|12 Months Ended|
Dec. 31, 2020
|Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]|
Common Stock — Common stockholders are entitled to vote on all matters submitted to a vote of the Company’s stockholders. Subject to the rights of holders of any then outstanding shares of the Company’s preferred stock, the Company’s common stockholders are entitled to dividends declared by the board of directors. The shares of the Company’s common stock are not subject to any redemption provisions. The Company has no issued and outstanding shares of preferred stock.
The Company’s ability to pay dividends is effectively limited by its status as a holding company and the terms of its subsidiary’s indentures and senior secured credit facility, which also significantly restricts the ability of certain of the Company’s subsidiaries to pay dividends directly or indirectly to the Company. See Note 13 for discussion of restrictions contained within the debt agreements of the Company’s subsidiaries.
Treasury Stock — Treasury stock represents shares of common stock repurchased by the Company and not yet retired. The Company has applied the cost method in recording its treasury shares.
Below is a summary of the Company’s treasury stock activity for the years ended December 31, 2018, 2019 and 2020.
As of December 31, 2020, the Company had no plans to retire any shares of its treasury stock.
Restricted Stock — Below is a summary of restricted stock activity for the years ended December 31, 2018, 2019 and 2020:
During the year ended December 31, 2020, the Company granted 1,555,361 shares of restricted stock to directors and employees of the Company. The fair value of the restricted stock granted was determined based on the market value of the Company’s common stock on the dates of grant, which ranged from $8.39 to $32.12 per share. The Company assumed forfeiture rates ranging from 0% to 10% for the restricted stock awards. Restricted stock granted to directors vests over aperiod. Restricted stock grants of 300,891 shares to employees vested immediately on the date of grant, while the remaining grants to employees vest over periods ranging from one year to four years based on continued service. The recipients of restricted stock are entitled to receive dividends and to vote their respective shares, however, the sale and transfer of the restricted shares is prohibited during the restriction period.
Impact of 2020 Restructuring Plan - As part of the Company’s employee-related restructuring actions discussed in Note 3, the vesting period for certain share based awards was accelerated on a pro-rata basis based upon the grant dates and each employee’s separation date. The Company considers the accelerated vest of these awards to be a modification under ASC Topic 718 Stock Compensation. Based on the terms of the severance agreements, the
Company estimated the number of awards expected to vest at each employee’s expected separation date and revalued such awards based on the modification date, or the date on which employees were notified of the 2020 Restructuring Plan. The modification date fair value per share was $15.95. The Company recorded incremental compensation expense of approximately $521 related to these modifications, which is reflected in restructuring costs on the Company’s condensed consolidated income statement.
During December 2020, in recognition of its employees’ dedication and hard work during the year ended December 31, 2020 amid the prolonged impacts of the COVID-19 pandemic, the Company accelerated the vest of certain restricted stock and restricted stock unit awards that would have otherwise vested during 2021. A total of 191,983 shares of restricted stock and 87,911 restricted stock units vested on December 15, 2020.
Below is a summary of restricted stock award activity recorded for the periods indicated.
As of December 31, 2020, the remaining unrecognized compensation expense related to these restricted stock awards was approximately $20,183. The weighted average period over which this remaining compensation expense will be recognized is approximately two years.
Restricted Stock Units — During the years ended December 31, 2018, 2019 and 2020, the Company granted restricted stock units representing 228,194, 306,651 and 436,681 hypothetical shares of common stock, respectively, to employees. The restricted stock units vest based on a combination of financial performance factors and continued service. The financial performance factors are based on an implied equity value concept that determines an internal rate of return (“IRR”) for a two year measurement period, as defined in the award agreement, based on a formula utilizing a multiple of Adjusted EBITDA subject to certain specified adjustments (as defined in the restricted stock unit award agreement). The financial performance factors for the restricted stock units have a threshold, target and maximum level of payment opportunity and vest on a prorata basis according to the IRR achieved by the Company during the performance period. As an example, if the Company achieves an IRR equal to 9.0% for the 2017 grant, the number of restricted stock units that shall vest will be greater than the target but less than the maximum number that would have vested had the Company achieved the highest IRR. All payouts of restricted stock units that vest will be subject to an additional service requirement and will be paid in the form of common stock if the participant continues to provide services through the fourth anniversary of the grant date.
At the time of each of the restricted stock unit grants, the Company assumes the IRR level to be reached for the defined measurement period will be the target IRR level in determining the amount of compensation expense to record for such grants. If and when additional information becomes available to indicate that something other than the target IRR level will be achieved, the Company adjusts compensation expense on a prospective basis over the remaining service period. The Company assumed forfeiture rates ranging from 0% to 5% for the restricted stock unit awards granted during 2018, 2019 and 2020. Restricted stock unit award participants are eligible to receive dividend equivalent payments if and at the time the restricted stock unit awards vest.
Below is a table summarizing the potential number of units that could vest under restricted stock unit awards granted during the years ended December 31, 2018, 2019 and 2020 at each of the three levels of financial performance (excluding forfeitures):
The current financial performance factors and respective vesting rates for each of the 2018, 2019 and 2020 grants are as follows:
Below is a summary of activity for restricted stock unit awards for the periods indicated:
During the year ended December 31, 2019, the Company modified the performance target levels for the restricted stock unit awards granted during February 2017 and February 2018 for all participants other than certain executive officers. The modification adjusted the threshold, target and maximum IRR levels from 7.0%, 9.5% and 13.0%, respectively, to 6.0%, 8.0% and 14.0%, respectively. The Company accounted for the change in performance measures as modifications of each award, and recorded a reduction to compensation expense of $132 at the time of the modification. Simultaneous with the modification of the restricted stock unit awards granted during February 2017, the Company determined that the final IRR reached for the respective measurement period was 9.3%, which resulted in a reduction in compensation expense of approximately $563.
As of December 31, 2020, the Company had restricted stock units outstanding that represented a total 890,680 hypothetical shares of common stock.
As of December 31, 2020, the remaining unrecognized compensation expense related to the outstanding restricted stock unit awards was $11,849, which reflects an IRR level of 9.3% that was achieved for the 2017 grant and an IRR level of 8.0% that is estimated for the 2018, 2019 and 2020 grants. The weighted average period over which this remaining compensation expense will be recognized is approximately two years.
The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP).
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef