The Company provides stock-based compensation to employees, non-employee directors, consultants and advisors under the Company’s 2006 Long-Term Incentive Plan (“2006 Plan”). The 2006 Plan allows the flexibility to grant or award stock options, stock appreciation rights, restricted stock, unrestricted stock, stock units including restricted stock units and performance awards to eligible persons.

Number of shares

of the Company’s Common Stock authorized for

Number of shares
of the Company’s
Common Stock remaining for

Number of shares of the Company’s Common Stock subject to

issuance

future grants

Stock Options

Stock Grants

2006 Plan

5,400,000

1,306,243

639,412

90,189

The following table reflects the amount of stock-based compensation for continuing operations, for share settled awards, recorded in each financial statement line item for the years ended December 31, 2019, 2018 and 2017:


	Year Ended December 31,
	2019		2018		2017
Service expense	$	572	$	200	$	—
General and administrative expense	4,842		$	8,787	$	7,486
Equity in net loss (gain) of investees	—		137		76
(Loss) income from discontinued operations, net of tax	—		6		57
Total stock-based compensation	$	5,414	$	9,130	$	7,619

Stock-based compensation included in General and administrative expense is related to the NET Services segment, except a select group of employees that are included within Service expense. The amount included in equity in net loss (gain) of investee is related to the Matrix Investment segment, as a member of Matrix management held Providence equity awards.

The fair value of each stock option awarded to employees is estimated on the date of grant using the Black-Scholes or Monte Carlo option-pricing formula based on the following assumptions for the years ended December 31, 2019, 2018, and 2017:


	Year Ended December 31,
	2019					2018				2017
Expected dividend yield	0.0%					0.0%				0.0%
Expected stock price volatility	27.5%	—	33.0%	26.5%	—	39.8%	19.5%	—	43.0%
Risk-free interest rate	1.6%	—	2.5%	2.3%	—	2.9%	1.0%	—	2.2%
Expected life of options (years)	1.8	—	5.3	1.3	—	6.5	0.3	—	6.5

The risk-free interest rate was based on the U.S. Treasury security rate in effect as of the date of grant which corresponds to the expected life of the award. The expected stock price volatility was based on the Company’s historical data. The expected lives of options were based on the Company’s historical data, a simplified method for plain vanilla options, or a lattice model for more exotic options. The simplified method was used for plain vanilla options for which the Company did not have sufficient historical data to use in determining the expected life.

On December 2, 2019, the Board of the Company announced that on November 29, 2019, the Board appointed Daniel E. Greenleaf, as President and Chief Executive Officer of the Company and its subsidiary, effective December 11, 2019 ("Commencement Date"). In connection with his appointment, Mr. Greenleaf entered into an employment agreement ("Employment Agreement") with the Company that included equity awards effective as of the Commencement Date. The agreement provided for an award of stock options to acquire 67,090 shares of Company common stock at a price of $59.25, which was the closing price of the Company’s common stock on the grant date. Further, Mr. Greenleaf was granted additional awards of stock options to acquire 40,432 shares of Company common stock ("Premium Priced Options"), with the exercise price of each Premium Priced Option equal to one hundred fifteen percent (115%) of the closing price on the grant date, or an exercise price of $68.14. The options will vest ratably in equal installments on each of the first, second, third and fourth anniversaries of the Commencement Date.

On November 29, 2019, R. Carter Pate tendered his resignation as Interim Chief Executive Officer of the Company effective December 11, 2019. Following resignation, Mr. Pate continued to serve the Company as a Special Advisor to the President and Chief Executive Officer until the end of his contract term, December 31, 2019. As of December 31, 2019, Mr. Pate has 258,563 vested options at an average exercise price of $71.67, which will remain exercisable until April 8, 2021.

On September 20, 2019, the Company granted 88,264 stock options to executive management and key employees of the Company at an exercise price of $58.84, which was the closing price of the Company’s common stock on the grant date. The options will vest over 3.5 years with (i) 33.3% of the options vesting on March 15, 2021, (ii) 33.3% of the options vesting on March 15, 2022, and (iii) 33.4% of the options vesting on March 15, 2023. For certain employees, the options are subject to vesting over the period designated in the respective employee’s agreements. The options have an expiration date of September 20, 2024.


	Year ended December 31, 2019
	Number of Shares Under Option	Weighted- average Exercise Price		Weighted- average Remaining Contractual Term	Aggregate Intrinsic Value
Balance at beginning of period, January 1	908,588	$	61.44
Granted	203,586	61.25
Exercised	(219,054)	51.24
Forfeited/Canceled	(247,708)	63.35
Expired	(6,000)	11.72
Outstanding at end of period, December 31	639,412	$	64.72	2.79	$	1,151
Vested or expected to vest at end of period, December 31	639,412	$	64.72	2.79	$	1,151
Exercisable at end of period, December 31	321,694	$	67.39	1.33	$	758

In connection with Daniel Greenleaf's Employment Agreement and in addition to the stock options discussed above, Mr. Greenleaf was provided restricted stock awards ("RSAs") covering 20,104 shares of Company common stock at a price of $59.25, which was the closing price of the Company’s Common Stock on the grant date. The restricted shares will vest ratably in equal installments on each of the first, second, third and fourth anniversaries of the Commencement Date.

