Stock-Based Compensation

12 Months Ended

Dec. 31, 2020

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

15.Stock-Based Compensation

The Compensation Committee of the Company’s Board of Directors is responsible for the administration of the Company’s  stock incentive plans, which include the balance of shares remaining under the 2011 Long Term Incentive Plan (the "2011 LTIP") and 2017 Long Term Incentive Plan (the "2017 LTIP"), which was approved by shareholders in May 2017 and authorized the maximum aggregate number of shares to be issued of 2,400,000. In general, the Company’s 2017 LTIP provides for grants of restricted stock and stock options to be issued with a per-share price equal to the fair market value of a share of common stock on the date of grant. Option terms are specified at each grant date, but are generally are 10 years from the date of issuance. Options generally vest over a three to five year period.

Restricted Stock

The following table summarizes the restricted stock activity under the Company’s equity incentive plans :

		Weighted
	Number	Average
	of	Fair Value
	Shares	Per Share
Nonvested at January 1, 2018	372,460	$	6.01
Granted	333,864	$	7.47
Vested	(217,244)	$	6.61
Forfeited/repurchased shares	(71,139)	$	6.85
Nonvested at December 31, 2018	417,941	$	7.04
Granted	757,012	$	2.52
Vested	(585,754)	$	3.74
Forfeited/repurchased shares	(72,627)	$	6.05
Nonvested at December 31, 2019	516,572	$	4.29
Granted	1,038,044	$	2.76
Vested	(496,797)	$	2.87
Forfeited/repurchased shares	(107,383)	$	7.13
Nonvested at December 31, 2020	950,436	$	3.04

Independent directors receive equity compensation in the form of grants. In May 2020, the Company’s six independent directors each received equity compensation grants of 39,823 shares, with a fair value of $2.26 per share.

In January 2019, two new independent directors each received equity compensation grants of 8,427 shares, with a fair value of $4.45 per share. In May 2019, five of the Company’s independent directors each received equity compensation grants of 45,918 shares, with a fair value of $1.96 per share. In October 2019, a new independent director received an equity compensation grant of 14,218 shares, with a fair value of $4.22 per share.

In May 2018, the five of the Company’s independent directors each received equity compensation grants of 12,064 shares, with a fair value of $7.46 per share.

In February 2020, the Company granted an executive of the Company 15,121 shares of restricted common stock, which vested immediately on the date of grant. The fair value of all shares awarded on the date of grant was $4.96 per share. In March 2020, certain officers and executives of the Company were awarded 170,235 shares of restricted common stock with a vesting period of three years and a fair value of $3.73 per share. In May 2020, certain officers and executives of the Company were awarded 100,000 shares of restricted common stock with a vesting period of three years and a fair value of $2.26 per share. In September 2020, the Company granted an executive of the Company 25,000 shares of restricted common stock with a vesting period of three years and a fair value of $2.58 per share. In December 2020, certain officers and executives of the Company were awarded 95,000 shares with a vesting period of three years and a fair value of $4.92 per share.

In March 2019, the Company granted an executive of the Company 168,350 shares of restricted common stock, which vested one-third at March 31, June 30, and September 30, 2019, respectively. The fair value of all shares awarded on the date of the grant was $2.97 per share. In May 2019, certain officers and executives of the Company were awarded 62,500 shares with a vesting period of three years and a fair value of $1.96 per share. In July 2019, certain officers and executives of the Company were awarded 46,500 shares with a vesting period of three years and a fair value of $3.66. In December

2019, certain officers and executives of the Company were awarded 31,500 shares with a vesting period of three years and a fair value of $5.08 per share.

In May 2018, certain officers and executives of the Company were awarded 203,752 shares with a vesting period of three years and a fair value of $7.46 per share. In July 2018 an executive was awarded 2,769 shares of restricted common stock with a fair value of $9.03 per share.

Performance Stock

In May 2020, the Company awarded certain executives 300,000 shares of performance stock. The performance-based stock will potentially vest 50% if the target is met, with 25% each vesting on the second and third anniversary of the determination that the target was met, with 100% of the shares to be earned based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period ending June 30,2021. The Company evaluates the probability of achieving this each reporting period. The fair value of all shares awarded on the date of the grant was $2.26 per share.

In May 2019, the Company awarded certain executives 187,500 shares of performance stock. The performance-based stock will potentially vest 50% if the target is met, with 25% each vesting on the second and third anniversary of the grant, with 100% of the shares to be earned based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period. The fair value of all shares awarded on the date of the grant was $1.96 per share.

In August 2020, the Company determined the performance-based stock awarded in May 2019 vested at the outperformance level established above the target set based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period ending June 30, 2020. As a result, the executives earned an additional 93,750 shares of performance-based stock awards with a fair value of $1.96, of which 50% vested immediately on the date of determination and 25% each will vest on the first and second anniversary of the date of determination.

In May 2018, the Company awarded certain executives 67,023 shares of performance based stock, which will potentially vest at the end of fiscal 2020, with 100% of the shares to be earned based on the achievement of an objective, tiered return on invested capital measured over a three-year performance period. The fair value of all shares awarded on the date of the grant was $7.46 per share. In January 2021, the Company assessed the performance metric was not met and therefore these shares of performance based stock were forfeited.

Stock Options

The following table summarizes the stock option activity under the Company’s equity incentive plans:

		Weighted		Weighted
		Average		Average
	Number	Exercise		Contractual	Aggregate
	of	Price		Life	Intrinsic
	Shares	Per Share		(Years)	Value
Outstanding at January 1, 2018	1,911,121	$	7.79
Granted	374,215	$	7.49
Exercised	(488,303)	$	5.76
Forfeited	(132,252)	$	7.89
Outstanding at December 31, 2018	1,664,781	$	8.31
Granted	—	$	—
Exercised	(7,021)	$	4.94
Forfeited	(192,994)	$	15.26
Outstanding at December 31, 2019	1,464,766	$	7.41
Granted	—	$	—
Exercised	—	$	—
Forfeited	(542,151)	$	7.94
Outstanding at December 31, 2020	922,615	$	7.10
Vested and expected to vest at December 31, 2020	922,246	$	7.10	5.29	$	35
Exercisable at December 31, 2020	888,350	$	7.08	5.21	$	35

The Company calculates the fair value of each option on the date of grant using the Black-Scholes pricing model and the following weighted-average assumptions in each year:

	2018
Weighted average grant-date fair value of options granted	$	2.78
Risk-free interest rate		2.65	%
Expected volatility		52	%
Expected term of options (in years)		3.0
Dividend yield		—	%

The risk-free interest rate is based on interest rates on U.S. Treasury zero-coupon issues that match the contractual terms of the stock option grants. The expected term represents the period in which the Company’s equity awards are expected to be outstanding, which for the years presented is based on the exercise history.

For years ended December 31, 2020, 2019 and 2018, compensation expense related to stock based awards outstanding for the periods was $2.0 million, $2.8 million and $2.2 million, respectively. The Company applies a 3.2% and 5.5% forfeiture rate, which gets compounded over the vesting terms of the individual award, to its restricted stock and option grants, respectively, based on historical analysis. For the year ended December 31, 2020, expense related to the purchase of vested stock-based awards for certain officers of the Company was approximately $0.2 million.

During the year ended December 31, 2018, certain officers and executives of the Company were awarded 374,215 options with a vesting period of three years and a weighted average exercise price of $7.49 per share.

In the year ended December 31, 2020, no stock options were exercised. In the year ended December 31, 2019, the Company received proceeds of less than $0.1 million upon the exercise of 7,021 options. In the year ended December 31, 2018, the Company received proceeds of approximately $2.8 million upon the exercise of 488,303 options.

As of December 31, 2020, total unrecognized compensation expense related to unvested stock and options was approximately $2.4 million, which is expected to be recognized over a period of approximately 2.2 years.

	2020		2019		2018
Total intrinsic value of options exercised	$	—	$	—	$	1,286
Total fair value of shares vested	$	329	$	769	$	705