Stock-Based And Long-Term Incentive Compensation

12 Months Ended

Dec. 31, 2019

Stock-Based And Long-Term Incentive Compensation [Abstract]

Stock-Based And Long-Term Incentive Compensation

(6) Stock-Based and Long-Term Incentive Compensation

The Company is authorized to grant restricted stock units (RSUs), stock options, cash restricted stock units (CRSUs), performance share units (PSUs) and other cash and stock awards as part of the Long-Term Incentive Program (LTIP). The Compensation Committee determines the recipients of the equity awards, the type of awards made, the required performance measures, and the timing and duration of each grant. At December 31, 2019, 328,000 shares of the Company’s common stock were available for future grants under the plan.

Total stock-based compensation expense and the associated tax benefits are as follows (in thousands):

	Years ended December 31,
	2019		2018		2017
Stock options	$	2,743	$	4,247	$	4,289
Restricted stock units		15,716		19,828		21,899
Cash restricted stock units		298		-		-
Performance share units		935		6,912		9,740
Total compensation expense		19,692		30,987		35,928
Related income taxes		4,569		7,189		8,335
Total compensation expense, net of income taxes	$	15,123	$	23,798	$	27,593

Total stock-based compensation expense is reflected in general and administrative expenses in the consolidated statements of operations.

Equity-Classified Awards

Stock Options

Stock options were granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. The stock options generally vest in equal installments over three years and expire in ten years from the grant date. Non-vested stock options are generally forfeited upon termination of employment.

The Company recognizes compensation expense for stock option grants based on the fair value at the date of grant using the Black-Scholes-Merton option pricing model. The Company uses historical data, among other factors, to estimate the expected volatility and the expected life of the stock options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected life of the stock option.

The share and per-share information has been retroactively adjusted to reflect the effect of the 1-for-10 Reverse Stock Split.

The weighted average fair values of stock options granted and the assumptions used in estimating those fair values are as follows:

	Years ended December 31,
	2019			2018			2017
Weighted average fair value of stock options granted	$	24.60		$	56.12		$	83.60
Black-Scholes-Merton Assumptions:
Risk free interest rate		2.57	%		2.43	%		1.96	%
Expected life (years)		6			6			6
Volatility		56.62	%		51.21	%		48.22	%

The following table summarizes stock option activity for 2019:

	Number of Options	Weighted Average Option Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value ‎(in thousands)
Outstanding at beginning of period	643,545	$	182.69	5.0	$	-
Granted	59,286	$	43.6
Exercised	-	$	-
Expired	(33,471)	$	207.88
Outstanding at end of period	669,360	$	169.11	4.7	$	-
Exercisable at end of period	566,946	$	185.48	4.0	$	-
Options expected to vest at end of period	102,414	$	78.47	8.6	$	-

The Company received $0, $0 and $0.1 million during 2019, 2018 and 2017, respectively, from employee stock option exercises. The Company has reported tax benefits of $0, $0 and $0.1 million from the exercise of stock options for 2019, 2018 and 2017, respectively.

The following table summarizes non-vested stock option activity for 2019:

	Number of Options	Weighted Average Grant Date Fair Value
Non-vested at beginning of period	141,286	$	80.00
Granted	59,286	$	43.60
Vested	(98,158)	$	112.09
Non-vested at end of period	102,414	$	78.47

At December 31, 2019, the unrecognized compensation expense related to non-vested stock options was $2.0 million. The Company expects to recognize $1.4 million and $0.6 million of compensation expense associated with these options during 2020 and 2021, respectively.

Restricted Stock Units

RSUs vest in equal annual installments over three years. On the vesting date, each RSU is converted to one share of the Company’s common stock having an aggregate value determined by the Company’s closing stock price on the vesting date. Holders of RSUs are not entitled to any rights of a stockholder, such as the right to vote shares.

The share and per-share information has been retroactively adjusted to reflect the effect of the 1-for-10 Reverse Stock Split.

The following table summarizes RSU activity for 2019:

	Number of RSUs	Weighted Average Grant Date Fair Value
Non-vested at beginning of period	342,243	$	132.15
Granted	269,032	$	40.57
Vested	(162,404)	$	127.64
Forfeited	(34,905)	$	85.47
Non-vested at end of period	413,966	$	78.32

At December 31, 2019, there was $13.1 million of unrecognized compensation expense related to unvested RSUs. The Company expects to recognize $9.4 million, $3.4 million, and $0.3 million associated with unvested RSUs for 2020, 2021, and 2022, respectively.

