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SHARE-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]  
SHARE-BASED COMPENSATION SHARE-BASED COMPENSATION

Share-Based Compensation Plan
  
The Company grants share-based equity awards, including stock options and restricted stock, under the GTT Communications, Inc. 2018 Stock Option and Incentive Plan (the "GTT Stock Plan"). The GTT Stock Plan is limited to an aggregate 14,250,000 shares, of which 11,055,975 have been issued and are outstanding as of December 31, 2019.

The GTT Stock Plan permits the granting of time-based stock options, time-based restricted stock, and performance-based restricted stock to employees and consultants of the Company, and non-employee directors of the Company.

Time-based options granted under the GTT Stock Plan have an exercise price of at least 100% of the fair market value of the underlying stock on the grant date and expire no later than 10 years from the grant date. The Company uses the Black-Scholes option-pricing model to determine the fair value of its stock option awards at the time of grant. The stock options generally vest over four years with 25% of the options becoming exercisable one year from the date of grant and the remaining vesting 75% annually or quarterly over the following three years.

Time-based restricted stock granted under the GTT Stock Plan is valued at the share price of our common stock as reported on the NYSE on the date of grant. Time-based restricted stock generally vests over four years with 25% of the shares becoming unrestricted one year from the date of grant and the remaining vesting 75% annually or quarterly over the following three years.

Performance-based restricted stock is granted under the GTT Stock Plan subject to the achievement of certain performance measures. Once achievement of these performance measures is considered probable, the Company starts to expense the fair value of the grant
over the vesting period. The performance-based restricted stock is valued at the share price of the Company's common stock as reported on the NYSE on the date of grant. The performance grant vests quarterly over the vesting period once achievement of the performance measure has been met and approved by the Compensation Committee, typically one to two years.

The Compensation Committee of the Board of Directors, as administrator of the GTT Stock Plan, has the discretion to authorize a different vesting schedule for any awards.

In 2019, the Company implemented a sell-to-cover program for employees who elect to sell shares to cover any withholding taxes due upon vesting. Previously, the Company netted shares upon vesting and paid the withholding taxes directly.

Share-Based Compensation Expense

The following table summarizes the share-based compensation expense recognized as a selling, general and administrative expense in the consolidated statements of operations (amounts in millions):

 
Year Ended December 31,
 
2019
 
2018
 
2017
Time-based stock options
$
0.4

 
$
1.1

 
$
1.4

Restricted stock (1)
30.4

 
33.0

 
20.6

ESPP
0.4

 
0.3

 
0.2

Total
$
31.2

 
$
34.4

 
$
22.2



As of December 31, 2019, there was $58.2 million of total unrecognized compensation cost related to unvested share-based compensation awards. The following table summarizes the unrecognized compensation cost and the weighted average period over which the cost is expected to be amortized (amounts in millions):

 
December 31, 2019
 
Unrecognized Compensation Cost
 
Weighted Average Remaining Period to be Recognized (Years)
Time-based stock options
$
0.1

 
0.17
Time-based restricted stock
55.4

 
2.43
Performance-based restricted stock (1)
2.7

 
0.50
Total
$
58.2

 
2.34
(1) Excludes $25.2 million and $12.3 million of unrecognized compensation cost related to the 2018 Performance Awards and 2017 Performance Awards, respectively, as achievement of the performance criteria was not probable as of December 31, 2019.


Time-Based Stock Options

The Company uses the Black-Scholes option-pricing model method to calculate the fair value of the time-based stock options as of the grant date. The use of option valuation models requires the input by management of certain assumptions, including the expected stock price volatility, the expected life of the option term, and the forfeiture rate. These assumptions are utilized by the Company in determining the estimated fair value of the time-based stock options. There were no time-based stock options granted during the years ended December 31, 2019, 2018, and 2017.
    
The following table summarizes the time-based stock option activity:
 
 
Options
 
Weighted Average
Exercise Price
 
Weighted
Average
Fair Value
 
Weighted Average
Remaining
Contractual
Life (Years)
 
Aggregate
Intrinsic
Value
Balance, January 1, 2017
 
1,163,908

 
$
10.84

 
$
5.66

 
 
 
 
Granted
 
—

 
—

 
—

 
 
 
 
Exercised
 
(438,338
)
 
7.89

 
3.45

 
 
 
 
Forfeited or canceled
 
(37,607
)
 
16.44

 
7.82

 
 
 
 
Balance, December 31, 2017
 
687,963

 
12.40

 
6.85

 
 
 
 
Granted
 
—

 
—

 
—

 
 
 
 
Exercised
 
(162,688
)
 
10.12

 
5.26

 
 
 
 
Forfeited or canceled
 
(5,989
)
 
17.71

 
8.47

 
 
 
 
Balance, December 31, 2018
 
519,286

 
13.06

 
7.33

 
 
 
 
Granted
 
—

 
—

 
—

 
 
 
 
Exercised
 
(86,770
)
 
10.40

 
5.51

 
 
 
 
Forfeited or canceled
 
(15,699
)
 
14.19

 
7.40

 
 
 
 
Balance, December 31, 2019
 
416,817

 
$
13.57

 
$
7.71

 
4.84
 
$
—

Exercisable
 
409,614

 
$
13.59

 
$
7.01

 
4.82
 
$
—


 
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company's closing stock price on the last day of the year and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2019. The amount of aggregate intrinsic value will change based on the fair market value of the Company's stock.

