Note 8 - Stock-based Compensation and Expense

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

8. STOCK-BASED COMPENSATION AND EXPENSE

Through December 31, 2021, the Company had been vesting a series of stock appreciation rights (SARS) to be settled in cash to certain executives. The SARS were considered liability-classified awards meaning their fair-values were remeasured at the end of each reporting period using a binomial lattice model and any changes in fair value for the vesting periods to-date were recorded through the income statement with a corresponding liability accrued on the balance sheet. Since December 31, 2021, the SARS have been exchanged for restricted stock units (RSUs) on the modification date of January 14, 2022 as approved by the Board of Directors. To account for this exchange, the company revalued the SARS as of the modification date of January 14, 2022 using the binomial lattice model and recorded changes in the vested value since December 31, 2021 as an adjustment to the income statement. The Company then reclassified the SARS accrued liability to APIC for new RSUs and recognized incremental expense. Shares deemed vested at the modification date were released and issued net of tax in March 2022. The company recorded expense for these RSUs for the period of January 15, 2022 to March 31, 2022.

Restricted Stock

In  March 2021, the Company granted 3 million restricted shares with an aggregate fair value of $16.4 million with a graded vesting schedule. One-third of which were vested in  April 2021, one-third of which were due to vest in  April 2022, and one-third of which were due to vest in  April 2023. The Company recorded a net credit of $3.9 million and expense of $2.0 million to compensation expense related to the forfeiture and partial vesting of these grants in the three months ended March 31, 2022 and March 31, 2021, respectively. The credit to compensation expense in the first three months of 2022 was due to a $5.2 million dollar reversal of expense related to the forfeiture of the restricted stock upon the termination of an employee as of March 31, 2022. 

Restricted Stock Units

	Number of restricted shares			Weighted-average grant date fair value
Non-vested shares, beginning of year		3,018,788		$	4.58
Granted		2,810,414			1.94
Vested		(1,332,788	)		1.96
Forfeited		(2,000,000	)		5.46
Non-vested shares, end of period		2,496,414		$	2.30