Annual report pursuant to Section 13 and 15(d)

RETIREMENT AND LONG-TERM INCENTIVE PLANS

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RETIREMENT AND LONG-TERM INCENTIVE PLANS
 12 Months Ended
Dec. 31, 2018
Share-based Payments and Retirement Disclosure [Abstract]  
RETIREMENT AND LONG-TERM INCENTIVE PLANS
RETIREMENT AND LONG-TERM INCENTIVE PLANS
Defined Contribution Plan
We sponsor a defined contribution plan for eligible employees that is qualified under Section 401(k) of the Internal Revenue Code, which includes voluntary employee pre-tax contributions and a Company matching contribution, with potential additional discretionary contributions determined by the Board of Directors. Effective April 1, 2016, we temporarily suspended our matching contribution in response to the downturn in the oil and gas industry. For 2018, 2017 and 2016, we contributed $0, $0, and $0.7 million, respectively, to the plan.
Long-Term Incentive Plans
Under our long-term incentive plans ("Incentive Plans"), the Compensation Committee of our Board of Directors may grant equity-based awards to eligible employees and non-employee directors, including restricted stock and restricted stock units, stock options and stock-based performance awards. The Compensation Committee determines the number of shares or stock options subject to each award, as well as the terms, conditions, performance measures, and other provisions of the award. A summary of our Incentive Plans, and the number of shares of our common stock that may be issued under each plan, is as follows:

•
Long-Term Incentive Plan (approved on February 13, 1997) - 1,000,000 shares;
•
2002 Long-Term Incentive Plan (approved on April 24, 2002, and amended on April 26, 2006) - 500,000 shares;
•
2011 Stock Incentive Plan (approved on April 28, 2011) - 500,000 shares; and
•
2015 Stock Incentive Plan (approved on April 23,2015) - 1,000,000 shares.

At December 31, 2018, we had 527,357 aggregate shares available for future issuance under our Incentive Plans. We issue new shares through our transfer agent in connection with issuances under the Incentive Plans.

Restricted Stock and Stock Option Awards - Restricted stock awards represent shares of restricted stock and restricted stock units and are subject to transfer restrictions, forfeit provisions and other terms and conditions of the Incentive Plans. Restricted stock awards to our employees generally have a three-year graded vesting period and awards to our non-employee directors vest over a six-month period. The total initial fair value for these awards is determined based upon the closing price of our stock (typically subject to a minimum price) on the date of grant applied to the total number of shares that we anticipate will vest. The fair value is expensed on a straight-line basis over the applicable vesting period.
A summary of activity for our restricted stock awards for 2018, 2017 and 2016 is as follows:
 
Years Ended December 31,
 
2018
 
2017
 
2016
 
Number
of Shares
 
Weighted-
Average
Grant-Date
Fair Value
Per  Share
 
Number
of Shares
 
Weighted-
Average
Grant-Date
Fair Value
Per  Share
 
Number
of Shares
 
Weighted-
Average
Grant-Date
Fair Value
Per  Share
Restricted shares, beginning of period
445,126

 
$
12.83

 
370,565

 
$
12.99

 
262,964

 
$
18.33

Granted
440,185

 
11.16

 
383,121

 
13.02

 
259,699

 
8.55

Vested
(250,219
)
 
10.93

 
(215,478
)
 
12.52

 
(114,804
)
 
14.37

Forfeited
(108,654
)
 
12.01

 
(93,082
)
 
12.53

 
(37,294
)
 
15.48

Restricted shares, end of period
526,438

 
11.56

 
445,126

 
12.83

 
370,565

 
12.99


Compensation expense for our restricted stock awards was $2.8 million, $2.7 million and $3.1 million for 2018, 2017 and 2016, respectively. The total income tax benefit (expense) recognized for our share-based compensation arrangements was $19,000, $0.3 million and $0 for 2018, 2017 and 2016, respectively. At December 31, 2018, we had $3.4 million of unrecognized compensation expense related to our restricted stock awards. This cost is expected to be recognized over a weighted-average period of two years. The total fair value of restricted stock awards granted during 2018 was $4.9 million and the total fair value of restricted stock awards that vested during 2018 was $2.7 million. At December 31, 2018 we had no outstanding stock option awards and no stock option awards were made during 2018, 2017 or 2016.
Performance Awards - Stock-based performance awards represent awards that are settled in cash and for which the amount payable is determined based upon our total shareholder return during the performance period compared to an industry peer group as determined by our Compensation Committee. The awards have a three-year performance period with grants outstanding for 2016, 2017 and 2018 having performance periods ending December 31, 2018, 2019, and 2020, respectively. The cash payment occurs in the period immediately following the completion of the performance period. The fair value of the awards is calculated each reporting period and is expensed on a straight-line basis over the applicable performance period, with cumulative adjustments for changes in the fair value between reporting periods.

Compensation expense for our stock-based performance awards was $1.1 million, $1.5 million and $1.3 million for 2018, 2017 and 2016, respectively. The total fair value of stock-based performance awards granted during 2018, 2017 and 2016 was $3.8 million, $4.7 million and $1.6 million, respectively, as determined using a Monte Carlo simulation model.