Stock-Based Compensation

3 Months Ended

Mar. 31, 2016

8.Stock-Based Compensation

Description of plan

The Company’s 2014 LTIP includes non-statutory options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, dividend equivalents, and other stock-based awards which may be granted to employees, directors and consultants of the Company. The aggregate number of shares of common stock that the Company may issue under the 2014 LTIP may not exceed 40 million shares. As of March 31, 2016, the Company had 4.4 million shares available for issuance under the 2014 LTIP.

Restricted stock

The following table summarizes the restricted stock activity in the 2014 LTIP for the year ended March 31, 2016.


	Restricted Stock Awards
	Weighted
				Number of Shares
		Weighted Average		Remaining Available
	Number of	Grant Date Fair		for Future Issuance
	Shares	Value		under 2014 LTIP
Unvested at December 31, 2015	10,099,291	$	0.33		4,301,665
Awarded	—		—		—
Vested	(1,064,331)		0.32		—
Forfeited	(100,318)		0.34		100,318
Unvested at March 31, 2016	8,934,642		0.33		4,401,983

The grant date fair value of restricted stock is determined by averaging the high and low stock price of a share of Sabine common stock as published by the OTC Bulletin Board on the date of grant. Of the unvested restricted stock as of March 31, 2016, 8,019,175 shares vest as follows: (i) two-thirds will vest in one-fourth increments on each of the first four anniversaries of the date of grant and (ii) one-third will vest in full on the fourth anniversary of the date of grant; 465,467 shares vest ratably over three years and 450,000 shares vest ratably over four years. Restricted stock may vest earlier upon a qualifying disability, death, certain involuntary terminations, or a change in control of the Company in accordance with the terms of the underlying agreement.

The Company has a significant amount of indebtedness that is senior to its existing common stock in its capital structure. As a result, the Company believes that it is highly likely that the shares of its existing restricted stock will be cancelled in its Chapter 11 proceedings and will be entitled to a limited recovery, if any.

Compensation costs

During the three months ended March 31, 2016 and 2015, the Company recognized approximately $0.6 million, and $0.4 million, respectively, in stock based compensation expense which is included in General and Administrative expense in the Condensed Consolidated Statement of Operations.