Equity Incentive Compensation Plans and Other Long-term Incentive Programs

The Company maintains various stock-based compensation plans and other employee benefits as discussed below. Stock-based compensation is measured at the grant date based on the value of the awards, and the fair value is recognized on a straight-line basis over the requisite service period (usually the vesting period). Nonvested shares of common stock generally vest ratably over a three year service period and nonvested shares of common stock units vest over a one year service period. Cash-based compensation is measured at fair value at each reporting date and is recognized on a straight-line basis over the requisite service period (usually the vesting period). Cash-based awards generally have a cliff vest of three years.

The following table presents the long-term equity and cash incentive compensation related to awards for the periods indicated:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(in thousands)
Nonvested common stock ⁽¹⁾	$	1,654	$	1,434	$	4,504	$	4,437
Nonvested common stock units⁽¹⁾	344		174		791		516
Nonvested performance-based shares ⁽¹⁾	—		—		—		558
Nonvested performance cash units ⁽²⁾⁽³⁾	257		1,073		635		(27		)
Total	$	2,255	$	2,681	$	5,930	$	5,484


(1)	Unrecognized compensation expense as of September 30, 2018 was $10.0 million, which related to grants of nonvested shares of common stock that are expected to be recognized over a weighted-average period of 1.9 years.


(2)	The nonvested performance-based cash units are accounted for as liability awards with $1.4 million in accounts payable and accrued liabilities as of December 31, 2017 and $0.9 million and $3.0 million in derivatives and other noncurrent liabilities as of September 30, 2018 and December 31, 2017, respectively, in the Unaudited Consolidated Balance Sheets.


(3)	Liability awards are fair valued at each reporting date. The expense for the period will increase or decrease based on updated fair values of these awards at each reporting date.

Nonvested Equity and Cash Awards. The following tables present the equity and cash awards granted pursuant to the Company's various stock compensation plans. A summary of the Company's nonvested common stock awards for the three and nine months ended September 30, 2018 and 2017 is presented below:



	Three Months Ended September 30, 2018				Three Months Ended September 30, 2017
Nonvested Common Stock Awards	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Outstanding at July 1,	2,858,278		$	5.28	1,400,260		$	7.10
Granted	123,094		6.79		5,267		3.31
Vested	(25,432	)	7.16		(13,721	)	15.35
Forfeited or expired	(38,292	)	5.34		(550	)	15.15
Outstanding at September 30,	2,917,648		5.33		1,391,256		7.00

	Nine Months Ended September 30, 2018				Nine Months Ended September 30, 2017
Nonvested Common Stock Awards	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Outstanding at January 1,	1,394,868		$	7.00	1,169,099		$	9.33
Granted	1,140,542		5.60		782,511		5.99
Modified ⁽¹⁾	1,146,305		4.84		—		—
Vested	(693,364	)	8.24		(508,613	)	10.71
Forfeited or expired	(70,703	)	5.98		(51,741	)	7.87
Outstanding at September 30,	2,917,648		5.33		1,391,256		7.00


(1)	Due to the closing of the Merger, the 2016 and 2017 Performance Cash Programs were converted from nonvested performance-based cash units to nonvested common stock awards, resulting in an increase of nonvested common stock awards for the nine months ended September 30, 2018.

A summary of the Company's nonvested common stock unit awards for the three and nine months ended September 30, 2018 and 2017 is presented below:



	Three Months Ended September 30, 2018				Three Months Ended September 30, 2017
Nonvested Common Stock Unit Awards	Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value
Outstanding at July 1,	302,417		$	7.37	272,559		$	6.37
Granted	18,695		4.88		3,787		4.29
Vested	(18,695	)	4.88		(3,787	)	4.29
Outstanding at September 30,	302,417		7.37		272,559		6.37

	Nine Months Ended September 30, 2018				Nine Months Ended September 30, 2017
Nonvested Common Stock Unit Awards	Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value
Outstanding at January 1,	272,559		$	6.37	147,167		$	10.09
Granted	180,778		6.63		190,711		3.53
Vested	(150,920	)	4.66		(65,319	)	6.49
Outstanding at September 30,	302,417		7.37		272,559		6.37

A summary of the Company's nonvested performance-based cash unit awards for the three and nine months ended September 30, 2018 and 2017 is presented below:



	Three Months Ended September 30, 2018				Three Months Ended September 30, 2017
Nonvested Performance-Based Cash Unit Awards	Units		Weighted Average Fair Value		Units		Weighted Average Fair Value
Outstanding at July 1,	846,256				1,537,198
Granted	89,037				5,267
Forfeited or expired	(16,232	)			—
Outstanding at September 30,	919,061		$	4.88	1,542,465		$	4.29

	Nine Months Ended September 30, 2018				Nine Months Ended September 30, 2017
Nonvested Performance-Based Cash Unit Awards	Units		Weighted Average Fair Value		Units		Weighted Average Fair Value
Outstanding at January 1,	1,548,083				942,326
Granted	935,293				663,425
Performance goal adjustment ⁽¹⁾	11,289				—
Modified ⁽²⁾	(1,211,478	)			—
Vested	(286,652	)			—
Forfeited or expired	(77,474	)			(63,286	)
Outstanding at September 30,	919,061		$	4.88	1,542,465		$	4.29


(1)	The 2015 Program vested at 104.1% in excess of target level and resulted in additional units vested in March 2018. These units are included in the vested line item for the nine months ended September 30, 2018.

