SHARE-BASED COMPENSATION

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

SHARE-BASED COMPENSATIONThe Company's 2017 Incentive Plan provides for the issuance of up to 5 million shares, subject to certain adjustments, which may be issued in the form of stock options, restricted stock awards, RSUs, stock appreciation rights, performance awards or other awards. Grants issued to date under the plan may be settled in or based on common stock. Awards may be granted to officers, employees, consultants and directors. The 2017 Incentive Plan provides that shares of common stock subject to awards granted become available for re-issuance if such awards expire, or are canceled, forfeited, settled in cash or otherwise terminated.

RSUs

As of September 30, 2021, the Company has granted three types of RSUs: time-based, market-based and, in connection with the Flexiti acquisition, performance-based.

Grants of time-based RSUs are valued at the grant date based on the closing market price of the Company's common stock and are expensed using the straight-line method over the service period. Time-based RSUs typically vest over a three-year period.

Grants of market-based RSUs are valued using the Monte Carlo simulation pricing model. The market-based RSUs granted to date vest after three years if the Company's total stockholder return over the three-year performance period meets a specified target relative to other companies in its selected peer group. Expense recognition for market-based RSUs occurs over the service period using the straight-line method.

Upon closing of the Flexiti acquisition in March 2021, the Company granted performance-based RSUs to certain Flexiti employees. Grants of performance-based RSUs are valued at the grant date based on the closing market price of the Company's common stock. The performance-based RSUs vest over two years if Flexiti achieves specified internal targets, including revenue less NCOs and loan originations metrics. Expense recognition for performance-based RSUs occurs ratably over the service period if it is probable that the targets will be achieved as of each period end. If such results are not probable, no share-based compensation expense is recognized and any previously recognized share-based compensation expense is reversed.

Unvested shares of RSUs generally are forfeited upon termination of employment, or failure to achieve the required performance condition, if applicable.

A summary of the activity of time-based, market-based and performance-based unvested RSUs as of September 30, 2021 and changes during the nine months ended September 30, 2021 is presented in the following table:


	Number of RSUs
	Time-Based	Market-Based	Performance-Based	Weighted Average Grant Date Fair Value per Share
December 31, 2020	1,012,792	758,713	—	$	10.26
Granted	1,089,372	299,053	253,310	15.34
Vested	(489,858)	—	—	11.06
Forfeited	(58,610)	(51,032)	—	11.22
September 30, 2021	1,553,696	1,006,734	253,310	$	13.05

Share-based compensation expense for the three months ended September 30, 2021 and 2020, which includes compensation costs from stock options and RSUs, was $4.0 million and $3.4 million, respectively, and during the nine months ended September 30, 2021 and 2020 was $10.1 million and $9.9 million, respectively. Share-based compensation expense is included in the unaudited Condensed Consolidated Statements of Operations as a component of "Corporate, district and other expenses."

As of September 30, 2021, there was $24.7 million of total unrecognized compensation cost related to stock options and RSUs. Total unrecognized compensation costs will be recognized over a weighted-average period of 1.9 years.