Share-Based Compensation

All share-based compensation cost is measured at the grant date, based on the estimated fair value of the award. The Company issues time-based, performance-based and market performance-based equity awards. Time-based and market performance-based awards are recognized on a straight-line basis over the employees’ requisite service period, as adjusted for estimate of forfeitures. Performance-based awards are recognized ratably over the vesting period using a graded vesting attribution model upon the achievement of the performance target, as adjusted for estimate of forfeitures. The only performance-based awards issued by the Company were granted in 2016 and 2017.

Aggregate stock-based compensation charges were $3.2 million and $1.7 million during the three months ended June 30, 2019 and 2018, respectively, and $8.9 million and $6.2 million during the six months ended June 30, 2019 and 2018, respectively. Approximately $5.8 million and $4.2 million of these charges were considered routine stock compensation expense, and were included as a component of "Selling, general and administrative" expense on the accompanying Condensed Consolidated Statements of Operations during the six months ended June 30, 2019 and 2018, respectively. Approximately $3.1 million was recorded during the six months ended June 30, 2019 due to accelerated vesting of awards outstanding to former executives and an equity award modification upon trustee resignation, and were included as a component of "Acquisition, litigation, and other" expense on the accompanying Condensed Consolidated Statements of Operations. Approximately $2.0 million was recorded during the six months ended June 30, 2018 to modify restricted stock units, and were included as a component of "Acquisition, litigation, and other" expense on the accompanying Condensed Consolidated Statements of Operations. The award modifications and awards with accelerated vesting are discussed further under the section “Modification of Restricted Stock Units and Accelerated Vesting of Awards”. As of June 30, 2019, there was $29.4 million of unrecognized stock‑based compensation expense related to stock options and restricted stock units, which will be recognized over a weighted-average period of 2.4 years.

Americold Realty Trust 2008 and 2010 Equity Incentive Plans

During December 2008, the Company and the common shareholders approved the Americold Realty Trust 2008 Equity Incentive Plan (2008 Plan), whereby the Company issued either stock options or stock appreciation rights based upon a reserved pool of 4,900,025 common shares. The only active awards remaining under the 2008 Plan were exercised during 2018. No additional awards may be granted under the 2008 Plan. During December 2010, the Company and the common shareholders approved the Americold Realty Trust 2010 Equity Incentive Plan (2010 Plan), whereby the Company could issue stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonus awards, and/or dividend equivalents with respect to the Company’s common shares, cash bonus awards, and/or performance compensation awards to certain eligible participants, as defined, based upon a reserved pool of 3,849,976 of the Company’s common shares. No additional awards may be granted under the 2010 Plan.

Americold Realty Trust 2017 Equity Incentive Plan

On January 4, 2018, the Company’s Board of Trustees adopted the Americold Realty Trust 2017 Equity Incentive Plan (2017 Plan), which permits the grant of various forms of equity- and cash-based awards from a reserved pool of 9,000,000 common shares of the Company. On January 17, 2018, the Company’s shareholders approved the 2017 Plan. Equity-based awards issued under the 2017 Plan have the rights to receive dividend equivalents on an accrual basis. Dividend equivalents accrued are paid upon the vesting of the awards, and for awards that are forfeited during the vesting period no dividend equivalents will be paid. Certain restricted stock units issued in connection with the IPO to retain key employees of the Company have the right to receive nonforfeitable dividend equivalent distributions on unvested units. As of June 30, 2019, the Company accrued $0.8 million of dividend equivalents on unvested units payable to employees and non-employee trustees.

Modification of Restricted Stock Units and Accelerated Vesting of Awards

On January 4, 2018, the Company’s Board of Trustees approved the modification of awards to allow the grant of dividend equivalents to all participants in the 2010 Plan with respect to any and all vested restricted stock units of the Company that have not been settled pursuant to the 2010 Plan. On the same day, the Company’s Board of Trustees resolved that no further awards may be granted under the 2010 Plan after the approval of the 2017 Plan. As a result, the Company recognized stock-based compensation expense of $2.0 million to reflect the change in fair value associated with the modification of the dividend equivalents rights of the outstanding equity awards under the 2010 Plan.

During the first quarter of 2019, the Company’s Compensation Committee approved the modification of an award issued in 2018 to a member of the Board of Trustees upon his resignation. This modification immediately accelerated the next vesting tranche of 100,000 restricted stock units which otherwise would not have vested until 2020 assuming the trustee continued service, under the original award agreement. As a result of this modification, the Company recognized approximately $2.9 million of share-based compensation expense during the first quarter of 2019.

Additionally, during the first quarter of 2019, the Company recognized accelerated share-based compensation expense of $0.2 million upon the termination of former executives, in accordance with the terms of their original award agreements.

