Share-Based Compensation and Other Benefit Plans

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

Share-Based Compensation and Other Benefit Plans

Share-Based Compensation

We reserved a total of 4,424,600 shares of common stock for issuance under the Penn Virginia Corporation Management Incentive Plan (the “Plan”) for share-based compensation awards. A total of 760,220 RSUs and 484,197 PRSUs have been granted to employees and directors through June 30, 2021. As of June 30, 2021, a total of 273,962 RSUs and 351,518 PRSUs are unvested and outstanding.

We recognized $3.2 million, including approximately $1.9 million as a result of the change-in-control event associated with the Juniper Transactions, and $1.0 million of expense attributable to the RSUs and PRSUs for the six months ended June 30, 2021 and 2020, respectively.

The table below presents the number of RSUs granted, the average grant-date fair value and the number of shares vested for the following periods:


	Six Months Ended June 30,
	2021	2020
RSUs granted	118,223	223,882
Average grant-date fair value	$13.84	$2.78
Issued upon vesting, net to shares withheld for income taxes	105,038	36,174

Compensation expense for RSUs is being charged to expense on a straight-line basis over a range of less than one to three years.

The table below presents the number of PRSUs granted and the number of shares vested for the following periods:


	Six Months Ended June 30,
	2021	2020
PRSUs granted 1	282,706	87,899
Average grant-date fair value 2	$13.63	—
Issued upon vesting, net to shares withheld for income taxes	6,800	3,895

___________________

1 The 2021 PRSU grants include two executive officers’ inducement awards that were originally granted in August 2020 and January 2021 that were amended in April 2021 to conform vesting conditions to the other PRSU awards granted in 2021.

2 Represents the average grant-date fair value of 2021 PRSU grants based on the Company’s ROCE performance (as defined below) and excludes the average grant-date fair value of PRSU grants based on the Company’s TSR performance (as defined below), which are provided in the table below.

Compensation expense for PRSUs with a market condition is being charged to expense, on a straight-line basis for the 2021 grants and graded-vesting for the 2020 and 2019 grants, over a range of less than one to three years. Compensation expense for PRSUs with a performance condition is recognized on a straight-line basis over three years, when it is considered probable that the performance condition will be achieved and such grants are expected to vest.

The 2021 PRSU grants are based 50% on the Company’s return on average capital employed (“ROCE”) relative to a defined peer group and 50% based on absolute total shareholder return and total shareholder return (“TSR”) relative to a defined peer group. The 2021 PRSUs cliff vest from zero to 200 percent of the original grant at the end of a three-year performance period based on satisfaction of the respective underlying conditions.

Vesting of PRSUs granted in 2020 and 2019 range from zero to 200 percent of the original grant based on the performance of our common stock (TSR-based) relative to a defined peer group. Due to the market condition for the 2019, 2020 and a portion of the 2021 PRSU grants, the grant-date fair value is derived by using a Monte Carlo model. The ranges for the assumptions used in the Monte Carlo model for these PRSUs granted during 2021, 2020 and 2019 are presented as follows:


	2021		2020		2019
Monte Carlo grant date fair value	$17.74 to $33.31		$2.40 to $16.02		$34.02
Expected volatility	131.74% to 134.74%		101.32% to 117.71%		49.9	%
Dividend yield	0.0	%	0.0	%	0.0	%
Risk-free interest rate	0.22% to 0.29%		0.18% to 0.51%		1.66	%
Performance period	2021-2023		2020-2022		2020-2022

PRSUs with a market condition do not allow for the reversal of previously recognized expense, even if the market condition is not achieved and no shares ultimately vest.

We recognize share-based compensation expense as a component of G&A expenses in our condensed consolidated statements of operations.

Other Benefit Plans

We maintain the Penn Virginia Corporation and Affiliated Companies Employees 401(k) Plan (the “401(k) Plan”), a defined contribution plan, which covers substantially all of our employees. We recognized $0.1 million and $0.3 million of expense attributable to the 401(k) Plan for the three and six months ended June 30, 2021, respectively. We recognized $0.2 million and $0.4 million of expense attributable to the 401(k) Plan for the three and six months ended June 30, 2020, respectively. The charges for the 401(k) Plan are recorded as a component of G&A expenses in our condensed consolidated statements of operations.

We maintain unqualified legacy defined benefit pension and defined benefit postretirement plans that cover a limited number of former employees, all of whom retired prior to January 1, 2000. The combined expense recognized with respect to these plans was less than $0.1 million for each of the three and six months ended June 30, 2021 and 2020. The charges for these plans are recorded as a component of Other income (expense) in our condensed consolidated statements of operations.