On September 20, 2019, the Company granted 46,865 RSAs to executive management and key employees of the Company at a price of $58.84, which was the closing price of the Company’s common stock on the grant date. The RSAs will vest over 3.5 years with (i) 33.3% of the options vesting on March 15, 2021, (ii) 33.3% of the options vesting on March 15, 2022, and (iii) 33.4% of the options vesting on March 15, 2023. For certain employees, the RSAs are subject to vesting over the period designated in the respective employee’s agreements.

On February 1, 2019, the Company granted R. Carter Pate 23,317 shares of restricted stock representing a value of $1,500 based on the closing price per share of the Company's stock on the grant date which vested on December 31, 2019.

During the year ended December 31, 2019, the Company issued 57,838 shares of its Common Stock to non-employee directors, executive officers and key employees upon the vesting of certain RSAs granted in 2018, 2017 and 2016 under the Company’s 2006 Plan.


	Shares	Weighted-average grant date fair value

Non-vested at beginning of period, January 1	47,328	$	52.56
Granted	102,113	$	61.49
Vested	(57,838)	$	57.00
Forfeited or cancelled	(1,414)	$	52.00
Non-vested at end of period, December 31	90,189	$	59.84

As of December 31, 2019, there was $8,633 of unrecognized compensation cost related to unvested share settled stock options and RSAs granted under the 2006 Plan. The cost is expected to be recognized over a weighted-average period of 1.76 years. The total fair value of stock options and RSAs vested was $6,913, $4,428 and $3,550 for the years ended December 31, 2019, 2018 and 2017, respectively.

During the years ended December 31, 2019, 2018 and 2017, respectively, the Company issued 1,857, 2,017 and 3,097 stock equivalent units (“SEUs”), which settle in cash upon vesting, to Coliseum Capital Partners, L.P., in lieu of a grant to Christopher Shackelton, Chairman of the Board, for his service on the Board, which vest one-third upon each anniversary of the vesting date. The fair value of the SEUs is based on the closing stock price on the last day of the period and the completed

During the year ended December 31, 2014, the Company issued 200,000 stock option equivalent units (“SOEUs”), with an exercise price of $43.81 per share, which settle in cash, to Coliseum Capital Partners, L.P in lieu of a grant to Christopher Shackelton, for other services rendered. All 200,000 SOEUs were outstanding and exercisable at December 31, 2019. No additional SOEUs were granted during the years ended December 31, 2019, 2018 and 2017. The Company recorded a benefit of $413 and $191 for SOEUs during the years ended December 31, 2019 and 2018, respectively, and an expense of $2,146 during the year ended December 31, 2017. The benefits and expense are included in “General and administrative expense” in the consolidated statements of operations. The fair value of the SOEUs was estimated as of December 31, 2019, 2018 and 2017 using the intrinsic value and the Black-Scholes option-pricing formula and amortized over the option’s graded vesting periods with the following assumptions:


	Year ended December 31,
	2019	2018					2017
Expected dividend yield	0.0%	0.0%					0.0%
Expected stock price volatility	30.8%	27.8%	—	30.6%	23.4%	—	32.1%
Risk-free interest rate	1.6%	2.5%	—	2.6%	1.8%	—	2.0%
Expected life of options (in years)	0.8	0.8	—	1.8	0.8	—	2.8

As of December 31, 2019 and 2018, the Company had a short-term liability of $3,282 and $3,719, respectively, in “Accrued expenses” in the consolidated balance sheets related to unexercised vested and unvested cash settled share-based payment awards. The cash settled share-based compensation expense in total excluded a tax benefit of $908 for the year ended December 31, 2017 and a tax benefit of $113 for year ended December 31, 2019. The cash settled share-based compensation expense in total excluded a tax expense of $4 for the year ended December 31, 2018. The unrecognized compensation cost for SEUs is expected to be recognized over a weighted average period of 0.8 years; however, the total expense for both SEUs and SOEUs will continue to be adjusted until the awards are settled.

On August 6, 2015 (the “Award Date”), the Compensation Committee of the Board adopted the 2015 Holding Company LTI Program (“HoldCo LTIP”) under the 2006 Plan. Under the program, executives would receive shares of Common Stock based on the shareholder value created in excess of an 8.0% compounded annual return between the Award Date and December 31, 2017 (the “Extraordinary Shareholder Value”). The Award Date value was calculated on the basis of the Providence stock price equal to the volume weighted average of the common share price over the 90-day trading period ending on the Award Date. The Extraordinary Shareholder Value was calculated on the basis of the Company's stock price equal to the volume weighted average of the Common Stock price over the 90-day trading period ending on December 31, 2017. A pool for use in the allocation of awards was created equal to 8.0% of the Extraordinary Shareholder Value.

It was determined that no shares would be distributed under the Holdco LTIP as the calculation of the pool amount was zero. $4,738 of expense is included in “General and administrative expense” in the consolidated statements of operations for the year ended December 31, 2017.These awards were classified as equity and the fair value of the awards was calculated using a Monte-Carlo simulation valuation model. For employees that joined the Company in 2016, the fair value of the awards granted in 2016 were estimated using the following assumptions: