Stock-Based Compensation

12 Months Ended

Dec. 31, 2024

12. STOCK-BASED COMPENSATION

Stockholders of the Company approved the 2016 Equity Incentive Plan (the “2016 Plan”) at the 2016 annual meeting of stockholders. The 2016 Plan was amended and restated at the Company’s 2024 annual meeting of stockholders. The 2016 Plan will expire in June 2034. The 2016 Plan provides for the grant of awards to eligible individuals in the form of stock, restricted stock, stock options, performance units or other stock-based awards, all as defined in the 2016 Plan. The 2016 Plan provides for the issuance of up to 5,930,400 shares of common stock to eligible individuals, including directors, through the various forms of permitted awards. The Company is not permitted to issue stock options at an exercise price lower than fair market value at the date of grant. All stock options are required to have an exercise period not to exceed ten years. As of December 31, 2024, the Company has granted 3,556,889 performance stock units (“PSUs”), restricted stock units (“RSUs”) and stock options under the 2016 Plan. Any committee as delegated by the board of directors has the power and discretion to, among other things, prescribe the terms and conditions for the exercise of, or modification of, any outstanding awards in the event of merger, acquisition or any other form of acquisition other than a reorganization of the Company under the United States Bankruptcy Code or liquidation of the Company. The 2016 Plan also allows limited transferability of any stock options to legal entities that are 100% owned or controlled by the optionee or to the optionee’s family trust.

PSUs

The PSUs vest subject to market and performance conditions. The conditions are weighted 25% based on market conditions and 75% based on performance conditions. Market conditions are based on the Company’s total shareholder return (“TSR”) relative to a select group of peer companies at the end of a three year performance period. Performance conditions are based on the Company’s actual Adjusted EBITDAR over the three year performance period compared to forecasted Adjusted EBITDAR over the same period. Depending on the TSR and Adjusted EBITDAR at the end of the performance period, anywhere from 0% to 200% of the target grant may vest. Expense is recognized on a straight-line basis over the performance period beginning on the date of grant. Probability is assessed quarterly on the performance conditions and compensation expense is adjusted accordingly. Actual forfeitures are recognized as they occur.

Activity in the Company’s stock-based compensation plan for the PSUs was as follows:


	Target PSUs		Weighted-Average Grant-Date Fair Value
Nonvested at January 1, 2022	815,164	$	5.51
Granted	420,989		10.22
Vested	(227,510)		9.17
Forfeited	(21,481)		6.14
Nonvested at December 31, 2022	987,162	$	6.66
Granted	473,157		9.04
Vested	(302,988)		3.28
Forfeited	(100,995)		5.14
Nonvested at December 31, 2023	1,056,336	$	8.84
Granted	508,382		1.81
Vested	(196,844)		4.52
Forfeited	(100,060)		9.76
Nonvested at December 31, 2024	1,267,814	$	6.62

At December 31, 2024, there was a total of $1.1 million of total unrecognized compensation expense related to the PSUs. The cost is expected to be recognized over a weighted-average period of 1.5 years. The PSUs granted during 2022 will vest in March 2025.

The fair value of the PSUs granted is estimated on the date of grant using the Monte Carlo model with the following assumptions:


Assumptions for PSU Awards
	2024	2023	2022
Risk-free interest rate	4.57%	4.09%	2.47%
Expected life	2.5 years	2.9 years	2.8 years
Expected volatility	56.2%	91.8%	91.0%
Expected dividends	$0	$0	$0
Forfeiture rate	0%	0%	0%

Stock Options

Activity related to options in the Company’s stock-based compensation plans for employee stock options was as follows:


	Option Shares		Weighted-Average Exercise Price	Weighted-Average Remaining Contractual Term ⁽¹⁾	Options Exercisable		Weighted-Average Exercise Price
Outstanding at January 1, 2024	1,050,000	$	5.59	9.46	285,000	$	5.55
Expired	(30,000)		5.05
Outstanding at December 31, 2024	1,020,000	$	5.61	8.70	510,000	$	5.61

(1)In years

The following table summarizes information about employee stock options outstanding and exercisable at December 31, 2024:


Dollar amounts in thousands	Options Outstanding	Options Exercisable		Intrinsic Value of Options Outstanding		Intrinsic Value of Options Exercisable	Weighted-Average Life of Options Outstanding ⁽¹⁾	Weighted-Average Life of Options Exercisable ‎⁽¹⁾
Exercise Price:
$5.61	1,020,000	510,000		—		—	8.7	8.7
	1,020,000	510,000	$	—	$	—	8.7	8.7

⁽¹⁾ In years

The aggregate intrinsic value represents the difference between the Company’s closing stock price of $3.24 per share as of December 31, 2024 and the exercise price multiplied by the number of options outstanding or exercisable as of that date. At December 31, 2024, there was a total of $0.8 million of unrecognized compensation expense related to employee stock options. The cost is expected to be recognized over a weighted-average period of 1.7 years.

Assumptions for Employee Stock Options


	2023
Risk-free interest rate	4.27%
Expected life	6.8 years
Expected volatility	58.1%
Expected dividend	0%
Forfeiture rate	0

In September 2023, employees with options expiring in December 2024 were given the option to cancel their existing $5.05 stock options and exchange them for $5.61 stock options expiring in September 2033. Six employees exchanged their stock options. The exchange increased compensation expense related to employee stock options by $0.6 million for the year ended December 31, 2023. No employee stock options were exchanged or issued during the years ended December 31, 2024 and 2022.

Director Equity

The Company’s outside directors were issued 4,071 RSUs with a grant date fair value of $7.37 per share during 2023. The RSUs vested in March 2024. There were no RSUs or options issued to directors of the Company during 2024. As of December 31, 2024,

there were 75,000 options outstanding to independent directors of the Company with a weighted-average exercise price of $7.77 per share. At December 31, 2024, there was no unrecognized compensation expense related to directors’ RSUs and options.

Additional Stock Information

The following table includes additional information related to exercises of stock options:


	For the year ended December 31,
Amounts in thousands	2024		2023		2022
Intrinsic value of share-based awards exercised	$	—	$	15	$	183

Stock-based compensation expense was recognized in general and administrative expenses on the Company’s consolidated statements of (loss) earnings as follows:


	For the year ended December 31,
Amounts in thousands	2024		2023		2022
Compensation expense:
2016 Plan	$	66	$	3,610	$	3,335