11. Stock-Based Compensation

Stock Option Activity

For the nine months ended September 30, 2017, no stock options were issued or exercised. The following tables summarize certain information related to outstanding stock options under the Lonestar Resources Limited 2012 Employee Share Option Plan and the Lonestar Resources US Inc. 2016 Incentive Plan, which replaced the Lonestar Resources Limited 2012 Employee Share Option Plan following the Reorganization:

	Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)
Outstanding at December 31, 2016		191,750		$	15.00		0.25
Options vested and exercisable at December 31, 2016		191,750		$	15.00		0.25
Granted		—			—		—
Exercised		—			—		—
Canceled/Expired		(16,125	)		—		—
Forfeited		(75,000	)		20.00		—
Outstanding at September 30, 2017		100,625		$	15.00		0.25
Options vested and exercisable at September 30, 2017		100,625		$	15.00		0.25

Restricted Stock Units

In February 2017, the Company granted awards of restricted stock units (“RSUs”) covering 612,000 shares to certain of its employees. In August 2017, 100,000 units were issued to the Company’s chairman of the board of directors. The awards vest over a three-year period as follows: 40% on the first anniversary of issuance and 30% on each of the second and third anniversaries of issuance, such that the RSU’s will be fully vested on the third anniversary of issuance. The Company determines the fair value of granted RSU’s based on the market price of the Class A voting common stock of the Company on the date of grant. RSUs will be paid in Class A voting common stock or cash, at the Company’s option, after the vesting of the applicable RSU. Compensation expense for granted RSUs is recognized over the vesting period.

	Shares			Weighted Average Remaining Contractual Term (in years)
Outstanding at December 31, 2016		—			—
RSUs vested at December 31, 2016		—			—
Granted		712,000			3.0
Canceled/Expired		—			—
Forfeited		(10,000	)		2.8
Outstanding at September 30, 2017		702,000			2.5
RSUs vested at September 30, 2017		—			—

	Shares			Weighted Average Fair Value per Share		Weighted Average Remaining Contractual Term (in years)
Outstanding non-vested RSUs at December 31, 2016		—		$	—		—
Granted		712,000			6.00		3.0
Vested		—			—		—
Forfeited		(10,000	)		4.10		2.8
Outstanding non-vested RSUs at September 30, 2017		702,000		$	3.50		2.5

Stock Appreciation Rights

In February 2017, the Company granted awards of stock appreciation rights (“SARs”) covering 700,000 shares to certain of its employees and its non-employee directors. The awards vest over a three-year period as follows: 40% on the first anniversary of issuance and 30% on each of the second and third anniversaries of issuance, such that the SAR’s will be fully vested on the third anniversary of issuance. The SARs will expire five-years after the date of issuance. The exercise price of the SAR is the fair market value of the Company’s Class A voting common stock on the date of the grant. The SAR entitles the holder to receive from the Company upon exercise of the exercisable portion of the SAR an amount determined by multiplying the excess of the fair market value of one share on the date of exercise over the exercise price per share by the number of shares with respect to which the SAR is exercised. SARs will be paid in cash or common stock at holder’s election once the SAR is vested, with the provision that the Company possesses sufficient liquidity to allow for cash settlement of the SAR. The SARs are being treated as a liability in the Consolidated Balance Sheets.

	Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)
Outstanding at December 31, 2016		—			—		—
SARs vested and exercisable at December 31, 2016		—			—		—
Granted		700,000		$	7.20		5.0
Exercised		—			—		—
Canceled/Expired		—			—		—
Forfeited		(10,000	)		7.20		4.8
Outstanding at September 30, 2017		690,000		$	7.20		4.5
SARs vested and exercisable at September 30, 2017		—		$	—		—

	Shares			Weighted Average Fair Value per Share		Weighted Average Exercise Price per share		Weighted Average Remaining Contractual Term (in years)
Outstanding non-vested SARs at December 31, 2016		—		$	—	$	—		—
Granted		700,000			5.00		7.20		5.0
Vested		—			—		—		—
Forfeited		(10,000	)		4.10		7.20		4.8
Outstanding non-vested SARs at September 30, 2017		690,000		$	3.50	$	7.20		4.5

Stock-Based Compensation Expense

For the three and nine month periods ended September 30, 2017, the Company recorded stock-based compensation expenses of approximately $346,000 and $985,000, respectively, related to stock options, restricted stock units and stock appreciation rights. As of September 30, 2017, the total unrecognized stock-based compensation cost was approximately $3,786,000, which will be recognized over the period from October 2017 through February 2020.