|12 Months Ended|
Dec. 31, 2018
|Disclosure of Compensation Related Costs, Share-based Payments [Abstract]|
NOTE 9 — SHARE-BASED COMPENSATION
We have granted restricted stock, restricted stock units and phantom units (collectively, “Restricted Stock”), as well as unrestricted stock and stock options, to employees, directors and outside consultants (collectively, the “grantees”) under the Tellurian Inc. 2016 Omnibus Incentive Compensation Plan, as amended (the “2016 Plan”), and the Amended and Restated Tellurian Investments Inc. 2016 Omnibus Incentive Plan (the “Legacy Plan”). The maximum number of shares of Tellurian common stock authorized for issuance under the 2016 Plan is 40 million shares of common stock, and no further awards can be made under the Legacy Plan.
For the year ended December 31, 2018, share-based compensation expense related to all share-based awards totaled approximately $5.1 million. For the year ended December 31, 2017, share-based compensation expense related to all share-based awards totaled approximately $23.0 million, approximately $2 million of which was issued in settlement of bonuses accrued at December 31, 2016. For the year ended December 31, 2016, share-based compensation expense related to all share-based awards totaled approximately $24.5 million. As of December 31, 2018, unrecognized compensation expense, based on the grant date fair value, for all share-based awards totaled approximately $197.0 million.
Upon the vesting of restricted stock, shares of common stock will be released to the grantee. Upon the vesting of certain restricted stock units, the units will be converted into shares of common stock and released to the grantee. In March 2018, we began issuing phantom units that may be settled in either cash, stock or a combination thereof. As of December 31, 2018, there was no Restricted Stock that would be required to be settled in cash.
As of December 31, 2018, we had granted approximately 24.4 million shares of performance-based Restricted Stock, of which approximately 19.8 million shares will vest entirely based upon an affirmative final investment decision (“FID”) by the Company’s board of directors, as defined in the award agreements, and approximately 4.0 million shares will vest in one-third increments at FID and the first and second anniversary of FID. The remaining shares of performance-based Restricted Stock, totaling approximately 0.6 million shares, will vest based on other criteria. As of December 31, 2018, no expense had been recognized in connection with performance-based Restricted Stock.
The fair value of the Restricted Stock was established by the market price on the date of grant and, for service-based awards, is being recognized as compensation expense ratably over the vesting term.
The following table provides a summary of our Restricted Stock transactions for the year ended December 31, 2018 (shares and units in thousands):
(1) The weighted-average grant date fair value of Restricted Stock granted during the years ended December 31, 2018, 2017 and 2016 was $11.02, $9.59 and $3.52, respectively.
The total grant date fair value of restricted stock vested during the years ended December 31, 2018, 2017 and 2016 was approximately $2.5 million, $3.7 million and $0.4 million, respectively.
The 2016 Plan participants have been granted non-qualified options to purchase shares of common stock. Stock options are granted at a price not less than the market price of the common stock on the date of grant. Stock options vest equally over a three-year period from the date of grant. Options shall be exercisable at such time and under such conditions set forth in the underlying award agreement, but in no event shall any option be exercisable later than the tenth anniversary of the date of its grant. The fair value of each stock option award is estimated using the Black-Scholes option pricing model.
The following table provides a summary of our stock option transactions for the year ended December 31, 2018 (stock options in thousands):
Valuation assumptions used to value stock options for the year ended December 31, 2017 (there were no stock options granted in 2018 or 2016), were as follows:
Due to our limited history, the Company has elected to apply the simplified method to determine the expected term. Additionally, due to our limited history, expected volatility is based on the implied volatility of the Company's peer group as identified by our board of directors. The expected dividend yield is based on historical yields on the date of grant. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant.
There were no stock options granted or exercised during the year ended December 31, 2018. There were 2.0 million stock options granted during the year ended December 31, 2017, with the weighted average grant date fair value of $2.72. No stock options were exercised during the year ended December 31, 2017. There were no stock options granted or exercised during the year ended December 31, 2016.
The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef