Restricted Stock

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Equity Incentive Award Plans

In January 2013, the Company's board of directors adopted and in June 2013, the Company's shareholders approved the ZAGG Inc 2013 Equity Incentive Award Plan (the “2013 Plan”). In April 2017, the compensation committee of the Company's board of directors adopted, and in June 2017, the Company's shareholders approved an amendment and restatement of the 2013 Plan (the “Amended Plan”). The Amended Plan is an “omnibus plan” under which stock options, stock appreciation rights, performance share awards, restricted stock, and restricted stock units can be awarded. The Amended Plan’s initial share reservation is 5,000 shares. The term of the plan is for 10 years from the date of original adoption of the 2013 Plan. As of December 31, 2019, there were approximately 1,943 shares available for grant under the Amended Plan.

Restricted Stock Units

The fair value of the restricted stock unit awards granted is based on the closing share price of the Company’s common stock on the date of grant. The restricted stock unit awards vest on a straight-line basis over a three-year vesting term for employees and a nine-month vesting term for annual director grants, depending on the terms of the individual grant. A summary of the status of the Company’s restricted stock unit awards as of December 31, 2019, and changes during the year ended December 31, 2019, is presented below:


	Restricted Stock Units (in thousands)	Weighted-Average Grant Date Fair Value (per share)

Outstanding as of December 31, 2018	821	$	10.49
Granted	957	9.02
Vested	(365)	9.71
Forfeited	(449)	10.05
Outstanding as of December 31, 2019	964	$	9.53

The grant of restricted stock unit awards with respective weighted-average fair value per share for the years ended December 31, 2019, 2018, and 2017, is summarized as follows:


	For the Years Ended December 31,
	2019		2018		2017

Granted	957		454		604
Weighted average fair value per share	$	9.02	$	11.96	$	8.26

As part of the 957, 454, and 604 restricted stock unit awards granted during the years ended December 31, 2019, 2018, and 2017, the Company granted 287, 182, and 409 restricted stock unit awards, respectively, to certain executives and employees of the Company where vesting is linked to specific performance criterion. These performance-based restricted stock unit awards only vest upon the (1) Company’s achievement of specified thresholds of net sales, Adjusted EBITDA, or specific goals for the individual executive, and (2) continued employment through the applicable vesting date. For the year ended December 31, 2019, the Company did not meet the required financial metrics, and as such, 287 of performance-based restricted stock unit awards granted in 2019 with a fair value of $2,840 were forfeited.

The estimated fair value of the restricted stock unit awards is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the award. For the performance-based awards, the Company recognizes compensation expense on a straight-line basis when management estimates the performance criteria are probable to be achieved. The following is stock-based compensation expenses related to restricted stock unit awards and tax benefits recorded for the years ended December 31, 2019, 2018, and 2017:


	For the Years Ended December 31,
	2019		2018		2017

Stock-based compensation expense related to restricted stock unit awards⁽¹⁾	$	4,022	$	3,009	$	3,602
Tax benefit recognized on stock-based compensation expense	$	1,155	$	813	$	1,378
Tax benefit realized from vested restricted stock units	$	775	$	2,212	$	962

(1) Stock-based compensation expenses are included as a component of selling, general, and administrative expense on the consolidated statements of income.

Certain employees of the Company elected to receive a net amount of shares upon the vesting of restricted stock unit award grants in exchange for the Company paying up to the maximum statutory withholding amount of the employees’ tax liabilities for the fair value of the award on the vesting date. This resulted in the Company recording $887, $2,722, and $268, during the years ended December 31, 2019, 2018, and 2017, respectively, as a reduction to additional paid-in capital.

As of December 31, 2019, there was $5,853 of total unrecognized compensation cost related to nonvested restricted stock unit awards granted under the Amended Plan, which is expected to be recognized over a weighted-average period of approximately 2.1 years.