Share-based Compensation

Stock Appreciation Rights

In conjunction with the offering, the Company vested all remaining stock appreciation rights (“SARS”) and settled the resulting liabilities related thereto. As a result, the Company recorded additional compensation expense in the amount of

$3.2

million in the

second

quarter of

2018.

The total intrinsic value of SARS outstanding was

$0.5

million as of

December 31, 2017.

Restricted Stock Units

As part of the Reorganization, all of the redeemable restricted units of New Mountain Lake were converted into restricted stock units of the Company, with the same vesting schedules. Therefore, we refer to redeemable restricted units issued prior to the Reorganization as restricted stock units. At the time of conversion, the restricted stock unit amounts were reclassified to additional paid in capital. The following is a summary of the Company’s restricted stock unit activity for the

six

months ended

June 30, 2018:

	Number of		Weighted
	Units		Average

Unvested at December 31, 2017		446,000		9.14
Granted		-
Vested-pre IPO		105,307		7.74
Forfeited-pre IPO		6,667		7.52
Unvested at June 13, 2018		334,026		9.62
Conversion in connection with IPO		4.6666667
Unvested post-IPO		1,558,787		2.06
Vested-post IPO		93,333		2.96
Unvested at June 30, 2018		1,465,454		2.01

These restricted stock unit grants vest over periods ranging from

three

seven

years. The Company recognized compensation expense of

$0.6

million and

$0.3

million during the

six

months ended

June 30, 2018

and

2017,

respectively. At

June 30, 2018

and

December 31, 2017,

the Company had

$2.5

million and

$3.2

million in unrecognized compensation expense related to restricted stock units, which is expected to be recognized over a period of approximately

5.2

and

5.4

years, respectively.

Incentive Plan

June 2018,

the Board approved the

2018

Omnibus Incentive Plan (the “Incentive Plan”) to become effective in connection with the offering. The Company has reserved an aggregate of

3,200,000

shares of its Class A common stock for issuance of awards under the Incentive Plan. Participants in the Incentive Plan will be selected by the Compensation Committee from the executive officers, directors, employees and consultants of the Company. Awards under the Incentive Plan

may

be made in the form of stock options, stock appreciation rights, stock awards, restricted stock units, performance awards, performance units, and any other form established by the Compensation Committee pursuant to the Incentive Plan.

June 2018,

the Company granted the following equity awards under the Incentive Plan:

	Number of Shares Granted		Vesting Period in Years		Grant Date Fair Value
Restricted shares		73,158		4	$	16.00
Restricted stock units		140,757		4	$	16.00
Stock options		192,203		4	$	6.09

June 30, 2018,

the Company had

$4.6

million in unrecognized compensation expense related to the above awards which is expected to be recognized over a period of approximately

4.0

years.