XML 48 R38.htm IDEA: XBRL DOCUMENT v3.22.2.2
Stockholder's Equity (Tables)
 9 Months Ended
Sep. 30, 2022
Summary of Issued Shares of Common Stock The Company issued the following shares of common stock:

 

 

Three Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

 

Shares

 

 

Average Price per Share

 

 

Total
(in thousands)

 

 

Shares

 

 

Average Price per Share

 

 

Total
(in thousands)

 

 

Acquisitions

 

—

 

 

$

—

 

 

$

—

 

 

 

62,738

 

 

$

52.18

 

 

$

3,274

 

 

Exercise of options

 

28,111

 

 

 

11.70

 

 

 

329

 

 

 

354,918

 

 

 

8.30

 

 

 

2,946

 

 

Total

 

28,111

 

 

$

11.70

 

 

$

329

 

 

 

417,656

 

 

$

14.89

 

 

$

6,220

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

 

Shares

 

 

Average Price per Share

 

 

Total
(in thousands)

 

 

Shares

 

 

Average Price per Share

 

 

Total
(in thousands)

 

 

Acquisitions

 

—

 

 

$

—

 

 

$

—

 

 

 

143,800

 

 

$

41.86

 

 

$

6,020

 

 

Exercise of warrants (1)

 

—

 

 

 

—

 

 

 

—

 

 

 

67,713

 

 

 

17.19

 

 

 

—

 

 

Exercise of options

 

62,293

 

 

 

13.04

 

 

 

812

 

 

 

779,068

 

 

 

7.74

 

 

 

6,032

 

 

Restricted shares, net (1)

 

25,289

 

 

 

66.58

 

 

 

—

 

 

 

38,929

 

 

 

31.31

 

 

 

—

 

 

Payment of earn-out liability

 

—

 

 

 

—

 

 

 

—

 

 

 

539,607

 

 

 

46.33

 

 

 

25,000

 

 

Payment of purchase price
   true up

 

—

 

 

 

—

 

 

 

—

 

 

 

24,200

 

 

 

44.81

 

 

 

1,084

 

 

Total

 

87,582

 

 

$

28.50

 

 

$

812

 

 

 

1,593,317

 

 

$

25.43

 

 

$

38,136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Represents the non-cash release of common shares due to the exercise of warrants and the vesting of restricted stock.
Schedule of Share Authorized to be Issue and Available for Grant The following number of shares were authorized to be issued and available for grant:

 

 

 

September 30, 2022

 

 

 

2017 Plan

 

 

2013 Plan

 

 

Total

 

Shares authorized to be issued

 

 

5,140,112

 

 

 

2,037,019

 

 

 

7,177,131

 

Shares available for grant(1)

 

 

364,949

 

 

 

—

 

 

 

364,949

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2021

 

 

 

2017 Plan

 

 

2013 Plan

 

 

Total

 

Shares authorized to be issued

 

 

3,944,750

 

 

 

2,047,269

 

 

 

5,992,019

 

Shares available for grant

 

 

1,593,287

 

 

 

—

 

 

 

1,593,287

 

 

(1) In January 2022 the Board of Directors ratified the addition of 1,185,112 shares of common stock to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued

under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. Shares available for grant exclude awards of stock appreciation rights approved in December 2021 that are subject to vesting based on the achievement of certain market conditions, which have not yet been, and may not be, achieved. See footnote 1 to the table in Common Stock Reserved for Future Issuance below for additional information regarding the December 2021 grant.
Schedule of Stock Compensation Expense

Total stock compensation expense for the Plans was as follows:

 

 

Three Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

 

2017 plan

 

 

2013
plan

 

 

 

 

 

2017 plan

 

 

2013
plan

 

 

 

 

 

 

Options

 

 

Restricted
Stock

 

 

SARs

 

 

Options

 

 

Total

 

 

Options

 

 

Restricted
Stock

 

 

Options

 

 

Total

 

Cost of revenue

 

$

404

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

404

 

 

$

282

 

 

$

—

 

 

$

—

 

 

$

282

 

Selling, general and
   administrative expense

 

 

2,216

 

 

 

6,083

 

 

 

2,315

 

 

 

—

 

