Deferred Compensation Awards

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

DEFERRED COMPENSATION AWARDS

Stock-based compensation

Stock-based compensation related to option awards is measured based on the fair value of the award. The fair value of stock option awards is determined using a Black-Scholes option-pricing model. We recognize compensation expense associated with the options over the vesting period.

2016 stock option grant

In May 2016, GWRI’s Board of Directors granted stock options to acquire 325,000 shares of GWRI’s common stock to the members of the board. The options were granted with an exercise price of $7.50, the market price of the Company’s common shares on the NASDAQ Global Market at the close of business on May 20, 2016. The options vested over a two-year period, with 50% having vested in May 2017 and 50% having vested in May 2018. The options have a three-year life. The Company expensed the $0.3 million fair value of the stock option grant ratably over the two-year vesting period in accordance with ASC 718, Stock Compensation. No stock-based compensation expense was recorded for the year ended December 31, 2019 and $0.1 million was recorded for the year ended December 31, 2018. As of December 31, 2019, 325,000 options have been exercised with none outstanding. Of the 325,000 options exercised, 125,000 shares were exercised utilizing a cashless exercise, which resulted in an increase in shares outstanding of 27,364 as well as 97,636 shares recorded to treasury stock. This resulted in non-cash financing activities of $0.4 million and $0.2 million, respectively, for the years ended December 31, 2019 and 2018, respectively.

2017 stock option grant

In August 2017, GWRI's Board of Directors granted stock options to acquire 465,000 shares of GWRI's common stock to employees throughout the Company. The options were granted with an exercise price of $9.40, the market price of the Company's common shares on the NASDAQ Global Market at the close of business on August 10, 2017. The options vest over a four-year period, with 25% having vested in August 2018, 25% having vested in August 2019, 25% vesting in August 2020, and 25% vesting in August 2021. The options have a 10-year life. The Company will expense the $1.1 million fair value of the stock option grant ratably over the four-year vesting period in accordance with ASC 323. Stock-based compensation expense of $0.3 million was recorded for both years ended December 31, 2019 and 2018. As of December 31, 2019, 10,154 options have been exercised and 67,950 options have been forfeited with 386,896 outstanding.

2019 stock option grant

In August 2019, GWRI's Board of directors granted stock options to acquire 250,000 shares of GWRI's common stock to employees throughout the Company. The options were granted with an exercise price of $11.26, the market price of the Company's common shares on the NASDAQ Global Market at the close of business on August 13, 2019. The options vest over a four-year period, with 25% vesting in August 2020, 25% vesting in August 2021, 25% vesting in August 2022, and 25% vesting in August 2023. The options have a 10-year life. The Company will expense the $0.8 million fair value of the stock option grant ratably over the four-year vesting period. Stock-based compensation expense of $0.1 million was recorded for the year ended December 31, 2019. No stock-based compensation expense was recorded for the year ended December 31, 2018. As of December 31, 2019, 4,396 options have been forfeited with 245,604 outstanding.

A summary of stock option activity is as follows (in thousands, except option prices and years):


	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value










Options Outstanding at December 31, 2017	740	$	8.69
Granted	—
Exercised	(179)	$	7.54
Forfeited	(62)	$	9.40
Cancelled	—
Options Outstanding at December 31, 2018	498	$	9.02	7.0	$	558.9
Options Vested at December 31, 2018	196	$	8.43	4.4	$	335.4
Granted	250	$	11.26
Exercised	(67)	$	7.67
Forfeited	(49)	$	8.06
Cancelled	—
Options Outstanding at December 31, 2019	633	$	10.12	8.4	$	1,915.1
Options Vested at December 31, 2019	193	$	9.40	9.6	$	725.4

Phantom stock compensation

The following table details total awards granted and the number of units outstanding as of December 31, 2019 along with the amounts paid to holders of phantom stock units ("PSUs") for the years ended December 31, 2019 and 2018 (in thousands, except unit amounts):


			Amounts Paid For the Year Ended December 31,
Grant Date	Units Granted	Units Outstanding	2019		2018



Q1 2014	8,775	—	—		—
Q1 2015	28,828	—	—		22
Q1 2016	34,830	—	29		112
Q1 2017	22,712	1,893	80		73
Q1 2018	30,907	12,878	109		76
Q1 2019	32,190	24,143	86		—
Total	158,242	38,914	$	304	$	283

Stock appreciation rights compensation

The following table details the recipients of the stock appreciation rights ("SARs") awards, the grant date, units granted, exercise price, outstanding units as of December 31, 2019 and amounts paid during the years ended December 31, 2019 and 2018 (in thousands, except unit and per unit amounts):


						Amounts Paid For the Year Ended December 31,
Recipients	Grant Date	Units Granted	Exercise Price		Units Outstanding	2019		2018

Key Executive⁽¹⁾⁽³⁾	Q3 2013	100,000	$	1.59	—	$	—	$	166
Key Executive ⁽¹⁾⁽⁴⁾	Q4 2013	100,000	$	2.69	—	—		183
Members of Management ⁽¹⁾⁽⁵⁾	Q1 2015	299,000	$	4.26	118,000	481		—
Key Executives ⁽²⁾⁽⁶⁾	Q2 2015	300,000	$	5.13	85,000	705		447
Members of Management ⁽¹⁾⁽⁷⁾	Q3 2017	103,000	$	9.40	63,000	125		—
Members of Management ⁽¹⁾⁽⁸⁾	Q1 2018	33,000	$	8.99	24,750	27		—
Total		935,000			290,750	$	1,338	$	796

(1)The SARs vest ratably over sixteen quarters from the grant date.

(2)The SARs vest over sixteen quarters, vesting 20% per year for the first three years, with the remainder, 40%, vesting in year four.

(3)The exercise price was determined by taking the weighted average GWRC share price of the five days prior to the grant date of July 1, 2013.

(4)The exercise price was determined by taking the weighted average GWRC share price of the 30 days prior to the grant date of November 14, 2013.

(5)The exercise price was determined to be the fair market value of one share of GWRC stock on the grant date of February 11, 2015.

(6)The exercise price was determined to be the fair market value of one share of GWRC stock on the grant date of May 8, 2015.

(7)The exercise price was determined to be the fair market value of one share of GWRI stock on the grant date of August 10, 2017.

(8)The exercise price was determined to be the fair market value of one share of GWRI stock on the grant date of March 12, 2018.

For the years ended December 31, 2019 and 2018, the Company recorded approximately $1.4 million and $1.2 million of compensation expense related to the PSUs and SARs, respectively. Based on GWRI’s closing share price on December 31, 2019 (the last trading date of the quarter), deferred compensation expense to be recognized over future periods is estimated for the years ending December 31 as follows (in thousands):


	PSUs		SARs
2020	272		102
2021	139		102
2022	—		102
2023	—		15
Total	$	411	$	321