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Share-Based and Unit-Based Compensation
6 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Share-Based and Unit-Based Compensation Share-Based and Unit-Based Compensation
In connection with the Merger, the Company shareholders adopted an omnibus equity incentive plan, the 2021 LTIP, for the employees, consultants and the directors of the Company and its affiliates who perform services for the Company. The holders of unvested restricted units issued under the 2018 LTIP were issued substitute awards under the 2021 LTIP at the closing of the Merger. Upon the closing of the Merger and after giving effect to the adjustment resulting from the 1-for-12 reverse stock split, the 2021 LTIP had 1,387,022 shares of common stock available for issuance, of which 1,185,624 shares remained available as of March 31, 2021.
2021 Long-Term Incentive Plan
The 2021 LTIP will provide for potential grants of: (i) incentive stock options qualified as such under U.S. federal income tax laws ("ISO's:); (ii) stock options that do not qualify as incentive stock options; (iii) stock appreciation rights, or SARs; (iv) restricted stock awards; (v) restricted stock units, or RSUs; (vi) stock awards; (vii) performance awards; (viii) dividend equivalents; (ix) other stock-based awards; (x) cash awards; and (xi) substitute awards, all of which will be collectively be referred to as the "Awards".
The 2021 LTIP authorizes the Compensation Committee to administer the plan and designate eligible persons as participants, determine the type or types of Awards to be granted to an eligible person, determine he number of shares of stock or amount of cash to be covered by the Awards, approve the forms of award agreements for use under the plan, determine the terms and conditions of any Award, modify, waive or adjust any term or condition of an Award that has been granted, among other responsibilities delegated by the Company's Board.
Restricted Units: The Company granted 198,024 restricted shares to certain executives under the 2021 LTIP in connection with the Merger. These grants substituted restricted common shares issued under the 2021 LTIP for the unvested restricted units granted under the 2018 LTIP. These restricted shares vest over a period of 8- to 33-months and the holder receives dividends, in arrears, once the shares vest. The Company has accrued for these dividends which are reported in accrued liabilities and other non-current liabilities. The total expense is amortized on a straight-line basis, over the vesting period. The Company recorded $403 thousand and $0 of share-based compensation expense for the three and six months ended March 31, 2021 and 2020 related to this issuance. Approximately $5.5 million of additional share-based compensation expense will be recognized with this grant over the next 32 months.
On March 1, 2021, the Company granted 3,374 restricted shares to certain directors under the 2021 LTIP, which vest over a 1-year period. The holder receives dividends, in arrears, once the shares vest. The Company has accrued for these dividends which are reported in accrued liabilities and other non-current liabilities. The total expense is amortized on a straight-line basis, over the vesting period. The Company recorded $6 thousand and $0 of share-based compensation expense for the three and six months ended March 31, 2021 and 2020 related to this issuance. Approximately $75 thousand of additional share-based compensation expense will be recognized with this grant over the next 11 months.
On March 15, 2021, the Company granted restricted shares and stock awards with a fixed dollar amount of $4.6 million that will be settled in a variable number of shares, based on the 10-day weighted average share price prior to April 1, 2021. $3.7 million of the award was fully vested on April 1, 2021. The remaining $0.9 million will vest on April 1, 2022. As the number of shares was variable on the grant date, the Company accounted for the awards as a liability which was valued on March 31, 2021. The Company recorded $4.2 million of share-based compensation expense for the three and six months ended March 31, 2021 related to this issuance with the liability recorded in accrued liabilities on the balance sheet as of March 31, 2021. Approximately $0.9 million of additional share-based compensation expense will be recognized with this grant over the next 12 months.
Total share-based compensation expense of $4.6 million and $0, respectively, is included in general and administrative costs on the Company's condensed consolidated statement of operations for all of the issuances outstanding for the three and six months ended March 31, 2021 and 2020. The Company will recognize any forfeited shares, and any unpaid dividends for those shares, as they occur as an increase to accrued liabilities and a reduction from shareholders' equity on the consolidated balance sheet.
2018 Long-Term Incentive Plan
Restricted Units: The Company granted 14,766 restricted units to certain executives on April 29, 2019. Restricted units vest over a two- to three-year period and the holder receives dividends, in arrears, once the units vest. The Company has accrued for these dividends and are reported in accrued liabilities and other non-current liabilities. The total expense is amortized on a straight-line basis, over the vesting period. The Company recorded $112 thousand and $165 thousand of unit-based compensation expense for the three months ended March 31, 2021 and 2020 related to this issuance. The Company recorded $278 thousand and $318 thousand of unit-based compensation expense for the six months ended March 31, 2021 and 2020 related to this issuance.
The Company granted 15,767 restricted units to certain executives effective February 1, 2020 which vest over a three-year period and the Company simultaneously repurchased 1,229 shares from these executives for payment of their employee tax withholding obligations, resulting in a net issuance of 14,538. The total expense is amortized on a straight-line basis, over the vesting period. The Company recorded $81 thousand and $41 thousand of unit-based compensation expense for the three months ended March 31, 2021 and 2020 related to this issuance. The Company recorded $203 thousand and $41 thousand of unit-based compensation expense for the six months ended March 31, 2021 and 2020 related to this issuance.
On October 1, 2020, the Company granted 13,309 restricted units to certain executives which vest over a three-year period. The total expense is amortized on a straight-line basis, over the vesting period. The Company recorded $83 thousand and $0 of unit-based compensation expense for the three months ended March 31, 2021 and 2020 related to this issuance. The Company recorded $208 thousand and $0 of unit-based compensation expense for the six months ended March 31, 2021 and 2020 related to this issuance.
On October 5, 2020, an executive of the Company forfeited 904 restricted units from the grant dated April 29, 2019 and 1,802 restricted units from the grant dated February 1, 2020 totaling a total forfeiture of 2,706 restricted units.
Total unit-based compensation expense of $276 thousand and $206 thousand, respectively, is for all of the issuances outstanding for the three months ended March 31, 2021 and 2020. Total unit-based compensation expense of $689 thousand and $359 thousand, respectively, is for all of the issuances outstanding for the six months ended March 31, 2021 and 2020. Unit-based compensation expense is included in general and administrative costs on the Company's condensed consolidated statement of operations. The Company will recognize any forfeited units, and any unpaid dividends for those units, as they occur as a reduction to accrued liabilities and members' equity on the consolidated balance sheet.