Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.21.2
Stock-Based Compensation
6 Months Ended
Jun. 30, 2021
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Stock Options
          There were no new stock option grants during the six months ended June 30, 2021. As of June 30, 2021, the aggregate intrinsic value for our outstanding stock options was $3.0 million, and the aggregate intrinsic value for our exercisable stock options was $3.0 million. The aggregate intrinsic value for the exercised stock options during the six months ended June 30, 2021 was approximately $18.7 million. The remaining exercise period for both the outstanding and exercisable stock options as of June 30, 2021 was 4.1 years.

          A summary of the stock option activity for the six months ended June 30, 2021 is presented below:
Number of Shares Weighted
Average
Exercise
Price
Outstanding at January 1, 2021 4,200,341  $ 4.82 
Granted —  $ — 
Exercised (3,128,798) $ 3.39 
Forfeited —  $ 14.00 
Expired (76,306) $ 14.00 
Outstanding at June 30, 2021 995,237  $ 8.61 
Exercisable at June 30, 2021 995,237  $ 8.61 
Restricted Stock Units
         During the six months ended June 30, 2021, we granted a total of 787,287 restricted stock units ("RSUs") to employees, officers and directors pursuant to the ProPetro Holding Corp. 2020 Long Term Incentive Plan (the "2020 Incentive Plan"), which generally vest ratably over a three-year vesting period, in the case of awards to employees and officers, and generally vest in full after one year, in the case of awards to directors. RSUs are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases to be an employee or director of the Company prior to vesting of the award. Each RSU represents the right to receive one share of common stock. The grant date fair value of the RSUs is based on the closing share price of our common stock on the date of grant. As of June 30, 2021, the total unrecognized compensation expense for all RSUs was approximately $9.8 million, and is expected to be recognized over a weighted average period of approximately 2.1 years.
          The following table summarizes RSUs activity during the six months ended June 30, 2021:
Number of
Shares
Weighted
Average
Grant Date
Fair Value
Outstanding at January 1, 2021 1,165,369  $ 8.50 
Granted 787,287  $ 9.85 
Vested (570,428) $ 8.58 
Forfeited (2,037) $ 10.96 
Canceled —  $ — 
Outstanding at June 30, 2021 1,380,191  $ 9.23 
Performance Share Units
           During the six months ended June 30, 2021, we granted 553,876 performance share units ("PSUs") to certain key employees and officers as new awards under the 2020 Incentive Plan. The actual number of shares of common stock that may be issued under the PSUs ranges from 0% up to a maximum of 200% of the target number of PSUs granted to the participant, based on our total shareholder return ("TSR") relative to a designated peer group, generally at the end of a three year period. In addition to the TSR conditions, vesting of the PSUs is generally subject to the recipient’s continued employment through the end of the applicable performance period. Compensation expense is recorded ratably over the corresponding requisite service period. The grant date fair value of PSUs is determined using a Monte Carlo probability model. Grant recipients do not have any shareholder rights until performance relative to the peer group has been determined following the completion of the performance period and shares have been issued.
          The following table summarizes information about PSUs activity during the six months ended June 30, 2021:
Period
Granted
Target Shares Outstanding at January 1, 2021 Target
Shares
Granted
Target Shares Vested Target
Shares
Forfeited
Target Shares Outstanding at June 30, 2021 Weighted
Average
Grant Date
FV Per
Share
2018 84,322  —  (84,322) —  —  $ 27.51 
2019 126,318  —  —  —  126,318  $ 27.49 
2020 808,638  —  —  —  808,638  $ 8.30 
2021 —  553,876  —  —  553,876  $ 15.37 
Total 1,019,278  553,876  (84,322) —  1,488,832  $ 12.56 
Weighted Average FV Per Share $ 12.27  $ 15.37  $ 27.51  $ —  $ 12.56 
          The total stock-based compensation expense for the six months ended June 30, 2021 and 2020 for all stock awards was $5.4 million and $3.4 million, respectively. The total unrecognized stock-based compensation expense as of June 30, 2021 was approximately $20.9 million, and is expected to be recognized over a weighted average period of approximately 2.1 years.