable under the Purchase Agreement, resulting in Total holding approximately 25.0% of the outstanding shares of the Company’s common stock and the largest ownership position of the Company as of September 30, 2018; (2) Total paid to the Company an aggregate of $83,404 in gross proceeds, which the Company has used and expects to continue to use for working capital and general corporate purposes, which may include executing its business plans, pursuing opportunities for further growth, and retiring a portion of its outstanding indebtedness; and (3) the Company and Total entered into a registration rights agreement, described below. In connection with the issuance of common stock, the Company incurred transaction fees of $1,909.

Pursuant to the Purchase Agreement, the Company and Total also entered into a registration rights agreement on June 13, 2018, upon the closing under the Purchase Agreement. Pursuant to the registration rights agreement, the Company filed a registration statement with the SEC to cover the resale of the shares issued and sold under the Purchase Agreement, which was declared effective on August 16, 2018, and is obligated to use its commercially reasonable efforts to maintain the effectiveness of such registration statement until all such shares are sold or may be sold without restriction under Rule 144 under the Securities Act of 1933, as amended. As of December 31, 2018, the Company was in compliance with all of its registration covenants set forth in the registration rights agreement.

Other

As of December 31, 2018, third parties held outstanding warrants, which expire in 2020 and 2025, respectively, to purchase equity interests in NG Advantage. Such warrants allow the purchase of up to 261,287 NG Advantage common units and are accounted for as liability-classified warrants. The fair value was $536 and $1,079 as of December 31, 2017 and 2018, respectively (see Note 9 for more information) and the gain (loss) from the change in fair value was $(21), $45 and $(543) for the years ended December 31, 2016, 2017 and 2018, respectively.

Stock-Based Compensation

The following table summarizes the compensation expense and related income tax benefit related to the Company’s stock-based compensation arrangements recognized in the accompanying consolidated statements of operations during the periods presented:



	Years Ended December 31,
	2016		2017		2018
Stock-based compensation expense, net of $0 tax in 2016, 2017 and 2018 ⁽¹⁾	$	8,092	$	8,423	$	5,307

(1) $300 of stock-based compensation expense for the year ended December 31, 2017 is recorded in “Asset impairments and other charges” in the accompanying consolidated statements of operations and in “Asset impairments and other charges” in the accompanying consolidated statements of cash flows. See Note 3 for more information.

Equity Incentive Plans

In December 2002, the Company adopted its 2002 Stock Option Plan (“2002 Plan”).

In December 2006, the Company adopted its 2006 Equity Incentive Plan (“2006 Plan”), which became effective on May 24, 2007, the date the Company completed its initial public offering of common stock. The 2002 Plan became unavailable for new awards upon the effectiveness of the 2006 Plan, at which time unissued awards under the 2002 Plan became available for grant under the 2006 Plan.

In May 2016, the Company adopted its 2016 Performance Incentive Plan (“2016 Plan”), which became effective on May 26, 2016, the date of approval of the 2016 Plan by the Company’s stockholders. The 2006 Plan became unavailable for new awards upon the effectiveness of the 2016 Plan. Unissued awards under the 2002 and 2006 Plans are not available for future grant under the 2016 Plan. If any outstanding award under the 2002 Plan or 2006 Plan expires or is canceled, the shares allocable to the unexercised portion of that award will be added to the share reserve under the 2016 Plan and will be available for grant under the 2016 Plan. As of December 31, 2018, the Company had 2,391,937 shares available for future grant under the 2016 Plan.

Stock Options

The Company has granted stock options to key employees that vest annually over the three years following the date of grant at a rate of 34%, 33% and 33%, respectively, if the holder is in service to the Company at each vesting date. The stock options granted have contractual terms of 10 years. The stock options are subject to the terms and conditions of the 2006 and 2016 Plans and a Notice of Grant of Stock Option and Stock Option Agreement.

The following table summarizes the Company’s stock option activity:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Options outstanding as of December 31, 2015	11,487,938		$	11.44
Granted	284,750		3.63
Exercised	—		—
Forfeited or expired	(304,892	)	11.30
Options outstanding as of December 31, 2016	11,467,796		$	11.25
Granted	1,139,500		2.83
Exercised	—		—
Forfeited or expired	(3,993,442	)	12.34
Options outstanding as of December 31, 2017	8,613,854		$	9.62
Granted	1,864,060		1.37
Exercised	(10,200	)	2.83
Forfeited or expired	(1,768,037	)	8.65
Options outstanding as of December 31, 2018	8,699,677		$	8.06	5.12	$	619
Options exercisable as of December 31, 2018	6,587,882		$	10.05	3.95	$	120
Options vested and expected to vest as of December 31, 2018	8,699,677		$	8.06	5.12	$	619

As of December 31, 2018, there was $1,461 of total unrecognized compensation cost related to unvested shares underlying outstanding stock options. That cost is expected to be expensed over a remaining weighted average period of 1.77 years. The total fair value of shares vested during the year ended December 31, 2018 was $2,115.

