Stock-Based Compensation

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

On the Effective Date, the Board adopted the Unit Corporation Long Term Incentive Plan (LTIP) to incentivize employees, officers, directors and other service providers of the company and its affiliates. The LTIP provides for the grant, from time to time, at the discretion of the Board or a committee thereof, of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, dividend equivalents, other stock-based awards, cash awards, performance awards, substitute awards or any combination of the foregoing. Subject to adjustment in the event of certain transactions or changes of capitalization in accordance with the LTIP, 903,226 shares of new common stock of the reorganized company (New Common Stock) have been reserved for issuance pursuant to awards under the LTIP. New Common Stock subject to an award that expires or is canceled, forfeited, exchanged, settled in cash, or otherwise terminated without delivery of shares and shares withheld to pay the exercise price of, or to satisfy the withholding obligations with respect to, an award will again be available for delivery pursuant to other awards under the LTIP. The LTIP will be administered by the Board or a committee thereof.

No shares under the LTIP have been awarded since the Effective Date through December 31, 2020.

Also on the Effective Date, the company's equity-based awards outstanding immediately before the Effective Date were cancelled. The cancellation of the awards resulted in an acceleration of unrecorded stock compensation expense during the Predecessor Period. Under the Plan, the company issued Warrants to holders of those equity-based awards that were outstanding immediately before the Effective Date who did not opt out of releases under the Plan. For further information, see Note 2 – Emergence From Voluntary Reorganization Under Chapter 11.

For restricted stock awards, we had:

	Predecessor
	Period January 1, 2020 through August 31, 2020		For the Year Ended December 31, 2019
	(In millions)
Recognized stock compensation expense (1)	$	6.1	$	12.8
Capitalized stock compensation cost for our oil and natural gas properties	$	—	$	2.4
Tax benefit on stock-based compensation	$	1.5	$	3.1

_______________________

1.When the company's equity-based awards were cancelled on the Effective Date, we immediately recognized the expense for the cancelled awards of $1.4 million as reorganization costs, net.

The Second Amended and Restated Unit Corporation Stock and Incentive Compensation Plan effective May 6, 2015 (the amended plan) allowed us to grant stock-based and cash-based compensation to our employees (including employees of subsidiaries) and to non-employee directors. There were 7,230,000 shares of the company's common stock authorized for issuance to eligible participants under the amended plan with 2.0 million shares being the maximum number of shares that could be issued as “incentive stock options.” The amended plan was terminated under the Plan.

Restricted Stock

Activity pertaining to restricted stock awards granted under the amended plan is as follows:

Employees	Number of Time Vested Shares	Number of Performance Vested Shares	Total Number of Shares	Weighted Average Price
Nonvested at January 1, 2019 (Predecessor)	1,268,883	608,125	1,877,008	$	19.70
Granted	927,173	500,256	1,427,429	16.09
Vested	(570,107)	(233,835)	(803,942)	15.56
Forfeited	(98,301)	(33,172)	(131,473)	19.36
Nonvested at December 31, 2019 (Predecessor)	1,527,648	841,374	2,369,022	$	18.95
Granted	—	—	—	—
Vested	(677,076)	—	(677,076)	19.95
Forfeited	(272,396)	(503,809)	(776,205)	19.28
Nonvested at August 31, 2020 (Predecessor)	578,176	337,565	915,741	$	17.92
Cancelled	(578,176)	(337,565)	(915,741)	17.92
Nonvested at September 1, 2020 (Successor)	—	—	—	$	—

Non-Employee Directors	Number of Shares	Weighted Average Price
Nonvested at January 1, 2019 (Predecessor)	107,045	$	17.07
Granted	72,784	12.09
Vested	(61,141)	15.49
Forfeited	—	—
Nonvested at December 31, 2019 (Predecessor)	118,688	$	14.83
Granted	—	—
Vested	(48,475)	15.88
Forfeited	—	—
Nonvested at August 31, 2020 (Predecessor)	70,213	$	14.10
Cancelled	(70,213)	14.10
Nonvested at September 1, 2020 (Successor)	—	$	—

The time vested restricted stock awards granted were being recognized over a three-year vesting period. There also were performance vested restricted stock awards granted to certain executive officers. All of these awards were cancelled on the Effective Date. We recognized a reversal of expense previously recorded for the unvested awards of $2.2 million for these awards upon cancellation.

The fair value of the restricted stock granted in 2019 at the grant date was $22.6 million.

Non-Employee Directors' Stock Option Plan

Under the Unit Corporation 2000 Non-Employee Directors’ Stock Option Plan, on the first business day following each annual meeting of shareholders, each person who was then a member of our Board of Directors and who was not then an employee of the company or any of its subsidiaries was granted an option to purchase 3,500 shares of common stock. These awards and the plan were cancelled on the Effective Date.

Activity pertaining to the Directors’ Plan is as follows:

	Number of Shares	Weighted Average Exercise Price
Nonvested at January 1, 2019 (Predecessor)	66,500	$	44.42
Granted	—	—
Exercised	—	—
Forfeited	(24,500)	37.31
Nonvested at December 31, 2019 (Predecessor)	42,000	$	48.56
Granted	—	—
Exercised	—	—
Forfeited	(14,000)	41.21
Outstanding at August 31, 2020 (Predecessor)	28,000	$	52.24
Cancelled	(28,000)	52.24
Outstanding at September 1, 2020 (Successor)	—	$	—