Long-Term Incentive Plans

6 Months Ended

Jun. 30, 2023

Long-Term Incentive Plans

Long-Term Incentive Plans

Note 10. Long-Term Incentive Plans

In May 2021, the shareholders approved a new Equity Incentive Plan (“EIP”) in which the Legacy Amplify Management Incentive Plan (the “Legacy Amplify MIP”) was replaced by the EIP and no further awards will be allowed to be granted under the Legacy Amplify MIP. As of June 30, 2023, an aggregate of 932,675 shares were available for future grants under the EIP.

Restricted Stock Units

Restricted Stock Units with Service Vesting Condition

The restricted stock units with service vesting conditions (“TSUs”) are accounted for as equity-classified awards. The grant-date fair value is recognized as compensation cost on a straight-line basis over the requisite service period and forfeitures are accounted for as they occur. Compensation costs are recorded as general and administrative expense. The unrecognized cost associated with the TSUs was $6.0 million at June 30, 2023. The Company expects to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 2.2 years.

The following table summarizes information regarding the TSUs granted under the EIP for the period presented:

		Weighted-
		Average Grant-
	Number of	Date Fair Value
	Units	per Unit (1)
TSUs outstanding at December 31, 2022	1,502,556	$	3.82
Granted (2)	569,135	$	8.44
Forfeited	(59,679)	$	6.22
Vested	(595,090)	$	3.57
TSUs outstanding at June 30, 2023	1,416,922	$	5.68

(1) Determined by dividing the aggregate grant-date fair value of awards by the number of awards issued.

(2) The aggregate grant-date fair value of TSUs issued for the six months ended June 30, 2023 was $4.8 million based on a grant-date market price ranging from $6.52 to $8.91 per share.

Restricted Stock Units with Market and Service Vesting Conditions

The restricted stock units with market and service vesting conditions (“PSUs” or “PRSUs”) are accounted for as equity-classified awards. The grant-date fair value is recognized as compensation cost on a graded-vesting basis. The fair value of the awards is estimated on their grant dates using a Monte Carlo simulation. The Company recognizes compensation cost over the requisite service or performance period. The Company accounts for forfeitures as they occur. Compensation costs are recorded as general and administrative expense. The unrecognized cost associated with these awards was $2.9 million at June 30, 2023. The Company expects to recognize the unrecognized compensation cost for these awards over a weighted-average period of approximately 2.5 years.

2020 PSU Awards

The 2020 PSU awards vested based on the satisfaction of service and market vesting conditions, and the market vesting was based on the Company’s achievement of certain share price targets. The PSUs were subject to service-based vesting such that 50% of the PSUs service vested on the applicable market vesting date and an additional 25% of the PSUs service vested on each of the first and second anniversaries of the applicable market vesting date.

2021 PRSU Awards

The 2021 PRSU awards were issued collectively in separate tranches with individual performances periods beginning on January 1, 2021. For each of the performance periods, the awards will vest based on the percentage of the target PRSUs subject to the performance vesting condition, with 25% able to vest during the performance period of January 1, 2021 through December 31, 2021; 25% able to vest during the period January 1, 2021 through December 31, 2022 and 50% able to vest during the period of January 1, 2021 through December 31, 2023. Vesting of PRSUs can range from zero to 200% of the target units granted based on the Company’s relative total shareholder return as compared to the total shareholder return of the Company’s performance peer group over the applicable performance period.

2022 and 2023 PRSU Awards

The 2022 and 2023 PRSU awards were issued with a three-year vesting period beginning on the grant date and ending on the third anniversary of the grant date. The three-year performance period for the 2022 awards is January 1, 2022 through December 31, 2024. The three-year performance period for the 2023 awards is January 1, 2023 through December 31, 2025. Vesting of PRSUs can range from zero to 200% of the target units granted based on the Company’s relative total shareholder return as compared to the total shareholder return of the Company’s performance peer group over the applicable performance period.

The below table reflects the ranges for the assumptions used in the Monte Carlo model for the 2023 PRSUs awards:

	February 2023		April 2023
Expected volatility	119.2	%	92.5	%
Dividend yield	0.00	%	0.00	%
Risk-free interest rate	3.74	%	3.78	%

The following table summarizes information regarding the PSUs and PRSUs granted under the EIP for the period presented:

		Weighted-
		Average Grant-
	Number of	Date Fair Value
	Units	per Unit (1)
PSUs and PRSUs outstanding at December 31, 2022	380,512	$	4.28
Granted (2)	321,436	$	10.59
Forfeited	(144,567)	$	6.55
Vested	(154,680)	$	2.20
PSUs and PRSUs outstanding at June 30, 2023	402,701	$	9.31

(1) Determined by dividing the aggregate grant-date fair value of awards by the number of awards issued.

(2) The aggregate grant-date fair value of PRSUs issued for the six months ended June 30, 2023 was $3.4 million based on a calculated fair value price ranging from $1.27 to $15.04 per share.

Compensation Expense

The following table summarizes the amount of recognized compensation expense associated with the EIP, which are reflected in the accompanying Unaudited Condensed Consolidated Statements of Net Income for the periods presented (in thousands):

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Equity classified awards
TSUs		1,040		690		1,938		1,281
PSUs and PRSUs		300		164		343		217
Board RSUs		—		1		—		5
	$	1,340	$	855	$	2,281	$	1,503