Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

13. Stock-based Compensation

The Company’s stock incentive plan, the 2017 Omnibus Incentive Plan, provides for grants of stock options, restricted stock and performance awards. The Company’s directors, officers and other employees and persons who engage in services for the Company are eligible for grants under the plan. The stock incentive plan has authorized 12,074,128 shares of the Company’s common stock to be available for issuance, subject to adjustment in the event of a reorganization, stock split, merger or similar change in the Company’s corporate structure or the outstanding shares of common stock.

Restricted stock awards generally vest ratably over a four year period based on the date of grant. For restricted stock awards that contain only service conditions for vesting, the Company calculates the award fair value based on the closing stock price on the accounting grant date.

For the years ended December 31, 2022, 2021 and 2020 the Company recorded $25.8 million, $15.3 million and $11.1 million of total non-cash compensation expense, respectively. Certain awards were modified during the year ended December 31, 2021 and are classified as liabilities. The non-cash compensation expense associated with these awards was

$0.5 million and $0.6 million for the years ended December 31, 2022 and 2021, respectively, and is included in total non-cash compensation expense. During the year ended December 31, 2022, approximately $0.9 million of liability classified awards were settled with shares of restricted stock.

The non-cash compensation expense is reflected in selling, general and administrative expense and operating expenses (excluding depreciation and amortization), depending on the recipients’ duties, in the Company’s consolidated statements of operations. Total unrecognized non-cash compensation expense as of December 31, 2022 was $28.5 million and is expected to be recognized over a weighted-average period of 2.1 years.

The following table summarizes the restricted stock award activity for the years ended December 31, 2022, 2021 and 2020.


	Year ended December 31,
	2022			2021			2020
			Weighted Average			Weighted Average			Weighted Average
	Shares		Grant Price	Shares		Grant Price	Shares		Grant Price
Outstanding, beginning of period	4,325,124	$	9.10	4,990,971	$	5.71	3,140,168	$	8.56
Granted	867,064		17.26	1,422,358		17.17	3,585,929		4.44
Vested	(1,705,531)		8.55	(1,704,596)		6.23	(1,154,151)		8.87
Forfeited	(262,662)		12.66	(383,609)		7.71	(580,975)		7.05
Outstanding, end of period(1)	3,223,995	$	11.29	4,325,124	$	9.10	4,990,971	$	5.71

(1)	The total outstanding non-vested shares of restricted stock awards granted to employees and directors are included in total outstanding shares as of December 31, 2022, 2021 and 2020.

Nonvested Performance Shares

On March 3, 2022, the Company granted 199,592 performance shares which will vest based on the Company’s achievement level relative to the following performance measures at December 31, 2024: 50% based upon the Company’s Total Shareholder Return (“TSR”) relative to the TSRs of the Company’s peer group and 50% based on the Company’s three-year cumulative EBITDA metric. EBITDA is defined as net income (loss) before net interest expense, income taxes, depreciation and amortization (including impairments), impairment losses on intangibles and goodwill, the write-off of any asset, loss on early extinguishment of debt, integration and restructuring expenses and all non-cash charges and expenses (including stock compensation expense) and certain other income and expenses. Upon achievement of the minimum threshold performance metric, the grantee may earn 50% to 200% of their respective target shares based on the performance goal.

The performance shares based on relative TSR performance have a market condition and are valued using a Monte Carlo simulation model on the grant date, which resulted in a grant date fair value of $24.71 per share. The estimated fair value is amortized to expense over the requisite service period, which ends on December 31, 2024. The following assumptions were used in the Monte Carlo simulation for computing the grant date fair value of the performance shares with a market condition: risk-free interest rate of 1.66%, volatility factor in the expected market price of the Company's common shares of 58.47% and an expected life of three years.

The performance shares based on three-year cumulative EBITDA have a performance condition. The probability of achieving the performance condition is assessed at each reporting period. If it is deemed probable that the performance condition will be met, compensation cost will be recognized based on the closing price per share of the Company's common stock on the date of the grant multiplied by the number of awards expected to be earned. If it is deemed that it is not probable that the performance condition will be met, the Company will discontinue the recognition of compensation cost and any compensation cost previously recorded will be reversed. At December 31, 2022, achievement of the performance condition for the performance shares granted during each of the years ended December 31, 2022, 2021 and 2020 was deemed probable.