Stock-Based Compensation Plans

We grant stock option and restricted stock awards with vesting based on time of service conditions. We grant restricted stock unit awards with vesting based on time of service conditions, and in certain cases, subject to performance and market conditions. We grant phantom stock unit awards with vesting based on time of service, performance and market conditions, which are classified as liability awards under ASC Topic 718, Compensation—Stock Compensation since we expect to settle the awards in cash when they become vested.

We recognize compensation cost for our stock-based compensation awards based on the fair value estimated in accordance with ASC Topic 718, Compensation—Stock Compensation, and we recognize forfeitures when they occur. For our awards with graded vesting, we recognize compensation expense on a straight-line basis over the service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. The following table summarizes the stock-based compensation expense recognized, by award type, and the compensation expense (benefit) recognized for phantom stock unit awards during the three and six months ended June 30, 2019 and 2018 (amounts in thousands):



	Three months ended June 30,					Six months ended June 30,
	2019			2018		2019		2018
Stock option awards	$	23		$	99	$	74	$	241
Restricted stock awards	121			115		235		228
Restricted stock unit awards	183			883		885		1,887
	$	327		$	1,097	$	1,194	$	2,356
Phantom stock unit awards	$	(797	)	$	6,099	$	51	$	6,529

Stock Option Awards

We grant stock option awards which generally become exercisable over a three-year period and expire ten years after the date of grant. Our stock-based compensation plans require that all stock option awards have an exercise price that is not less than the fair market value of our common stock on the date of grant. We issue shares of our common stock when vested stock option awards are exercised. We estimate the fair value of each option grant on the date of grant using a Black-Scholes option pricing model. We did not grant any stock option awards during the six months ended June 30, 2019 or 2018.

Restricted Stock and Restricted Stock Unit Awards

We grant restricted stock awards that vest over a one-year period with a fair value based on the closing price of our common stock on the date of the grant. When restricted stock awards are granted, or when restricted stock unit awards are converted to restricted stock, shares of our common stock are considered issued, but subject to certain restrictions.

We grant restricted stock unit awards with vesting based on time of service conditions only (“time-based RSUs”), and we grant restricted stock unit awards with vesting based on time of service, which are also subject to performance and market conditions (“performance-based RSUs”). Shares of our common stock are issued to recipients of restricted stock units only when they have satisfied the applicable vesting conditions.

There were no performance-based restricted stock unit awards granted during the six months ended June 30, 2019 or 2018. The following table summarizes the number and weighted-average grant-date fair value of the restricted stock and time-based restricted stock unit awards granted during the three and six months ended June 30, 2019 and 2018:



	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Restricted Stock:
Restricted stock awards granted	648,100		78,632		648,100		78,632
Weighted-average grant-date fair value (per share)	$	0.79	$	5.85	$	0.79	$	5.85
Time-based RSUs:
Time-based RSUs granted	—		—		870,648		788,377
Weighted-average grant-date fair value (per unit)	$	—	$	—	$	1.38	$	3.85

Our time-based RSUs generally vest over a three-year period, with fair values based on the closing price of our common stock on the date of grant. Our performance-based RSUs cliff vest at 39 months from the date of grant and are granted at a target number of issuable shares, for which the final number of shares of common stock is adjusted based on our actual achievement levels that are measured against predetermined performance conditions. The number of shares of common stock awarded will be based upon the Company’s achievement in certain performance conditions, as compared to a predefined peer group, over the performance period, generally three years. As of June 30, 2019, we estimate that the achievement level for our outstanding performance-based RSUs granted in 2017 will be approximately 80% of the predetermined performance conditions.

Phantom Stock Unit Awards

We grant phantom stock unit awards with vesting based on time of service, performance and market conditions. Time-based phantom stock unit awards, which were granted in 2019, vest annually in thirds over a three-year vesting period. Performance-based phantom stock unit awards, which were granted in 2016, 2018 and 2019, cliff-vest after 39 months from the date of grant, with vesting based on time of service, performance and market conditions. The number of performance-based units ultimately awarded will be based upon the Company’s achievement in certain performance conditions, as compared to a predefined peer group, over the respective three-year performance periods. Each unit awarded will entitle the employee to a cash payment equal to the stock price of our common stock on the date of vesting, subject to an applicable maximum payout feature that is based on a multiple of the grant date stock price.

The fair value of time-based phantom stock unit awards is measured using a Black-Scholes pricing model and the fair value of performance-based phantom stock unit awards is measured using a Monte Carlo simulation model, with inputs that are defined as Level 3 inputs under ASC Topic 820, Fair Value Measurements and Disclosures.

There were no phantom stock unit awards granted during the three months ended June 30, 2019 or 2018. The following table summarizes the number, weighted-average grant-date fair value, and applicable maximum cash value of the phantom stock unit awards granted during the six months ended June 30, 2019 and 2018:



	Six months ended June 30,
	2019		2018
Performance-based:
Phantom stock unit awards granted	2,467,776		1,188,216
Weighted-average grant-date fair value (per unit)	$	1.10	$	3.06
Maximum cash value per unit (three times the grant date stock price)	$	4.62	$	9.66
Time-based:
Phantom stock unit awards granted	810,648		—
Weighted-average grant-date fair value (per unit)	$	1.17	$	—
Maximum cash value per unit (three times the grant date stock price)	$	4.62	$	—

These awards are classified as liability awards under ASC Topic 718, Compensation—Stock Compensation, because we expect to settle the awards in cash when they vest, and are remeasured at fair value at the end of each reporting period until they vest. The change in fair value is recognized as a current period compensation expense in our condensed consolidated statements of operations. Therefore, changes in the inputs used to measure fair value can result in volatility in our compensation expense. This volatility increases as the phantom stock awards approach the vesting date. We estimate that a hypothetical increase of $1 in the market price of our common stock, which was $0.25 as of June 30, 2019, if all other inputs were unchanged, would result in an increase in cumulative compensation expense of $1.0 million, which represents the hypothetical increase in fair value of the liability for the 2018 and 2019 phantom stock unit awards. The maximum payout feature of these awards would limit this volatility if the stock price exceeds the maximum payout threshold. As of June 30, 2019, we estimate the weighted-average achievement level for our outstanding phantom stock unit awards granted in 2018 and 2019 to be 100%.

In April 2019, we determined that 175% of the target number of phantom stock unit awards granted during 2016 were earned based on the Company’s achievement of the performance measures, as compared to the predefined peer group, which resulted in an aggregate cash payment of $3.5 million to settle these awards.