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Stock Based Compensation | 12 Months Ended
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Dec. 31, 2020
Share-based Payment Arrangement [Abstract] |
Stock Based Compensation | Stock-Based Compensation Equity Incentive Plans In connection with the Merger, the Company assumed ApolloMed’s 2013 Equity Incentive Plan (the “2013 Plan”), pursuant to which 500,000 shares of the Company’s common stock were reserved for issuance thereunder. The Company issues new shares to satisfy stock option and warrant exercises under the 2013 Plan. As of December 31, 2020, there were no shares available for future grants under the 2013 Plan. In connection with the Merger, the Company assumed ApolloMed’s 2015 Equity Incentive Plan (the “2015 Plan”), pursuant to which 1,500,000 shares of the Company’s common stock were reserved for issuance thereunder. In addition, shares that are subject to outstanding grants under the Company’s 2013 Plan but that ordinarily would have been restored to such plans reserve due to award forfeitures and terminations were rolled into and become available for awards under the 2015 Plan. The 2015 Plan provides for awards, including incentive stock options, non-qualified options, restricted common stock, and stock appreciation rights. The 2015 Plan was approved by ApolloMed’s stockholders at ApolloMed’s 2016 annual meeting of stockholders that was held in September 2016. As of December 31, 2020, 2019 and 2018, there were approximately 0.1 million, 0.5 million and 0.9 million shares available for future grants under the 2015 Plan, respectively. The following table summarizes the stock-based compensation expense recognized under all of the Company's stock plans in 2020, 2019, and 2018 and associated with the issuance of restricted shares of common stock and vesting of stock options which are included in General and administrative expenses in the accompanying consolidated statement of income recognized (in thousands):
| Years ended December 31,
|  | 2020 |  | 2019 |  | 2018
Stock options |  | $ | 1,763 |  |  | $ | 688 |  |  | $ | — |
Restricted stock awards |  | 1,620 |  |  | 252 |  |  | 632 |
APC stock options |  | — |  |  | 607 |  |  | 810 |
Total share-based compensation expense |  | $ | 3,383 |  |  | $ | 1,547 |  |  | $ | 1,442 |
Options The Company’s outstanding stock options consisted of the following:
| Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (in millions)
Options outstanding at January 1, 2020 | 607,346 |  |  | $ | 9.22 |  |  | 3.42 |  | $ | 5.6 |
Options granted | 250,746 |  |  | 18.11 |  |  | — |  |  | — |
Options exercised | (120,000) |  |  | 2.58 |  |  | — |  |  | 1.8 |
Options canceled, forfeited or expired | (12,228) |  |  | 17.57 |  |  | — |  |  | — |
Options outstanding at December 31, 2020 | 725,864 |  |  | $ | 13.25 |  |  | 3.75 |  | $ | 3.4 |
Options exercisable at December 31, 2020 | 449,464 |  |  | $ | 6.33 |  |  | 1.94 |  | $ | 3.6 |
During the years ended December 31, 2020 and 2019, stock options were exercised for 120,000 and 241,214 shares, respectively, of the Company’s common stock, which resulted in proceeds of approximately $0.3 million and $1.5 million, respectively. The exercise prices ranged from $2.10 to $5.00 per share for the exercises during the year ended December 31, 2020 and ranged from $1.50 to $10.00 per share for the exercises during the year ended December 31, 2019. During the year ended December 31, 2020, no stock options were exercised pursuant the cashless exercise provision. During the year ended December 31, 2020, the Company granted 191,742 and 59,004 five-year stock options to certain ApolloMed board members and executives, respectively, with exercise price ranging from $18.20-$18.41 and $17.78, respectively, which were recognized at fair value, as determined using the Black-Scholes option pricing model as follows:
December 31, 2020 |  | Board Members |  | Executives
Expected Term |  | 3.0 years |  | 3.5 years
Expected volatility |  | 85.44% - 90.01% |  | 80.95 | %
Risk-free interest rate |  | 0.23% - 1.43% |  | 0.23 | %
Market value of common stock |  | $18.20 - $18.41 |  | $ 17.78
Annual dividend yield |  | 0 | % |  | 0 | %
Forfeiture rate |  | 0 | % |  | 0 | %
Restricted Stock Awards The Company grants restricted stock awards to employees and executives which are earned based on service conditions. The grant date fair value of the restricted stock awards is that day’s closing market price of the Company’s common stock. During the year ended December 31, 2020, the Company granted restricted stock awards for employees totaling 97,447 shares with a weighted average grant date fair value of $17.58 and for executives totaling 130,484 shares with the grant date fair value of $17.78. The grant date fair value of the restricted stock for employees was $1.6 million and will be recognized on a straight-line basis over the awards’ vesting period of three years, of which 7,394 shares of restricted stock with grant date fair value of $0.1 million were forfeited during the year ended December 31, 2020. The grant date fair value of restricted stock for executives was $2.3 million and will be recognized on a straight-line basis over the awards' vesting period of three years. The Company recorded approximately $1.6 million of share-based compensation expense associated with the issuance of restricted shares of common stock and vesting of stock options which are included in general and administrative expenses in the accompanying consolidated statements of income for the year ended December 31, 2020. Unrecognized compensation expense related to total share-based payments outstanding as of December 31, 2020 was $7.1 million. APC Stock Options Issued Under Primary Care Physician Agreements On October 1, 2014, NMM and APC entered into an Exclusivity Amendment Agreement as part of the Primary Care Physician Agreement to issue stock options to purchase shares of NMM and APC common stock. The medical providers agreed to exclusivity to APC for health enrollees in consideration per provider of an exclusivity incentive in the amount of $25,000 (or $15,000 if already a preferred provider). The stock options were granted from the date of agreement through May 1, 2015 and are treated as issuances to non-employees. The exercise price of the stock options was $2.44 (for NMM pre-merger) and $0.17 (for APC) per share and providers were able to exercise anytime between August 1, 2015 and October 1, 2019, as long as the providers continue to provide services pursuant to the terms of the agreement through October 1, 2019. If the agreement is terminated by the provider with or without cause, the exclusivity incentive and any capitation payment above standard rates made in accordance with the terms of the agreement shall be fully repaid to APC by the terminating medical provider. In addition, any unexercised share options held by the terminating medical provider will be forfeited on effective date of termination, and any share options that have been exercised will be bought back by NMM and APC at the original purchase price. As all outstanding options, and the contingency to repurchase these options, expired on October 1, 2019, there is no expense recognized in connection with the Exclusivity Amendment Agreements during the year ended December 31, 2020.

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