Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.20.2
Stock-Based Compensation
9 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
The Company granted the following stock-based awards in the periods indicated:
  Three Months Ended
 September 30,
Nine Months Ended
 September 30,
  2020 2019 2020 2019
Stock options 457,692  14,000  457,692  39,000 
Restricted stock awards and restricted stock units 511,392  25,900  564,992  222,588 
With the exception of the awards described in the following paragraph, the stock options, restricted stock awards and restricted stock units granted during the nine months ended September 30, 2020 and 2019 were granted under the Company's Second Amended and Restated 2007 Stock Incentive Plan (the "2007 Plan"), a shareholder approved plan.

In addition to awards granted under the 2007 Plan, the Company granted a non-qualified option to purchase 457,692 shares of its common stock to a newly hired executive management level employee on July 22, 2020, which was the first date of an open window period following the first day of employment. The option was granted outside of any shareholder-approved plan as an inducement to accept employment with the Company. The option has an exercise price equal to the closing price of the Company’s common stock as reported by the Nasdaq Stock Market on the grant date, vest in three equal installments on each of the first three anniversaries of the date of grant and has a term of seven years. In other respects, the option was structured to mirror the terms of the options granted under the 2007 Plan and are subject to a stock option agreement between the Company and the employee.

During the three months ended September 30, 2020, the Company's shareholders approved an amendment to the 2007 Plan to increase the number of shares authorized under the plan by 500,000 to a total of 3,730,320 shares.

In settlement of vested performance stock units granted in 2018, during the nine months ended September 30, 2019 the Company issued 98,492 shares of restricted stock, which was equal to the number of vested 2018 performance stock units multiplied by the performance goals achievement of 100%. At December 31, 2019, there were 40,599 shares of common stock underlying the outstanding 2018 performance stock units that were subject to vesting upon the achievement of performance goals for the performance period of January 1, 2019 to December 31, 2019. The outstanding unvested 2018 performance stock units were canceled on February 10, 2020 upon determination by the Compensation Committee of the Company's Board of Directors that the performance metric for the 2019 performance period was not achieved. Accordingly, as of September 30, 2020, there were no performance stock units outstanding.
The Company recognized the following expense related to its share-based payment arrangements (in thousands):
  Three Months Ended
 September 30,
Nine Months Ended
 September 30,
  2020 2019 2020 2019
Stock-based compensation cost, before income tax benefit:        
Stock options $ 119  $ 85  $ 257  $ 255 
Restricted stock awards and restricted stock units 92  134  363  384 
Performance stock units —  —  — 
Total stock-based compensation $ 211  $ 219  $ 620  $ 644 
  Three Months Ended
 September 30,
Nine Months Ended
 September 30,
  2020 2019 2020 2019
Stock-based compensation cost included in:        
Cost of revenues $ 12  $ $ 22  $ 20 
Operating expenses 199  213  598  624 
Total stock-based compensation $ 211  $ 219  $ 620  $ 644