Stock-Based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

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 its existing common shares, including shares of its restricted stock, will be cancelled in its Chapter 11 proceedings and entitled to no recovery.

For restricted stock awards and stock options, we had:

	Three Months Ended
	March 31,
	2020		2019
	(In millions)
Recognized stock compensation expense	$	2.5	$	3.8
Capitalized stock compensation cost for our oil and natural gas properties	—		0.6
Tax benefit on stock-based compensation	0.6		0.9

The remaining unrecognized compensation cost related to unvested awards at March 31, 2020 is approximately $8.2 million. The weighted average period over which this cost will be recognized is 1.3 of a year.

Our Second Amended and Restated Unit Corporation Stock and Incentive Compensation Plan effective May 6, 2015 (the amended plan) allows us to grant stock-based and cash-based compensation to our employees (including employees of subsidiaries) and to non-employee directors. There are 7,230,000 shares of the company's common stock authorized for issuance to eligible participants under the amended plan with 2,000,000 shares being the maximum number of shares that can be issued as "incentive stock options."

We did not grant any stock options during either of the three month periods ending March 31, 2020 or 2019. We did not grant any restricted stock awards during the three-month periods ending March 31, 2020. This table shows the fair value of restricted stock awards granted to employees and non-employee directors during the three months ended March 31, 2019:

	Three Months Ended
	March 31, 2019
	Time Vested			Performance Vested
Shares granted:
Employees	925,673			424,070
Non-employee directors	—			—
	925,673			424,070
Estimated fair value (in millions): (1)
Employees	$	14.6		$	7.1
Non-employee directors	—			—
	$	14.6		$	7.1
Percentage of shares granted expected to be distributed:
Employees	95		%	64		%
Non-employee directors	N/A			N/A

_______________________

1.The performance shares represent 100% of the grant date fair value. (We recognize the grant date fair value minus estimated forfeitures.)

The time vested restricted stock awards granted during the first three months of 2019 are being recognized over a three-year vesting period. During the first quarter of 2019, two performance vested restricted stock awards were granted to certain executive officers. The first cliff vests three years from the grant date based on the company's achievement of certain stock performance measures (TSR) at the end of the term and will range from 0% to 200% of the restricted shares granted as performance shares. The second vests, one-third each year, over a three-year vesting period subject to the company's achievement of cash flow to total assets (CFTA) performance measurement each year and will range from 0% to 200%. Based on a probability assessment of the selected TSR performance criteria at March 31, 2020, the participants are estimated to receive 2% of the 2019 and 29% of the 2018 performance-based shares. We expense the CFTA performance award at target or 100%.