Deferred compensation

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement, Noncash Expense [Abstract]

Our deferred compensation includes cash awards and equity-based awards which are either settled in cash or in stock.

Cash Awards

From time to time, we have granted cash awards with long term vesting requirements. Our cash awards, which are generally service-based, vest either in one year, in annual increments over a three year period or in annual increments over a four-year period. We accrue for the cost of each annual increment over the period that service is required to vest. A summary of compensation expense for our cash awards is presented below:


	Three months ended June 30,						Six months ended June 30,
	2020		2019		2020		2019
Cash LTIP expense (net of amounts capitalized)	$	187	$	67	$	354	$	158

As of June 30, 2020, the outstanding liability accrued for our Cash LTIP, based on requisite service provided, was $1,366.

Equity Awards

The Company’s outstanding equity based awards have been granted under the 2017 Chaparral Energy, Inc. Management Incentive Plan (the “MIP”) and the Chaparral Energy, Inc. 2019 Long-Term Incentive Plan (the “LTIP”), which replaced the MIP in June 2019. Our equity grants have been in the form or restricted stock awards (“restricted shares”) and restricted stock units (“RSUs”). In December 2019, we also granted restricted shares to our recently appointed chief executive officer under an inducement equity grant that is exempted from the general requirement of the NYSE rules that require equity-based compensation plans and arrangements to be approved by stockholders. The LTIP provides for the following types of awards: options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other incentive awards. The aggregate number of shares of Class A common stock, par value $0.01 per share, reserved for issuance pursuant to the LTIP is set at 3,500,000. Please see “Note 13: Deferred Compensation” in “Item 8. Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended December 31, 2019, for further details on the MIP, the LTIP as well as the nature and vesting requirements for our restricted shares and RSUs.

A summary of our restricted share activity is presented below:


	Time Shares								Performance Shares
	Weighted average award date fair value		Restricted shares	Vest date fair value		Weighted average award date fair value		Restricted shares
	($ per share)					($ per share)
Unvested and outstanding at January 1, 2020	$	5.41	1,069,505			$	1.53	1,089,343
Granted	$	—	—			$	—	—
Vested	$	15.71	(203,888)	$	130	$	—	—
Forfeited	$	8.87	(82,658)			$	6.94	(20,833)
Cancelled	$	20.05	(12,088)			$	—	—
Unvested and outstanding at June 30, 2020	$	2.09	770,871			$	1.33	1,068,510

A summary of our RSU activity is presented below:


	Equity classified RSUs
	Service-condition RSUs							Market condition RSUs
	Weighted average award date fair value		Restricted units	Vest date fair value		Weighted average award date fair value		Restricted units
	($ per share)					($ per share)
Unvested and outstanding at January 1, 2020	$	2.41	638,383			$	1.36	390,000
Granted	$	1.95	4,500			$	—	—
Vested	$	—	—	$	—	$	—	—
Forfeited	$	1.56	(228,094)			$	1.36	(200,000)
Unvested and outstanding at June 30, 2020	$	2.87	414,789			$	1.36	190,000


	Liability classified RSUs
	Weighted average award date fair value		Restricted units	Vest date fair value
	($ per share)
Unvested and outstanding at January 1, 2020	$	4.57	75,779
Granted	$	—	—
Vested	$	1.33	(60,000)	$	41
Forfeited	$	17.66	(1,515)
Unvested and outstanding at June 30, 2020	$	16.83	14,264

Stock-based compensation cost

Compensation cost is calculated net of forfeitures. We recognize the impact of forfeitures due to employee terminations in expense as those forfeitures occur instead of incorporating an estimate of such forfeitures. For awards with performance conditions, we will assess the probability that a performance condition will be achieved at each reporting period to determine whether and when to recognize compensation cost. For awards with market conditions, expense is recognized on the entire value of the award regardless of the vesting outcome so long as the participant remains employed.

A portion of stock-based compensation cost associated with employees involved in our acquisition, exploration, and development activities has been capitalized as part of our oil and natural gas properties. The remaining cost is reflected in lease operating and general and administrative expenses in the consolidated statements of operations. Stock-based compensation expense is as follows for the periods indicated:


	Three months ended June 30,						Six months ended June 30,
	2020		2019		2020		2019
Stock-based compensation cost	$	101	$	1,260	$	771	$	2,720
Less: stock-based compensation cost capitalized	(7)		(399)		(281)		(1,025)
Stock-based compensation expense	$	94	$	861	$	490	$	1,695
Number of vested shares repurchased or settled in cash	92,649		126,231		96,505		206,653
Payments for stock-based compensation	53		708		59		1,171

Based on a quarter end market price of $0.65 per share of our Class A common stock, the aggregate intrinsic value of all restricted shares and RSUs outstanding was $1,593 as of June 30, 2020. Payments for restricted shares and the associated number of shares repurchased are reflected as treasury stock transactions in our consolidated statements of equity. As of June 30, 2020, and December 31, 2019, accrued payroll and benefits payable included for stock-based compensation costs expected to be settled within the next

twelve months were $45 and $52, respectively, all of which relates to our cash-settled RSUs. Unrecognized stock-based compensation cost of approximately $1,357 as of June 30, 2020, is expected to be recognized over a weighted-average period of 1.3 years.