(2)

Due to the closing of the Merger, the 2016 and 2017 Performance Cash Programs were converted from nonvested performance-based cash units to nonvested common stock awards, resulting in a decrease in nonvested performance-based cash units for the nine months ended September 30, 2018. The 2016 Program converted based on its performance through March 19, 2018, which resulted in 89% of the units converting to nonvested common stock awards or a reduction of 65,173 units converting to nonvested common stock awards.

Performance Cash Program

2018 Program. In February 2018, the Compensation Committee of the Board of Directors of the Company approved a performance cash program (the "2018 Program") granting performance cash units that will settle in cash and are accounted for as liability awards. The performance-based awards contingently vest in February 2021, depending on the level at which the performance goal is achieved. The performance goal, which will be measured over the three-year period ending December 31, 2020, will be the Company's total shareholder return ("TSR") based on a matrix measurement of (1) the Company's absolute performance and (2) the Company's ranking relative to a defined peer group's individual TSRs ("Relative TSR"). The Company's absolute performance is measured against the December 29, 2017 closing share price of $5.13. If the Company's absolute performance is lower than the $5.13 share price, the payout is zero for this portion. If the Company's absolute performance is greater than the $5.13 share price, the performance cash units will vest 1% for each 1% in growth, up to 150% of the original grant. If the Company's Relative TSR is less than the median, the payout is zero for this portion. If the Company's Relative TSR is above the median, the payout is equal to the Company's percentile rank above the median, up to 50% of the original grant. The Company's combined absolute performance and Relative TSR have a maximum vest of up to 200% of the original grant.

2017 Program. In February 2017, the Compensation Committee approved a performance cash program (the "2017 Program") granting performance cash units that would settle in cash and were accounted for as liability awards. In March 2018, upon the Merger closing, each award under the 2017 Program was converted to a nonvested common stock award at 100% of the original award. At the time of the modification, 619,006 units were converted to 619,006 nonvested shares of the Company's common stock. These awards no longer have a performance criterion, but continue to have a service-based criterion through the cliff vest in February 2020. The conversion of the performance-based liability award to a service-based equity award was accounted for as a modification in accordance with ASC 718, Compensation - Stock Compensation. The Company recorded an increase to additional paid-in capital ("APIC") and a decrease to derivative and other noncurrent liabilities of $0.9 million as of September 30, 2018 in the Unaudited Consolidated Statement of Stockholders' Equity and the Unaudited Consolidated Balance Sheets, respectively.

2016 Program. In March 2016, the Compensation Committee approved a performance cash program (the "2016 Program") granting performance cash units that would settle in cash and were accounted for as liability awards. In March 2018, upon the Merger closing, each award under the 2016 Program was converted to a nonvested common stock award at 89% of the original award based on the Company's performance through March 19, 2018. At the time of the modification, 592,472 units were converted to 527,299 nonvested shares of the Company's common stock. These awards no longer have a performance criterion, but continue to have a service-based criterion through the cliff vest in February 2019. The conversion of the performance-based liability award to a service-based equity award was accounted for as a modification in accordance with ASC 718, Compensation - Stock Compensation. The Company recorded an increase to APIC and a decrease to derivative and other noncurrent liabilities of $1.8 million as of September 30, 2018 in the Unaudited Consolidated Statement of Stockholders' Equity and the Unaudited Consolidated Balance Sheets, respectively.

2015 Program. In February 2015, the Compensation Committee approved a performance cash program (the "2015 Program") granting performance cash units that would settle in cash and were accounted for as liability awards. The performance-based awards were to contingently vest in May 2018, depending on the level at which the performance goals were achieved. The performance goals, which were measured over the three year period ending December 31, 2017, consisted of the TSR compared to Relative TSR (weighted at 60%) and the percentage change in discretionary cash flow per debt adjusted share relative to a defined peer group's percentage calculation ("DCF per Debt Adjusted Share") (weighted at 40%). The Relative TSR and DCF per Debt Adjusted Share goals would vest at 25% or 50%, respectively, of the total award for performance met at the threshold level, 100% at the target level and 200% at the stretch level. If the actual results for a metric were between the threshold and target levels or between the target and stretch levels, the vested number of units would be prorated based on the actual results compared to the threshold, target and stretch goals. If the threshold metrics were not met, no units would vest. In any event, the total number of units that could vest would not exceed 200% of the original number of performance cash units granted. At the end of the three year vesting period, any units that had not vested would be forfeited. A total of 422,345 units were granted under this program during the year ended December 31, 2015. All compensation expense related to the TSR metric would be recognized if the requisite service period was fulfilled, even if the market condition was not achieved. All compensation expense related to the DCF per Debt Adjusted Share metric would be based on the number of shares expected to vest at the end of the three year period. The Company modified the vesting date of these awards from May 2018 to March 2018. Based upon the Company's performance through 2017, 104.1% or 286,652 units of the 2015 Program vested in March 2018.