Stock-based Compensation |
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| Stock-based Compensation | 14. STOCK-BASED COMPENSATION The Company adopted 2022 Omnibus Equity Incentive Plan (the "2022 Plan") in 2022 which was approved by our stockholders on July 21, 2022. The purposes of the 2022 Plan are to (i) provide an additional incentive to selected employees, directors, and independent contractors of the Company or its Affiliates whose contributions are essential to the growth and success of the Company, (ii) strengthen the commitment of such individuals to the Company and its Affiliates, (iii) motivate those individuals to faithfully and diligently perform their responsibilities and (iv) attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company. The 2022 Plan allows for granting of stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. The Company registered 19,811,726 shares of Class A common stock that can be issued under this Plan. Stock Options Stock options generally vest over three years and expire ten years from the date of grant. The fair value of the stock options granted in 2025 was estimated at $1.44 per option using the Black-Scholes model. The valuation was based on the following assumptions: share price of $2.04, exercise price of $1.53, expiration of 10 years, annual risk-free interest rate of 3.90% and expected volatility of 50%. The fair value of the stock options granted in 2024 was estimated at $3.40 per option using the Black-Scholes model. The valuation was based on the following assumptions: share price of $4.96, exercise price of $5.02, expiration of 10 years, annual risk-free interest rate of 3.96%, and expected volatility of 55%. Stock option activity during the year ended December 31, 2025, consisted of the following (in thousands, except for share and per share data):
The weighted-average grant date fair value of stock options granted during the years ended December 31, 2025 and 2024 was $1.44 and $3.40 per share, respectively. The aggregate intrinsic value of the outstanding stock options is $922 and zero as of December 31, 2025 and 2024, respectively. The aggregate intrinsic value of the vested and exercisable stock options is zero as of December 31, 2025 and 2024. Performance Units Performance units are contingent upon the Company achieving specified Adjusted EBITDA and production targets. The grant date fair value of these awards was estimated based on the volume-weighted average price of the Company’s Class A common stock on the date of grant. Compensation expense related to these awards is recognized over the performance period based on the estimated probability of achieving the performance conditions as of the reporting date. The applicable performance period for the units granted in 2025 is from January 1, 2025 to December 31, 2027, with all such units scheduled to vest on March 31, 2028, subject to the achievement of certain performance criteria. The applicable performance period for the units granted in 2024 is from January 1, 2024 to December 31, 2026, with all such units scheduled to vest on March 31, 2027, subject to the achievement of certain performance criteria.
Restricted Stock The Company’s RSU based payment awards provide recipients with the right to receive shares of Class A common stock upon achievement of vesting conditions. At issuance, the value of the RSU is equal to the value of the per share Class A common stock value. These awards typically include time-based vesting conditions and generally vest over the service period of to three years. A summary of the unvested shares as of December 31, 2025, and changes during the year ended December 31, 2025, is presented below.
The total fair value of shares vested during the years ended December 31, 2025 and 2024, was $4,241 and $3,095 respectively. Parent Equity Awards During the years ended December 31, 2020 and 2019, Fortistar granted certain equity-based awards to certain employees of the Company in the form of residual equity interests (“Profit Interests”) in four wholly-owned subsidiaries of the Company. The Profit Interests do not have voting rights and shall participate in the income distributions when the subsidiaries achieve certain financial targets. These Profits Interests were restructured in December 2020, at which time they became based on a portion of Fortistar's indirect ownership in the Company, rather than in Fortistar's ownership interest in Company subsidiaries. The percentage of Profit Interests issued in the investment entities that were established to grant the incentive units ranged between 34%-37% in the four wholly-owned subsidiaries. These Profit Interests vest ratably over a period of five years from the grant date. There were no new residual equity interest grants during the years ended December 31, 2025 and 2024. As of December 31, 2025 all of the Profit Interests issued vested. As of December 31, 2024, 96% of the Profit Interests issued vested. There were no forfeitures during the years ended December 31, 2025 and 2024. The stock-based compensation expense for the above stock awards under the 2022 Plan as well as Parent Equity Awards is included in selling, general and administrative expenses:
Stock-based compensation expense related to unvested awards yet to be recognized as of December 31, 2025 totaled $10,287 and is expected to be recognized, on a weighted average basis, over 1.79 years.
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