Stock-Based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

19. Stock-Based Compensation

The Company's stock-based compensation plans authorize awards of RSUs, stock options and other equity-related awards. In May 2019, in conjunction with the Company's stockholders approving the 2018 Plan, which authorizes a total of 2,550,000 shares to be issued pursuant to awards thereunder, the balances available for awards under the Company's predecessor plans (i.e., the First Incentive Plan and the Second Incentive Plan) (collectively, the "Prior Plans") were terminated. Although outstanding awards under the Prior Plans remain governed by the terms of the Prior Plans, no new awards will be granted or become available for grant under the Prior Plans.

Awards granted under the 2018 Plan prior to stockholder approval being obtained in May 2019 consisted of: (1) the 542,770 RSUs approved for management and other participants with respect to fiscal 2018 as to which the contingent cash-settlement feature lapsed upon approval of the 2018 Plan by stockholders (see Note 17, "Derivative Liability") and (2) 572,346 RSUs approved for management and other participants with respect to fiscal 2019 comprised of two components: (i) 50% represent performance-based target RSUs that require both attainment of Company performance criteria for 2019 (i.e., Adjusted EBITDA) and the participants remaining employed for a three-year service period (under the terms of the award, the specific number of shares that could become eligible to vest would range from 0% to 200% of the target award depending on the level of satisfaction of the Company performance criteria); and (ii) 50% represent service-based RSUs that vest over a period of three years. In addition, an aggregate of 111,500 RSUs were awarded during the year ended December 31, 2019 (following approval of the 2018 Plan by stockholders) as new hire or special recognition grants.

As of December 31, 2019, there were (i) 2,429,011 shares subject to outstanding awards under the Prior Plans, including 1,092,633 shares subject to market-price vesting conditions, and (ii) 939,947 shares subject to outstanding awards under the 2018 Plan, including 281,736 shares subject to performance-based target awards (the Company has preliminarily determined that the 2019 performance criteria for these performance awards will be met at a level of approximately 87% of the target award, such that approximately 13% of the target award would not become eligible to vest). As of December 31, 2019, there were 1,336,737 shares available for new awards under the 2018 Plan and no shares available for new awards under the Prior Plans. All awards consist of RSUs and Restricted Stock.

The Company also has an employee stock purchase plan ("ESPP") that authorizes the issuance of up to an aggregate of 500,000 shares of common stock pursuant to purchases thereunder by employees. The ESPP, which was approved by stockholders in July 2017, is administered by the Compensation Committee which has discretion to designate the length of offering periods and other terms subject to the requirements of the ESPP. The Company began a twelve-month offering period under the ESPP on June 3, 2019 that authorizes employees to contribute up to 10% of their base compensation to purchase a maximum of 1,000 shares. The shares will be purchased on the last day of the offering period at a discounted price that will equal to 85% of the lower of: (i) the closing price at the beginning of the offering period and (ii) the closing price at the end of the offering period. The Company estimates that approximately 10,000 shares will be purchased during this offering period. As of December 31, 2019, a total of 475,400 shares remain available for purchase under the ESPP.

A summary of the Company's RSU activity is as follows:

	Number of Shares			Weighted Average Grant Date Fair Value Per Share
Unvested Outstanding at January 1, 2019		2,251,059		$	6.19
Granted		746,522		$	6.53
Forfeited		(13,353	)	$	(6.81	)
Vested		(1,412,264	)	$	(6.10	)
Unvested Outstanding at December 31, 2019		1,571,964		$	6.43

The Company issued and withheld shares for taxes in connection with the vesting and settlement of RSUs during the year ended December 31, 2019 as follows: (1) 60,186 RSUs that had been granted upon the closing of the Business Combination settled on December 23, 2019, resulting in 36,813 shares being issued and 23,373 withheld for taxes; and (2) 273,316 RSUs that had been granted under the 2018 Plan vested on December 31, 2019, resulting in 166,959 shares being issued and 106,357 withheld for taxes (the processing of the issuance and delivery of such 166,959 shares did not occur until January 2020).

Stock-based compensation is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period. For performance awards that are contingent upon the Company achieving certain pre-determined financial performance targets, compensation expense is calculated based on the number of shares expected to vest after assessing the probability that the performance criteria will be met. Determining the probability of achieving a performance target requires estimates and judgment.  The modification of certain awards held by two executive officers of the Company in December 2017 resulted in $2.1 million of incremental compensation cost being recognized as of the modification date.

The Company recognized stock-based compensation expense as follows:

	Year Ended December 31,		Three Months Ended December 31,		Year Ended September 30,
	2019		2018		2018
	(in millions)
RSAs and RSUs	$	8.7	$	1.6	$	5.0
Modification of awards		—		—		2.1
Payroll taxes on vesting of RSUs		0.3		—		0.3
	$	9.0	$	1.6	$	7.4

Total unrecognized compensation expense related to unvested stock awards and unvested RSUs at December 31, 2019 amounts to $6.5 million and is expected to be recognized over a weighted average period of 2.0 years.