 

 

10,614

 

 

 

1,844

 

 

 

237

 

 

 

2

 

 

 

2,083

 

Total

 

$

2,620

 

 

$

6,083

 

 

$

2,315

 

 

$

—

 

 

$

11,018

 

 

$

2,126

 

 

$

237

 

 

$

2

 

 

$

2,365

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

 

2017 plan

 

 

2013
plan

 

 

 

 

 

2017 plan

 

 

2013
plan

 

 

 

 

 

 

Options

 

 

Restricted
Stock

 

 

SARs

 

 

Options

 

 

Total

 

 

Options

 

 

Restricted
Stock

 

 

Options

 

 

Total

 

Cost of revenue

 

$

1,069

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

1,069

 

 

$

1,178

 

 

$

—

 

 

$

10

 

 

$

1,188

 

Selling, general and
   administrative expense

 

 

6,449

 

 

 

17,892

 

 

 

6,965

 

 

 

—

 

 

 

31,306

 

 

 

4,638

 

 

 

749

 

 

 

11

 

 

 

5,399

 

Total

 

$

7,518

 

 

$

17,892

 

 

$

6,965

 

 

$

—

 

 

$

32,375

 

 

$

5,816

 

 

$

749

 

 

$

21

 

 

$

6,587

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Summary of Performance Hurdles The performance hurdles shall be deemed achieved if the average trading price per share of the Company’s common stock equals or exceeds the following stock prices:

 

SARs Stock Price Performance Hurdle

 

Portion of SARs Subject to Performance Hurdle

$

133.58

 

1/3

$

166.98

 

1/3

$

200.37

 

1/3
Summary of Weighted Average Assumptions Used in Black-Sholes Option-pricing Model

The following weighted-average assumptions were used in the Black-Sholes option-pricing model calculation:

 

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2021

 

Common stock value (per share)

 

$

43.72

 

 

$

39.83

 

Expected volatility

 

 

33.45

 

 

 

58.34

 

Risk-free interest rate

 

 

1.94

 

%

 

0.77

%

Expected life (years)

 

 

6.45

 

 

 

6.32

 

Forfeiture rate

 

None

 

 

None

 

Dividend rate

 

None

 

 

None

 
Schedule of Common Stock Reserved for Future Issuance The Company has reserved certain stock of its authorized but unissued common stock for possible future issuance in connection with the following:

 

 

 

September 30,

 

 

 

2022

 

 

2021

 

Montrose 2013 Stock Incentive Plan

 

 

861,514

 

 

 

2,047,269

 

Montrose 2017 Stock Incentive Plan(1)

 

 

7,757,995

 

 

 

3,944,750

 

Total

 

 

8,619,509

 

 

 

5,992,019

 

 

 

(1) In January 2022, the Board of Directors ratified the addition of 1,185,112 shares of common stock to the number of shares available for issuance under the 2017 Plan pursuant to the annual increase provision of such plan. Unless the Board of Directors determines otherwise, additional annual increases will be effective on each January 1, through January 1, 2027. The 2017 Plan permits the company to settle awards, if and when vested, in cash at its discretion. Pursuant to the terms of the 2017 Plan, the number of shares authorized for issuance thereunder will only be reduced with respect to shares of common stock actually issued upon exercise or settlement of an award. Shares of common stock subject to awards that have been canceled, expired, forfeited or otherwise not issued under an award and shares of common stock subject to awards settled in cash do not count as shares of common stock issued under the 2017 Plan. The Company expects to have sufficient shares available under the 2017 Plan to satisfy the future settlement of outstanding awards. Shares reserved for future issuance include 3,000,000 shares underlying the 3,000,000 performance SARs granted in December 2021 that are subject to vesting based on the achievement of certain market conditions. Assuming achievement at the highest price performance hurdle, approximately 2,000,000 shares of common stock would be issued upon vesting of these performance SARs. To date, none of the market conditions have been achieved.
Montrose Amended & Restated 2017 Stock Incentive Plan  
Schedule of Restricted Stock Activity

RSA and RSU activity was as follows:

 

 

Nine Months Ended September 30,

 

 

2022

 

 

2021

 

 

Shares

 

 