The fair value of each stock option granted was estimated as of the date of grant using the Black-Scholes option pricing model and using the following assumptions:



	Years Ended December 31,
	2016	2017	2018
Dividend yield	0.0%	0.0%	0.0%
Expected volatility	61.1% to 70.8%	63.61%	70.2% to 74.6%
Risk-free interest rate	1.2% to 2.0%	2.05%	2.70% to 2.71%
Expected life in years	6.0	6.0	6.0

The weighted-average grant date fair values per share of stock options granted during the years ended December 31, 2016, 2017 and 2018, were $2.30, $1.67 and $0.88, respectively. The volatility amounts used were estimated based on the Company’s historical and implied volatility of its traded options. The expected lives used were based on historical exercise periods and the Company’s anticipated exercise periods for its outstanding stock options. The risk-free interest rates used were based on the U.S. Treasury yield curve for the expected life of the stock options at the time of grant. The Company recorded $2,561, $2,213 and $2,014 of stock option expense during the years ended December 31, 2016, 2017 and 2018, respectively. The Company has not recorded any tax benefit related to its stock option expense.

Market-Based Performance Restricted Stock Units

The Company granted 2,034,500 market-based performance restricted stock units (“Market-Based RSUs”) to certain key employees during 2012 and 2014. A holder of Market-Based RSUs will receive one share of the Company’s common stock for each Market-Based RSU held if (x) between two years and four years from the date of grant of the Market-Based RSU, the closing price of the Company's common stock equals or exceeds, for twenty consecutive trading days, 135% of the closing price of the Company’s common stock on the Market-Based RSU grant date (the “Stock Price Condition”) and (y) the holder is employed by the Company at the time the Stock Price Condition is satisfied. If the Stock Price Condition is not satisfied prior to four years from the date of grant, the Market-Based RSUs are automatically forfeited. As a result, as of December 31, 2018, Market-Based RSUs granted in January and May 2012 and entitling the holders to receive 2,034,500 shares of the Company’s common stock had been forfeited for failure to satisfy the applicable Stock Price Condition.

The Market-Based RSUs are subject to the terms and conditions of the 2006 Plan and a Notice of Grant of Restricted Stock Unit and Restricted Stock Unit Agreement.

The following table summarizes the Company’s Market-Based RSU activity:



	Number of Shares		Weighted Average Fair Value at Grant Date		Weighted Average Remaining Contractual Term (in years)
RSU outstanding as of December 31, 2015	1,769,000		$	10.67
Granted	—		—
Vested	—		—
Forfeited or expired	(1,340,000	)	11.44
RSU outstanding as of December 31, 2016	429,000		$	8.26
Granted	—		—
Vested	—		—
Forfeited or expired	(94,500	)	8.26
RSU outstanding as of December 31, 2017	334,500		$	8.26
Granted	—		—
Vested	—		—
Forfeited or expired	(334,500	)	8.26
RSU outstanding and unvested as of December 31, 2018	—		$	—	0.00
RSU expected to vest as of December 31, 2018	—		—		0.00

The Company recorded $169, $0 and $0 of expense during the years ended December 31, 2016, 2017 and 2018, respectively, related to the Market-Based RSUs. The Company has not recorded any tax benefit related to its Market-Based RSU expense.

Service-Based Restricted Stock Units

The Company has granted service-based restricted stock units (“Service-Based RSUs”) to key employees that vest annually over the three years following the date of grant at a rate of 34%, 33% and 33%, respectively, if the holder is in service to the Company at each vesting date. The Service-Based RSUs are subject to the terms and conditions of the 2006 and 2016 Plans and a Notice of Grant of Restricted Stock Unit and Restricted Stock Unit Agreement.

