Stock-Based Compensation

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Stock Options

There were no new stock option grants during the nine months ended September 30, 2021. As of September 30, 2021, the aggregate intrinsic value for our outstanding stock options was $2.6 million, and the aggregate intrinsic value for our exercisable stock options was $2.6 million. The aggregate intrinsic value for the exercised stock options during the nine months ended September 30, 2021 was approximately $18.9 million. The remaining exercise period for both the outstanding and exercisable stock options as of September 30, 2021 was 3.9 years.

A summary of the stock option activity for the nine months ended September 30, 2021 is presented below:


	Number of Shares	Weighted Average Exercise Price
Outstanding at January 1, 2021	4,200	$	4.82
Granted	—	$	—
Exercised	(3,162)	$	3.40
Forfeited	—	$	—
Expired	(76)	$	14.00
Outstanding at September 30, 2021	962	$	8.76
Exercisable at September 30, 2021	962	$	8.76

Restricted Stock Units

During the nine months ended September 30, 2021, we granted a total of 851,885 restricted stock units ("RSUs") to employees, officers and directors pursuant to the ProPetro Holding Corp. 2020 Long Term Incentive Plan (the "2020 Incentive Plan"), which generally vest ratably over a three-year vesting period, in the case of awards to employees and officers, and generally vest in full after one year, in the case of awards to directors. RSUs are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases to be an employee or director of the Company prior to vesting of the award. Each RSU represents the right to receive one share of common stock. The grant date fair value of the RSUs is based on the closing share price of our common stock on the date of grant. As of September 30, 2021, the total unrecognized compensation expense for all RSUs was approximately $8.9 million, and is expected to be recognized over a weighted average period of approximately 2.0 years.

The following table summarizes RSUs activity during the nine months ended September 30, 2021:


	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding at January 1, 2021	1,165	$	8.50
Granted	852	$	9.69
Vested	(570)	$	8.58
Forfeited	(12)	$	10.40
Canceled	—	$	—
Outstanding at September 30, 2021	1,435	$	9.16

Performance Share Units

During the nine months ended September 30, 2021, we granted 650,774 performance share units ("PSUs") to certain key employees and officers as new awards under the 2020 Incentive Plan. The actual number of shares of common stock that may be issued under the PSUs ranges from 0% up to a maximum of 200% of the target number of PSUs granted to the participant, based on our total shareholder return ("TSR") relative to a designated peer group, generally at the end of a three year period. In addition to the TSR conditions, vesting of the PSUs is generally subject to the recipient’s continued employment through the end of the applicable performance period. Compensation expense is recorded ratably over the corresponding requisite service period. The grant date fair value of PSUs is determined using a Monte Carlo probability model. Grant recipients do not have any shareholder rights until performance relative to the peer group has been determined following the completion of the performance period and shares have been issued.

The following table summarizes information about PSUs activity during the nine months ended September 30, 2021:


Period Granted	Target Shares Outstanding at January 1, 2021		Target Shares Granted		Target Shares Vested		Target Shares Forfeited		Target Shares Outstanding at September 30, 2021		Weighted Average Grant Date FV Per Share
2018	84		—		(84)		—		—		$	27.51
2019	126		—		—		—		126		$	27.49
2020	809		—		—		—		809		$	8.30
2021	—		651		—		—		651		$	14.76
Total	1,019		651		(84)		—		1,586		$	12.48
Weighted Average FV Per Share	$	12.27	$	14.76	$	27.51	$	—	$	12.48

The total stock-based compensation expense for the nine months ended September 30, 2021 and 2020 for all stock awards was $8.4 million and $6.0 million, respectively. The total unrecognized stock-based compensation expense as of September 30, 2021 was approximately $19.5 million, and is expected to be recognized over a weighted average period of approximately 2.0 years.