Average Price per Share

 

 

Fair Value
(in thousands)

 

 

Shares

 

 

Average Price per Share

 

 

Fair Value
(in thousands)

 

Awards granted

 

106,324

 

 

$

46.82

 

 

$

4,978

 

 

 

19,066

 

 

$

36.99

 

 

$

705

 
Summary of Stock Option Activity The following summarizes the options activity of the 2017 Plan:

 

 

 

Options to
Purchase
Common
Stock

 

 

Weighted-
Average
Exercise
Price per
Share

 

 

Weighted
Average
Grant Date
Fair Value
per Share

 

 

Weighted
Average
Remaining
Contract Life
(in Years)

 

 

Aggregate
Intrinsic
Value
of In-The-
Money
Options (in
Thousands)

 

Outstanding as of January 1, 2021

 

 

1,840,229

 

 

$

23

 

 

$

12

 

 

 

9.09

 

 

$

15,598

 

Granted

 

 

264,470

 

 

 

40

 

 

 

22

 

 

 

—

 

 

 

—

 

Forfeited/ cancelled

 

 

(29,025

)

 

 

28

 

 

 

—

 

 

 

—

 

 

 

—

 

Expired

 

 

(1,250

)

 

 

18

 

 

 

—

 

 

 

—

 

 

 

—

 

Exercised

 

 

(66,875

)

 

 

22

 

 

 

—

 

 

 

—

 

 

 

2,078

 

Outstanding as of September 30, 2021

 

 

2,007,549

 

 

 

25

 

 

 

14

 

 

 

8.53

 

 

 

73,724

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding as of January 1, 2022

 

 

2,036,729

 

 

$

26

 

 

$

14

 

 

 

8.30

 

 

$

91,030

 

Granted

 

 

664,784

 

 

 

44

 

 

 

16

 

 

 

—

 

 

 

—

 

Forfeited/ cancelled

 

 

(60,167

)

 

 

36

 

 

 

—

 

 

 

—

 

 

 

—

 

Exercised

 

 

(26,258

)

 

 

22

 

 

 

—

 

 

 

—

 

 

 

671

 

Outstanding as of September 30, 2022

 

 

2,615,088

 

 

$

30

 

 

$

15

 

 

 

8.04

 

 

$

18,784

 

Exercisable at September 30, 2022

 

 

1,010,302

 

 

 

26

 

 

 

—

 

 

 

7.48

 

 

 

9,966

 

 
Montrose Amended and Restated 2013 Stock Option Plan  
Summary of Stock Option Activity The following summarizes the activity of the 2013 Plan:

 

 

 

Options to
Purchase
Common
Stock

 

 

Weighted-
Average
Exercise
Price per
Share

 

 

Weighted
Average
Grant Date
Fair Value
per Share

 

 

Weighted
Average
Remaining
Contract Life
(in Years)

 

 

Aggregate
Intrinsic
Value
of In-The-
Money
Options (in
Thousands)

 

Outstanding as of January 1, 2021

 

 

1,787,869

 

 

$

6

 

 

$

1

 

 

 

5.40

 

 

$

43,867

 

Expired

 

 

(625

)

 

 

6

 

 

 

—

 

 

 

—

 

 

 

—

 

Exercised

 

 

(710,568

)

 

 

6

 

 

 

—

 

 

 

—

 

 

 

33,480

 

Outstanding as of September 30, 2021

 

 

1,076,676

 

 

 

6

 

 

 

2

 

 

 

4.65

 

 

 

59,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding as of January 1, 2022

 

 

897,674

 

 

$

6

 

 

$

2

 

 

 

4.37

 

 

$

57,529

 

Expired

 

 

(125

)

 

 

6

 

 

 

—

 

 

 

—

 

 

 

—

 

Exercised

 

 

(36,035

)

 

 

6

 

 

 

—

 

 

 

—

 

 

 

1,425

 

Outstanding as of September 30, 2022

 

 

861,514

 

 

$

6

 

 

$

2

 

 

 

3.61

 

 

$

23,448

 

Exercisable at September 30, 2022

 

 

861,514

 

 

 

6

 

 

 

—

 

 

 

3.61

 

 

 

23,448