Share-Based Compensation

Management Incentive Plan

The Management Incentive Plan became effective on April 13, 2017.

The compensation committee, or the Compensation Committee, of the board of directors of the FES Ltd., or the Board, administers the Management Incentive Plan. The Compensation Committee has broad authority under the Management Incentive Plan to, among other things: (i) select participants; (ii) determine the terms and conditions, not inconsistent with the Management Incentive Plan, of any award granted under the Management Incentive Plan; (iii) determine the number of shares to be covered by each award granted under the Management Incentive Plan; and (iv) determine the fair market value of awards granted under the Management Incentive Plan, subject to certain exceptions.

Persons eligible to receive awards under the Management Incentive Plan include officers and employees of the Company. The types of awards that may be granted under the Management Incentive Plan include stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares and other forms of stock based awards.

The maximum number of shares of common stock that may be issued or transferred pursuant to awards under the Management Incentive Plan is 750,000, which number may be increased with the approval of FES Ltd.’s stockholders. If any outstanding award granted under the Management Incentive Plan expires or is terminated or canceled without having been exercised or settled in full, or if shares of common stock acquired pursuant to an award subject to forfeiture are forfeited, the shares of common stock allocable to the terminated portion of such award or such forfeited shares will revert to the Management Incentive Plan and will be available for grant under the Management Incentive Plan as determined by the Compensation Committee in consultation with the Chairman of the Board, subject to certain restrictions.

In the event of any change in the outstanding shares of common stock by reason of a stock split, stock dividend or other non-recurring dividends or distributions, recapitalization, merger, consolidation, spin-off, combination, repurchase or exchange of stock, reorganization, liquidation, dissolution or other similar corporate transaction, an equitable adjustment will be made in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Management Incentive Plan. Such adjustment may include an adjustment to the maximum number and kind of shares of stock or other securities or other equity interests as to which awards may be granted under the Management Incentive Plan, the number and kind of shares of stock or other securities or other equity interests subject to outstanding awards and the exercise price thereof, if applicable.

Restricted Stock Unit activity under the Management Incentive Plan was as follows (in thousands):



	Number of Shares		Weighted Average Grant Date Fair Value
Unvested as of December 31, 2017	363,600		$	11.00
Granted	86,400		$	4.70
Vested	(103,680	)	$	9.92
Forfeited	(17,080	)	$	11.00
Unvested as of December 31, 2018	329,240		$	9.68
Granted	—		$	—
Vested	(85,534	)	$	11.00
Forfeited	(71,990	)	$	5.14
Unvested as of December 31, 2019	171,716		$	11.00

Share based compensation expense recognized under the Management Incentive Plan was $0.9 million and $1.1 million during the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, unrecognized compensation cost was approximately $1.7 million to be recognized over approximately 1.7 years.