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Compensation Plans
 9 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Compensation Plans
Note 10 - Compensation Plans
The Company may grant various types of both short-term and long-term incentive-based awards under its compensation plans, such as cash awards, performance-based cash awards, and equity awards to eligible employees. Additionally, the Company grants stock-based compensation to its Board of Directors and provides an employee stock purchase plan. As of September 30, 2023, approximately 2.8 million shares of common stock were available for grant under the Company’s Equity Incentive Compensation Plan (“Equity Plan”).
Performance Share Units
The Company has granted PSUs to eligible employees as part of its Equity Plan. The number of shares of the Company’s common stock issued to settle PSUs ranges from zero to two times the number of PSUs awarded and is determined based on certain criteria over a three-year performance period. PSUs generally vest on the third anniversary of the date of the grant or upon other triggering events as set forth in the Equity Plan.
For PSUs granted in 2022 and 2023, which the Company determined to be equity awards, settlement will be determined based on a combination of the following criteria measured over the three-year performance period: the Company’s Total Shareholder Return (“TSR”) relative to the TSR of certain peer companies, the Company’s absolute TSR, free cash flow (“FCF”) generation, and the achievement of certain ESG targets, in each case as defined by the award agreement. The Company initially records compensation expense associated with the issuance of PSUs based on the fair value of the awards as of the grant date. As a portion of these awards depends on performance-based settlement criteria, compensation expense may be adjusted in future periods as the expected number of shares of the Company’s common stock issued to settle the units increases or decreases based on the Company’s expected FCF generation and achievement of certain ESG targets. During the nine months ended September 30, 2023, the Company granted a total of 256,633 PSUs with a grant date fair value of $7.7 million.
Compensation expense for PSUs is recognized within general and administrative expense and exploration expense over the vesting periods of the respective awards. Total compensation expense recorded for PSUs was $1.0 million and $0.6 million for the three months ended September 30, 2023, and 2022, respectively, and $1.8 million and $2.0 million for the nine months ended September 30, 2023, and 2022, respectively. As of September 30, 2023, there was $9.9 million of total unrecognized compensation expense related to non-vested PSUs, which is being amortized through mid-2026.
A summary of activity during the nine months ended September 30, 2023, is presented in the following table:
PSUs (1)
Weighted-Average
Grant-Date Fair Value (2)
Non-vested at beginning of year273,258$26.67 
Granted256,633$29.93 
Vested—$— 
Forfeited(31,918)$25.99 
Non-vested at end of quarter497,973$27.75 
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(1)    The number of shares of common stock assumes a multiplier of one. The actual final number of shares of common stock to be issued will range from zero to two times the number of PSUs awarded depending on the three-year performance multiplier.
(2)    Amounts represent price per unit.
Restricted Stock Units
The Company has granted RSUs to eligible employees as part of its Equity Plan. Each RSU represents a right to receive one share of the Company’s common stock upon settlement of the award at the end of the specified vesting period. RSUs generally vest in one-third increments on each anniversary date of the grant over the applicable vesting period or upon other triggering events as set forth in the Equity Plan.
The Company records compensation expense associated with the issuance of RSUs based on the fair value of the awards as of the date of grant. The fair value of an RSU is equal to the closing price of the Company’s common stock on the date of the grant. Compensation expense for RSUs is recognized within general and administrative expense and exploration expense over the vesting periods of the respective awards. During the nine months ended September 30, 2023, the Company granted to employees a total of 620,420 RSUs with a grant date fair value of $19.8 million, and the Company settled RSUs upon vesting of awards granted in previous years. The Company and a majority of eligible recipients mutually agreed to net share settle a portion of the awards to cover income and payroll tax withholdings, as provided for in the Equity Plan and applicable award agreements. After withholding 249,233 shares to satisfy income and payroll tax withholding obligations, the Company issued 554,216 shares of common stock in accordance with the terms of the applicable award agreements during the nine months ended September 30, 2023.
Total compensation expense recorded for RSUs was $4.1 million and $3.5 million for the three months ended September 30, 2023, and 2022, respectively, and $10.8 million and $10.0 million for the nine months ended September 30, 2023, and 2022, respectively. As of September 30, 2023, there was $30.0 million of total unrecognized compensation expense related to non-vested RSUs, which is being amortized through mid-2026.
A summary of activity during the nine months ended September 30, 2023, is presented in the following table:
RSUs
Weighted-Average Grant-Date Fair Value (1)
Non-vested at beginning of year1,375,052$22.42 
Granted620,420$31.92 
Vested(803,449)$16.72 
Forfeited(98,766)$28.86 
Non-vested at end of quarter1,093,257$31.42 
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(1)    Amounts represent price per unit.
Director Shares
During the nine months ended September 30, 2023, and 2022, the Company issued a total of 56,872 and 29,471 shares, respectively, of its common stock as compensation to its non-employee directors under the Equity Plan. Shares issued during 2023 will fully vest on December 31, 2023, and shares issued during 2022 fully vested on December 31, 2022.
Employee Stock Purchase Plan
Under the Company’s Employee Stock Purchase Plan (“ESPP”), eligible employees may purchase shares of the Company’s common stock through payroll deductions of up to 15 percent of eligible compensation, subject to a maximum of 2,500 shares per offering period and a maximum of $25,000 in value related to purchases for each calendar year. The purchase price of the common stock is 85 percent of the lower of the trading price of the common stock on either the first or last day of the six-month offering period. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. There were a total of 68,192 and 65,634 shares issued under the ESPP during the nine months ended September 30, 2023, and 2022, respectively. Total proceeds to the Company for the issuance of these shares was $1.8 million and $1.6 million for the nine months ended September 30, 2023, and 2022, respectively. The fair value of ESPP grants is measured at the date of grant using the Black-Scholes option-pricing model.
Please refer to Note 7 - Compensation Plans in the 2022 Form 10-K for additional detail on the Company’s compensation plans.