Liability-Classified Awards

Cash Restricted Stock Units (CRSUs)

During 2019, the Company granted CRSUs to its employees as part of the Company’s LTIP. CRSUs vest in equal annual installments over three years. The ultimate amount earned is based on the closing price of the Company’s common stock on each of the vesting dates. The grant date fair value of the CRSUs was determined based on the closing price of the Company’s common stock on the grant date. The CRSUs liability is adjusted, based on the price changes in the Company’s common stock, through the end of each vesting period. At December 31, 2019, there were 174,424 CRSUs outstanding.

Performance Share Units (PSUs)

The Company has issued PSUs to its employees as part of the Company’s LTIP. There is a three year performance period associated with each PSU grant. The two performance metrics are the Company’s return on assets and total stockholder return relative to those of the Company’s pre-defined “peer group.” The PSUs will settle in cash or a combination of cash and up to 50% of equivalent value in the Company’s common stock, at the discretion of the Compensation Committee.

At December 31, 2019, there were 315,213 PSUs outstanding (94,091, 100,052 and 121,070 related to performance periods ending December 31, 2019, 2020 and 2021, respectively). The Company has recorded both current and long-term liabilities for this compensation award.

Employee Stock Purchase Plan (ESPP)

Eligible employees were allowed to purchase shares of the Company’s common stock at a discount during six-month offering periods beginning on January 1st and July 1st of each year the ESPP was in effect and ending on June 30 and December 31 of each year the ESPP was in effect, respectively. During the fourth quarter of 2019, the ESPP was terminated in accordance with its terms.

The following table summarizes ESPP activity (in thousands except shares):

	Years ended December 31,
	2019		2018		2017
Cash received for shares issued	$	689	$	2,625	$	3,074
Compensation expense	$	122	$	463	$	542
Shares issued		532,292		550,950		360,465

401(k)/Profit Sharing Plan

The Company maintains a defined contribution profit sharing plan for employees who have satisfied minimum service requirements. Employees may contribute up to 75% of their eligible earnings to the plan subject to the contribution limitations imposed by the Internal Revenue Service. The Company provides a nondiscretionary match of 100% of an employee’s contributions to the plan, up to 4% of the employee’s salary. The Company made contributions of $10.5 million, $10.0 million and $8.4 million 2019, 2018 and 2017, respectively.

Non-Qualified Deferred Compensation Plans

The Company maintains a non-qualified deferred compensation plan which allows senior management to defer up to 75% of their base salary, up to 100% of their bonus, up to 100% of the cash portion of their PSU compensation and up to 100% of the vested RSUs to the plan. The Company also maintains a non-qualified deferred compensation plan for its non-employee directors which allows each director to defer up to 100% of their cash compensation paid by the Company and up to 100% of their vested RSUs to the plan. Payments are made to participants based on their annual enrollment elections and plan balances.

The following table summarizes deferred compensation balances (in thousands):

		December 31,
	Balance sheet location	2019		2018
Deferred compensation assets	Intangible and other long-term assets, net	$	15,499	$	13,306
Deferred compensation liabilities, short-term	Accounts payable	$	1,372	$	1,138
Deferred compensation liabilities, long-term	Other long-term liabilities	$	23,466	$	19,766

Supplemental Executive Retirement Plan

The Company has a supplemental executive retirement plan (SERP). The SERP provides retirement benefits to the Company’s executive officers and certain other designated key employees. The SERP is an unfunded, non-qualified defined contribution retirement plan, and all contributions under the plan are unfunded credits to a notional account maintained for each participant. Under the SERP, the Company made annual contributions to a retirement account based on age and years of service. The participants in the plan received contributions ranging from 5% to 35% of salary and annual cash bonus, which totaled $1.1 million, $1.2 million and $0.9 million during 2019, 2018 and 2017, respectively. During 2019, 2018 and 2017, the Company paid $2.3 million, $0 and $0, respectively, to eligible participants in the SERP. The participation and funding of the SERP was suspended in the first quarter of 2020.