As of December 31, 2019, the total vested portion of share-based compensation expense for time-based stock options was $9.2 million.

Time-Based Restricted Stock
 
The following table summarizes our time-based restricted stock activity: 
 
Shares
 
Weighted
Average
Fair
Value
Unvested balance, January 1, 2017
1,048,970

 
$
11.59

Granted
1,035,496

 
30.19

Forfeited
(112,887
)
 
22.27

Vested
(728,228
)
 
31.61

Unvested balance, December 31, 2017
1,243,351

 
14.39

Granted
944,009

 
46.42

Forfeited
(196,920
)
 
37.74

Vested
(667,402
)
 
42.99

Unvested balance, December 31, 2018
1,323,038

 
19.33

Granted
1,447,671

 
20.13

Forfeited
(291,110
)
 
35.91

Vested
(702,291
)
 
20.54

Unvested balance, December 31, 2019
1,777,308

 
$
16.59


 
The fair value of time-based restricted stock awarded totaled $29.1 million, $43.8 million and $31.3 million for the years ended December 31, 2019, 2018, and 2017, respectively.

Performance-Based Restricted Stock

The following table summarizes the performance-based restricted stock activity: 
 
Shares
 
Weighted
Average
Fair
Value
Unvested balance, January 1, 2017
928,436

 
$
12.66

Granted
930,000

 
35.15

Forfeited
—

 
—

Vested
(48,436
)
 
28.74

Unvested balance, December 31, 2017
1,810,000

 
23.79

Granted
905,500

 
33.59

Forfeited
—

 
—

Vested
(673,503
)
 
43.44

Unvested balance, December 31, 2018
2,041,997

 
21.65

Granted
44,000

 
27.00

Forfeited
(318,658
)
 
36.08

Vested
(280,404
)
 
22.08

Unvested balance, December 31, 2019
1,486,935

 
$
18.64



The Company granted $8.5 million of restricted stock during 2014 and early 2015 contingent upon the achievement of certain performance criteria (the "2014 Performance Awards"). The fair value of the 2014 Performance Awards was calculated using the value of GTT common stock on the grant date. The Company started recognizing share-based compensation expense for these grants when the achievement of the performance criteria became probable, which was in the third quarter of 2015. The 2014 Performance Awards started vesting in the fourth quarter of 2015 when the performance criteria were met and they continued to vest ratably through the third quarter of 2017. As of December 31, 2019, the 2014 Performance Awards were fully vested.

The Company granted $17.4 million of restricted stock during 2015 and 2017 contingent upon the achievement of certain performance criteria (the "2015 Performance Awards"). The fair value of the 2015 Performance Awards was calculated using the value of GTT common stock on the respective grant dates. Upon announcement of the Hibernia acquisition in November 2016, the achievement of two of the four performance criteria became probable and the Company started recognizing share-based compensation expense for these grants. Expense recognition continued through the first quarter of 2019. Additionally, upon announcement of the Global Capacity acquisition in June 2017, the achievement of the final two performance criteria became probable and the Company started recognizing share-based compensation expense for these grants. Expense recognition continued through the fourth quarter of 2019. The Company recognized share-based compensation expense related to the 2015 Performance Awards of $1.2 million, $7.8 million, and $6.3 million for the years ended December 31, 2019, 2018, and 2017, respectively. As of December 31, 2019, the 2015 Performance Awards were fully vested.

The Company granted $32.6 million of restricted stock during 2017 and 2018 contingent upon the achievement of certain performance criteria (the "2017 Performance Awards"). The fair value of the 2017 Performance Awards was calculated using the value of GTT common stock on the grant date. Upon the closing of the Interoute acquisition in May 2018, the achievement of two of the four performance criteria became probable and the Company started recognizing share-based compensation expense for these grants. Expense recognition is expected to continue through the second quarter of 2020. The Company recognized share-based compensation expense related to the 2017 Performance Awards of $7.2 million and $5.4 million for the years ended December 31, 2019 and 2018, respectively. No share-based compensation expense was recognized related to the 2017 Performance Awards during the 2017 period. As of December 31, 2019, $5.1 million of unvested 2017 Performance Awards had been forfeited due to employee departures and remaining unrecognized compensation cost related to the unvested 2017 Performance Awards was $14.9 million, inclusive of unrecognized compensation cost where achievement of the performance criteria was not probable as of December 31, 2019.

The Company granted $31.2 million of restricted stock during 2018 and 2019 contingent upon the achievement of certain performance criteria (the "2018 Performance Awards"). The fair value of the 2018 Performance Awards was calculated using the value of GTT common stock on the grant date. As of December 31, 2019, achievement of the performance criteria was not probable. Accordingly, the Company recognized no share-based compensation expense for the year ended December 31, 2019. As of December 31, 2019, $6.0 million of unvested 2018 Performance Awards had been forfeited due to employee departures and remaining unrecognized compensation cost related to the unvested 2018 Performance Awards was $25.2 million.
Employee Stock Purchase Plan
    
The Company has an Employee Stock Purchase Plan ("ESPP") that permits eligible employees to purchase common stock through payroll deductions at the lesser of the opening stock price or 85% of the closing stock price of the Company's common stock during each of the three-month offering periods. The offering periods generally commence on the first day and the last day of each quarter. At December 31, 2019, 292,897 shares were available for issuance under the ESPP.