15. Share-Based Compensation and Equity

Share-Based Compensation

Upon the consummation of the Merger, the Company assumed and adopted the Nationstar Mortgage Holdings Inc. Second Amended and Restated 2012 Incentive Compensation Plan (“2012 Plan”), as may be amended, that offers share-based awards to certain key employees of the Company, consultants, and non-employee directors. Additionally, on May 16, 2019, the Company’s stockholders approved the Mr. Cooper Group Inc. 2019 Omnibus Incentive Plan (the “2019 Plan”), which had previously been approved by the Company’s Board of Directors.

The equity-based awards under the 2012 Plan and the 2019 Plan include restricted stock units (“RSUs”) granted to employees of the Company, consultants, and non-employee directors. These awards are valued at the fair market value of the Company’s or the Predecessor’s common stock on the grant date as defined in the 2012 Plan and the 2019 Plan. The stock awards for employees generally vest in equal installments on each of the first three anniversaries of the awards, provided that (i) the participant remains continuously employed with the Company during that time or (ii) the participant’s employment has terminated by reason of retirement. The stock awards for non-employee directors generally vest the earlier of (a) the first anniversary of the grant date or (b) the date of the next annual stockholders meeting following the grant date. In addition, upon death or disability, the unvested shares of an award will vest. Any forfeiture of restricted stock awards before vesting has been achieved, results in a reduction in the balance of outstanding common shares.

The following table summarizes the Company’s share-based awards:



	Successor
	Shares (or Units) (in thousands)		Weighted-Average Grant Date Fair Value, per Share (or Unit)
Equity awards outstanding as of December 31, 2018	3,473		$	15.53
Granted	2,525		12.44
Vested	(436	)	16.73
Forfeited	(327	)	14.61
Equity awards outstanding as of December 31, 2019	5,235		14.00

The Company recorded $18 and $2 of expenses related to share-based awards during the year ended December 31, 2019 and the five months ended December 31, 2018, respectively. The Predecessor recorded $17 of expenses related to share-based awards during the seven months ended July 31, 2018, including $7 expenses recognized due to a one-time accelerated vesting of equity awards in connection with the Merger. In addition, the Predecessor recorded $17 of expenses related to share-based awards during the year ended December 31, 2017. As of December 31, 2019, unrecognized compensation expense totaled $55 related to non-vested stock award payments that are expected to be recognized over a weighted average period of 1.55 years.

The Company is eligible to receive a tax benefit when the vesting date fair value of an award exceeds the value used to recognize compensation expense at the date of grant. The excess tax benefits recognized by the Company and the Predecessor are not material.

As of December 31, 2019, approximately 80 thousand Xome stock appreciation rights (“SARs”) were outstanding and can be settled in cash or units of Xome Holdings LLC (at the election of Xome). The SARs generally vest over three years and have a ten-year term. The SARs become exercisable and are recognized to expense upon a liquidity event at Xome which includes a change in control or an initial public offering of Xome. No expense was recorded for outstanding SARs in 2019, 2018 and 2017 as a liquidity event has not occurred.