Restricted Stock Units Activity

Restricted stock units are nontransferable until vested. Prior to the issuance of a common share, the grantees of restricted stock units are not entitled to vote the shares. Time-based restricted stock unit awards vest in equal annual increments over the vesting period. Performance-based and market-based restricted stock unit awards vest upon the achievement of the performance target.

The following table summarizes restricted stock unit grants under the 2017 Plan during the three and six months ended June 30, 2019 and 2018, respectively:



Three Months Ended June 30,	Grantee Type	# of Restricted Stock Units Granted	Vesting Period	Grant Date Fair Value (in thousands)
2019	Employee group	35,042	1-3 years	$	1,163
2018	Employee group	58,625	1-4 years	$	1,004



Six Months Ended June 30,	Grantee Type	# of Restricted Stock Units Granted	Vesting Period	Grant Date Fair Value (in thousands)
2019	Trustee group	12,285	1 year	$	375
2019	Employee group	490,546	1-3 years	$	16,332
2018	Trustee group	373,438	1-3 years	$	5,975
2018	Employee group	955,751	1-4 years	$	14,071

Of the restricted stock units granted for the six months ended June 30, 2019, (i) 12,285 were time-based restricted stock units with a one-year vesting period issued to non-employee trustees in recognition of their efforts and oversight in the first year as a public company, (ii) 247,378 were time-based restricted stock units with various vesting periods ranging from one to three years issued to certain employees and (iii) 243,168 were market-based restricted stock units with a three-year vesting period issued to certain employees. The vesting of such market-based awards will be determined based on Americold Realty Trust's total shareholder return (TSR) relative to the MSCI US REIT Index (RMZ), computed for the performance period that began January 1, 2019 and will end December 31, 2021.

Of the restricted stock units granted for the six months ended June 30, 2018, (i) 331,250 were time-based restricted stock units with a three-year vesting period issued to non-employee trustees in connection with the IPO, (ii) 42,188 were time-based restricted stock units with a one year vesting period issued to non-employee trustees as part of their annual compensation, (iii) 431,751 were time-based restricted stock units with various vesting periods ranging from one to four years issued to certain employees and (iv) 524,000 were market-based restricted stock units issued to certain employees. The vesting of such market-based awards will be determined based on the Company's TSR, as described in the agreement granting such awards, computed for the performance period that began January 18, 2018 and will end December 31, 2020.

The following table provides a summary of restricted stock awards activity under the 2010 and 2017 Plans as of June 30, 2019:



Six Months Ended June 30, 2019
Restricted Stock	Number of Time-Based Restricted Stock Units		Aggregate Intrinsic Value (in millions)		Number of Performance-Based Restricted Stock Units		Aggregate Intrinsic Value (in millions)		Number of Market Performance-Based Restricted Stock Units		Aggregate Intrinsic Value (in millions)
Non-vested as of December 31, 2018	1,028,256		$	26.3	71,428		$	1.8	587,500		$	15.0
Granted	259,663				—				243,168
Vested ⁽¹⁾	(375,400	)			(14,286	)			—
Forfeited	(137,846	)			—				(41,031	)
Non-vested as of June 30, 2019	774,673		$	25.1	57,142		$	1.9	789,637		$	25.6

(1)

For certain vested restricted stock units, common shares shall not be issued until the first to occur of: (1) termination of service; (2) change in control; (3) death; or (4) disability, as defined in the 2010 Plan. Of these vested restricted stock units, 568,753 belong to a member of the Board of Trustees who has resigned and common shares shall not be issued until the first to occur: (1) change in control; or (2) April 13, 2022. Holders of these certain vested restricted stock units are entitled to receive dividends, but are not entitled to vote the shares until common shares are issued. The amount of vested restricted stock units was 627,890 as of June 30, 2019 and had a related aggregate intrinsic value of $20.4 million at $32.42 per unit.

The weighted average grant-date fair value of restricted stock units granted during six months ended June 30, 2019 was $33.23 per unit, for vested restricted stock units was $16.09, for forfeited restricted stock units was $16.36, and non-vested restricted stock units was $27.63 per unit.

