In the W&T Offshore, Inc. Amended and Restated Incentive Compensation Plan (as amended from time to time, the “Plan”) was approved by our shareholders.  During and the Company granted restricted stock units (“RSUs”) under the Plan to certain of its employees.  RSUs are a long-term compensation component, and are subject to satisfaction of certain predetermined performance criteria and adjustments at the end of the applicable performance period based on the results achieved.  In addition to share-based awards, the Company grant to its employees cash-based incentive awards under the Plan, which be used as short-term and long-term compensation components of the awards, and are subject to satisfaction of certain predetermined performance criteria.

 

As of there were shares of common stock available for issuance in satisfaction of awards under the Plan.  The shares available for issuance are reduced on a -for- basis when RSUs are settled in shares of common stock, which shares of common stock are issued net of withholding tax through the withholding of shares.  The Company has the option following vesting to settle RSUs in stock or cash, or a combination of stock and cash. The Company expects to settle RSUs that vest in the future using shares of common stock.

 

RSUs currently outstanding relate to the and grants.  The grants are subject to pre-determined performance criteria which will be measured using performance results.  The and grants were subject to predetermined performance criteria applied against the applicable performance period.  All the RSUs currently outstanding are subject to employment-based criteria and vesting generally occurs in of the year after the grant.  See the table below for anticipated vesting by year.

 

We recognize compensation cost for share-based payments to employees over the period during which the recipient is required to provide service in exchange for the award.  Compensation cost is based on the fair value of the equity instrument on the date of grant.  The fair values for the RSUs granted during and were determined using the Company’s closing price on the grant date. We also estimate forfeitures, resulting in the recognition of compensation cost only for those awards that are expected to actually vest.

 

All RSUs awarded are subject to forfeiture until vested and cannot be sold, transferred or otherwise disposed of during the restricted period.

 

A summary of activity related to RSUs during the  months ended is as follows:

 

		Restricted Stock Units
						Weighted Average
						Grant Date Fair
		Units				Value Per Unit
Nonvested, December 31, 2018			3,355,917			$	3.90
Granted			990,608				4.51
Forfeited (1)			(1,075,864	)			3.12
Nonvested, September 30, 2019			3,270,661				4.34

 

 

For the outstanding RSUs issued to the eligible employees as of vesting is expected to occur as follows (subject to forfeitures): 

 

		Restricted Stock Units
2019			1,485,510
2020			852,535
2021			932,616
Total			3,270,661

 

  Under the W&T Offshore, Inc. Directors Compensation Plan (as amended from time to time, the “Director Compensation Plan”), shares of restricted stock (“Restricted Shares”) have been granted to the Company’s non-employee directors.  Grants to non-employee directors were made during and   As of there were  shares of common stock available for issuance in satisfaction of awards under the Director Compensation Plan.  The shares available are reduced on a -to- basis when Restricted Shares are granted.

 

We recognize compensation cost for share-based payments to non-employee directors over the period during which the recipient is required to provide service in exchange for the award.  Compensation cost is based on the fair value of the equity instrument on the date of grant.  The fair values for the Restricted Shares granted were determined using the Company’s closing price on the grant date.  forfeitures were estimated for the non-employee directors’ awards.

 

The Restricted Shares are subject to service conditions and vesting occurs at the end of specified service periods unless otherwise approved by the Board of Directors.  Restricted Shares cannot be sold, transferred or disposed of during the restricted period.  The holders of Restricted Shares generally have the same rights as a shareholder of the Company with respect to such Restricted Shares, including the right to vote and receive dividends or other distributions paid with respect to the Restricted Shares.

 

A summary of activity related to Restricted Shares during the  months ended is as follows:

 

		Restricted Shares
						Weighted Average
						Grant Date Fair
		Shares				Value Per Share
Nonvested, December 31, 2018			181,832			$	3.08
Granted			46,360				6.04
Vested			(105,012	)			2.67
Nonvested, September 30, 2019			123,180				4.55

 

For the Restricted Shares vested during the  months ended the grant date value was million and the vested date value, as determined on the vesting dates, was million.

 

For the outstanding Restricted Shares issued to the non-employee directors as of vesting is expected to occur as follows (subject to any forfeitures):

 

		Restricted Shares
2020			78,424
2021			29,300
2022			15,456
Total			123,180

 

Share-based compensation expense is recorded in the line s in the Condensed Consolidated Statements of Operations.  The tax benefit related to compensation expense recognized under share-based payment arrangements was meaningful and was minimal due to our income tax situation.  A summary of incentive compensation expense under share-based payment arrangements is as follows (in thousands):

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2019				2018				2019				2018
Share-based compensation expense from:
Restricted stock units (1)		$	1,178			$	1,303			$	2,219			$	3,598
Restricted Shares			70				70				210				210
Total		$	1,248			$	1,373			$	2,429			$	3,808

 

 

As of unrecognized share-based compensation expense related to our awards of RSUs and Restricted Shares was  million and  million, respectively.  Unrecognized share-based compensation expense will be recognized through for RSUs and for Restricted Shares.

 

In addition to share-based awards, cash-based awards were granted under the Plan to eligible employees in and   For there were cash-based awards consisting of a long-term award and a short-term award.  All cash-based awards are performance-based awards consisting of predetermined performance criteria applied against the applicable performance period.  Expense for each award is recognized over the service period once the applicable financial condition is expected to be met, and the business criteria and individual performance criteria can be reasonably estimated for the applicable period.

 

 

 

 

A summary of compensation expense related to share-based awards and cash-based awards is as follows (in thousands):

 

		Three Months Ended September 30,								Nine Months Ended September 30,
		2019				2018				2019				2018
Share-based compensation included in:
General and administrative expenses		$	1,248			$	1,373			$	2,429			$	3,808
Cash-based incentive compensation included in:
Lease operating expense (1)			672				837				951				2,240
General and administrative expenses (1)			1,679				1,534				5,017				5,597
Total charged to operating income		$	3,599			$	3,744			$	8,397			$	11,645