The following table summarizes the Company’s Service-Based RSU activity:



	Number of Shares		Weighted Average Fair Value at Grant Date		Weighted Average Remaining Contractual Term (in years)
RSU outstanding as of December 31, 2015	1,650,776		$	5.50
Granted	850,125		3.63
Vested	(726,687	)	5.53
Forfeited or expired	(130,910	)	4.91
RSU outstanding as of December 31, 2016	1,643,304		$	4.56
Granted	2,835,331		1.36
Vested	(2,840,584	)	1.97
Forfeited or expired	(139,976	)	4.69
RSU outstanding as of December 31, 2017	1,498,075		$	3.41
Granted	1,907,800		1.36
Vested	(972,232	)	3.13
Forfeited or expired	(154,042	)	2.27
RSU outstanding and unvested as of December 31, 2018	2,279,601		$	1.88	0.93
RSU expected to vest as of December 31, 2018	2,279,601		$	1.88	0.93

As of December 31, 2018, there was $2,436 of total unrecognized compensation cost related to unvested shares underlying outstanding Service-Based RSUs. That cost is expected to be expensed over a remaining weighted-average period of 0.93 years.

The Company recorded $4,395, $5,901 and $2,976 of expense during the years ended December 31, 2016, 2017 and 2018, respectively, related to the Service-Based RSUs. The Company has not recorded any tax benefit related to its Service-Based RSU expense.

The fair value of each Service-Based RSU granted during the year ended December 31, 2018 was estimated using the closing stock price of the Company’s common stock on the date of grant.

Employee Stock Purchase Plan

On May 7, 2013, the Company adopted an employee stock purchase plan (the “ESPP”), pursuant to which eligible employees may purchase shares of the Company’s common stock at 85% of the fair market value of the common stock on the last trading day of two consecutive, non-concurrent offering periods each year. The Company has reserved 2,500,000 shares of its common stock for issuance under the ESPP, and the first offering period under the ESPP commenced on September 1, 2013.

The Company recorded $51, $41 and $34 of expense related to the ESPP during the years ended December 31, 2016, 2017 and 2018, respectively. The Company has not recorded any tax benefit related to its ESPP expense. As of December 31, 2018, the Company had issued an aggregate of 413,778 shares pursuant to the ESPP.

Non-Qualified Non-Public Subsidiary Unit Options

In September 2013, the Company’s subsidiary Renewables adopted a unit option plan and granted unit option awards thereunder (the “Renewables Option Awards”) to certain individuals. 150,000 Class B units representing membership interests in Renewables were initially reserved for issuance under the Renewables unit option plan.

The following table summarizes activity of Renewables Option Awards:



	Number of Units		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Options outstanding as of December 31, 2015	108,000		$	40.80
Options granted	—		—
Options exercised	—		—
Options forfeited or expired	—		—
Options outstanding as of December 31, 2016	108,000		$	40.80
Options granted	—		—
Options exercised	—		—
Options forfeited or expired	(108,000	)	40.80
Options outstanding as of December 31, 2017	—		$	—

The grant date fair value of unit options granted in September 2013 was $31.65, which was determined contemporaneously with the unit option grants. The volatility amount used was estimated based on the historical volatility of a certain peer group of Renewables for a period commensurate with the expected life of the unit options granted. The expected life used was Renewables' anticipated exercise periods for its outstanding unit options. The risk-free interest rate used was based on the U.S. Treasury yield curve for the expected life of the unit options at the time of grant. Renewables recorded $803, $0 and $0 of unit option expense during the years ended December 31, 2016, 2017 and 2018, respectively. Renewables has not recorded any tax benefit related to its unit option expense.

In connection with the closing of the BP Transaction, all holders of outstanding Renewables Option Awards entered into a surrender agreement with the Company and Renewables, pursuant to which (i) all Renewables Option Awards held by holders who were not members of Renewables’ Board of Managers were surrendered and canceled in full in exchange for, upon the closing of the BP Transaction and Renewables’ receipt of any future cash payment pursuant to the terms of the APA, a cash payment in an amount determined based on such holder’s percentage ownership of Renewables following a cashless “net exercise” of such holder’s Renewables Option Awards, and (ii) all Renewables Option Awards held by members of Renewables’ Board of Managers were surrendered and canceled in full in exchange for, upon the closing of the BP Transaction and Renewables’ receipt of any future cash payment pursuant to the terms of the APA, awards of shares of the Company's common stock (the “Company Stock Awards”). The number of shares of the Company's common stock subject to each Company Stock Award was calculated by dividing the cash payment to which the applicable holder would have been entitled as described in (i) above by the closing price of the Company's common stock on March 31, 2017, the closing date of the BP Transaction. All Company Stock Awards were granted under the 2016 Plan and are fully vested upon grant, and the shares subject to such awards are freely tradable upon issuance, subject to applicable securities laws relating to shares held by the Company’s affiliates.