Market Performance-Based Restricted Stock Units

During the six months ended June 30, 2019, the Compensation Committee of the Board of Trustees approved the annual grant of market performance-based restricted stock units under the 2017 Plan to employees of the Company. The awards, which were determined to contain a market condition, utilize TSR over a three-year measurement period as the market performance metric. Awards will vest based on the Company's TSR relative to the RMZ over a three-year market performance period, or the Market Performance Period, commencing in January 1, 2019 and ending on December 31, 2021, as applicable (or, if earlier, ending on the date on which a change in control of the Company occurs), subject to continued services. Vesting with respect to the market condition is measured based on the difference between the Company’s TSR percentage and the TSR percentage of the RMS, or the RMS Relative Market Performance. In the event that the RMS Relative Market Performance during the Market Performance Period is achieved at the “threshold,” “target” or “high” level as set forth below, the awards will become vested as to the market condition with respect to the percentage of RSUs, as applicable, set forth below:



Performance Level Thresholds	RMS Relative Market Performance	Market Performance Vesting Percentage
High Level	above 75^th percentile	200%
Target Level	55^th percentile	100%
Threshold Level	33^th percentile	50%
Below Threshold Level	below 30^th percentile	0%

If the RMS Relative Market Performance falls between the levels specified above, the percentage of the award that will vest with respect to the market condition will be determined using straight-line linear interpolation between such levels.

Market performance-based restricted units granted during the six months ended June 30, 2018, which were determined to contain a market condition, utilize absolute TSR over a three-year measurement period as the market performance metric. Awards will vest based on the Company’s TSR relative to the percentage appreciation (rounded to the nearest tenth of a percent), in the value per share of the Company's stock during the performance period, over a three-year market performance period, commencing on January 18, 2018 and ending on December 31, 2020 (or, if earlier, ending on the date on which a change in control of the Company occurs), subject to continued services. In the event that the TSR upon completion of the market performance period is achieved at the “minimum,” “target” or “maximum” level as set forth below, the awards will become vested as to the market condition with respect to the percentage RSUs, as applicable, set forth below:



Performance Level Thresholds	TSR	Market Performance Percentage
Maximum	12%	150% of Target Award
Target	10%	100% of Target Award
Minimum	8%	50% of Target Award

In the event TSR falls between 8% and 10%, TSR shall be determined using a straight line linear interpolation between 50% and 100% and in the event it falls between 10% and 12%, TSR shall be determined using a straight line linear interpolation between 100% and 150%.

In the event that the Company’s TSR does not meet 50% of the Target Award (i.e., the minimum threshold listed above), the Restricted Stock Units shall be automatically forfeited and neither the Company nor any Subsidiary shall have any further obligations to the participant under the agreement. In no event will the number of RSUs that vest pursuant to the agreement exceed 150% of the Target Award.

The fair values of the market-performance awards were measured using a Monte Carlo simulation to estimate the probability of the market vesting condition being satisfied. The Company’s achievement of the market vesting condition is contingent on its TSR over a three-year market performance period, relative to the previously defined metrics. Monte Carlo simulation is well-accepted for pricing market based awards, where the number of shares that will vest depends on the future stock price movements. For each simulated path, the TSR is calculated at the end of the performance period and determines the vesting percentage based on achievement of the performance target. Upon achieving the minimum performance target, RSUs will vest on the date and their payout will be the stock price at the time of vesting multiplied by the vesting percentage, plus cumulative dividends paid; then discounted at the future payout of vested RSUs to the valuation date by the risk free rate. The fair value of the RSUs is the average discounted payout across all simulation paths. Assumptions used in the valuations are summarized by grant date as follows:



Award Date	Expected Stock Price Volatility	Risk-Free Interest Rate	Dividend Yield
2/26/2018	30%	2.35%	4.70%
4/2/2018	30%	2.34%	4.04%
7/1/2018	30%	2.58%	3.41%
10/1/2018	25%	2.85%	3.01%
3/8/2019	22%	2.43%	2.70%
3/15/2019	22%	2.40%	2.62%
4/22/2019	22%	2.40%	2.62%
5/30/2019	22%	2.40%	2.62%

Stock Options Activity

The following tables provide a summary of option activity for the six months ended June 30, 2019 and 2018, respectively:



Options	Shares (In thousands)		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Terms (Years)
Outstanding as of December 31, 2018	2,355,787		$	9.81	5.4
Granted	—		—
Exercised	(1,092,789	)	9.81
Forfeited or expired	(179,000	)	9.81
Outstanding as of June 30, 2019	1,083,998		9.81		6.4

Exercisable as of June 30, 2019	332,000		$	9.81	4.4



Outstanding as of December 31, 2017	5,477,617		$	9.72	6.0
Granted	—		—
Exercised	(1,735,000	)	9.65
Forfeited or expired	(91,000	)	9.81
Outstanding as of June 30, 2018	3,651,617		9.76		5.5

Exercisable as of June 30, 2018	3,111,120		$	9.72	4.9

The total fair value at grant date of stock option awards that vested during the six months ended June 30, 2019 and 2018 was approximately $0.4 million and $0.6 million, respectively. The total intrinsic value of options exercised for the six months ended June 30, 2019 and 2018, was $21.5 million and $20.2 million, respectively.