For all periods prior to the Spin-Off, employees of the Company participated in Ensign's stock-based compensation plans. The compensation expense recorded by the Company included the expense associated with these employees, as well as an allocation of stock-based compensation of certain Ensign employees who provided general and administrative services on our behalf.

Outstanding options held by employees of the Company under the Ensign stock plans (collectively the “Ensign Plans”) and outstanding options and restricted stock awards under the Company Subsidiary Equity Plan (together with the Ensign Plans the “Pre-Spin Plans”) were modified and replaced with Pennant awards at the Spin-Off date. Additionally, in connection with the Spin-Off, the Company issued new options and restricted stock awards to Pennant and Ensign employees under the 2019 Omnibus Incentive Plan (the “OIP”) and Long-Term Incentive Plan (the “LTIP”, together referred to as the “Pennant Plans”).

Under the Ensign Plans and the Pennant Plans, stock-based payment awards, including employee stock options, restricted stock awards (“RSA”), and restricted stock units (“RSU” and together with RSA, “Restricted Stock”) are issued based on estimated fair value. The following disclosures represent share-based compensation expense relating to the Ensign and Pennant Plans, including awards to employees of the Company’s subsidiaries and an allocation of costs from employees in the Service Center prior to the Spin-Off, and total share-based compensation after the Spin-Off.


	Year Ended December 31,
	2019		2018		2017
Prior to the Spin-Off:
Total share-based compensation	$	1,395	$	2,382	$	2,298

Following the Spin-Off:
Share-based compensation expense related to stock options	315		—		—
Share-based compensation expense related to Restricted Stock	1,589		—		—
Share-based compensation expense related to Restricted Stock to non-employee directors	83		—		—
Total share-based compensation	$	3,382	$	2,382	$	2,298

In future periods, the Company expects to recognize approximately $4,245 and $23,530 in share-based compensation expense for unvested options and unvested Restricted Stock, respectively, which were outstanding as of December 31, 2019. Future share-based compensation expense will be recognized over 4.4 and 3.2 weighted average years for unvested options and restricted stock awards, respectively.

Under the Pennant Plans, options granted to employees of the subsidiaries of Pennant generally vest over five years at 20% per year on the anniversary of the grant date. Options expire ten years after the date of grant.

The Company uses the Black-Scholes option-pricing model to recognize the value of stock-based compensation expense for share-based payment awards under the Plans. Determining the appropriate fair-value model and calculating the fair value of stock-based awards at the grant date requires considerable judgment, including estimating stock price volatility and expected option life. The Company develops estimates based on historical data and market information, which can change significantly over time.

The fair value of each option is estimated on the grant date using a Black-Scholes option-pricing model with the following weighted average assumptions for stock options granted after the Spin-Off:


Grant Year	Options Granted	Risk-Free Interest Rate		Expected Life^(a)	Expected Volatility^(b)		Dividend Yield
2019	667	1.6	%	6.5	34.6	%	—	%

(a) Under the midpoint method, the expected option life is the midpoint between the contractual option life and the average vesting period for the options being granted. This resulted in an expected option life of 6.5 years for the options granted on October 1, 2019.

(b) Because the Company’s equity shares have been traded for a relatively short period of time, expected volatility assumption was based on the volatility of related industry stocks.

For the year ended December 31, 2019, the following represents the exercise price and fair value displayed at grant date for stock option grants:

The weighted average exercise price equaled the weighted average fair value of common stock on the grant date for all options granted during the year ended December 31, 2019 and therefore, the intrinsic value was $0 at date of grant.


	Number of Options Outstanding	Weighted Average Exercise Price		Number of Options Vested	Weighted Average Exercise Price of Options Vested




Converted at Spin-Off on October 1, 2019^(a)	917	$	5.68	586	$	4.73
Granted	667	15.23
Exercised	(7)	4.64
Forfeited	(4)	14.07
December 31, 2019	1,573	$	9.71	607	$	4.80

The aggregate intrinsic value of options outstanding, vested, unvested and exercised as of and for the period ended December 31, 2019 is as follows:

The intrinsic value is calculated as the difference between the market value of the underlying common stock and the exercise price of the options. There were 966 unvested and outstanding options at December 31, 2019. The weighted average contractual life for options outstanding, vested and expected to vest at December 31, 2019 was 7.40 years.

Under the Pennant Plans, the Company granted Restricted Stock to Pennant employees, Ensign employees, and to non-employee directors. All awards were granted at an issued price of $0 and generally vest between three to five years. A summary of the status of Pennant’s non-vested Restricted Stock, and changes during the period ended December 31, 2019, is presented below:


	Non-Vested Restricted Awards	Weighted Average Grant Date Fair Value
Converted at Spin-Off on October 1, 2019^(a)	329	$	11.20
Granted	1,484	15.10
Vested	(19)	10.68
Forfeited	(1)	8.24
December 31, 2019	1,793	$	14.44

During the years ended December 31, 2019 and 2018, the Company repurchased 599 and 865 shares of common stock, respectively, under the Subsidiary Equity Plan for $2,687 and $1,972, respectively. The Company subsequently sold 534 and 865 shares years ended December 31, 2019 and 2018, and received net proceeds of $2,293 and $1,972, respectively. The shares of common stock under the Subsidiary Equity Plan that were repurchased but not sold by the Company were included in the assets transferred by Ensign to Pennant as part of the internal reorganization effected in connection with and as part of the Spin-Off.