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Stock-Based Compensation and Other Benefit Plans | 12 Months Ended
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Dec. 31, 2020
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation and Other Benefit Plans | Stock-Based Compensation and Other Benefit Plans Stock-Based Incentive Plans Stockholders approved long-term incentive plans in 2019, 2018, 2014, 2010 and 2007 (the “2019 Plan,” the “2018 Plan,” the “2014 Plan,” the “2010 Plan” and the “2007 Plan,” respectively) under which the Company may grant equity awards to officers, key employees, non-employee directors and service providers in the form of stock options, restricted stock, and certain other incentive awards. The maximum number of shares that may be issued under the 2019 Plan, 2018 Plan, 2014 Plan, 2010 Plan and 2007 Plan are 1.0 million, 3.0 million, 5.2 million, 6.0 million and 2.2 million, respectively. At December 31, 2020, the Company had a total of 1.8 million shares remaining to be granted under the 2019 Plan and 2018 Plan. Shares may no longer be granted under the 2007, 2010 and 2014 Plans. Stock Options All stock options are granted with an exercise price equal to the market value of the Company’s common stock on the date of grant. During 2020, 1.3 million stock options were granted, all market-based options. The market-based options are restricted until criteria defined in the agreement are met. Proceeds received from stock option exercises are credited to common stock and additional paid-in capital, as appropriate. The Company uses historical data to estimate pre-vesting option forfeitures. Estimates are adjusted when actual forfeitures differ from the estimate. Stock-based compensation expense is recorded for all equity awards expected to vest. During the year ended December 31, 2020, 0.1 million stock options vested, and 0.6 million stock options were forfeited. No stock options vested or were forfeited during the year ended December 31, 2019. Stock option activity for the years ended December 31, 2020 and 2019, are as follows
| Shares |  | Weighted-Average Exercise Price | Weighted-Average Fair Value |  |  |  |  |  |  |  |
Outstanding as of January 1, 2019 | — |  |  | $ | — |  | $ | — |  |  |  |  |  |  |  |  |
Granted | 3,000,000 |  |  | 1.93 |  | 1.25 |  |  |  |  |  |  |  |  |
Exercised | — |  |  | — |  | — |  |  |  |  |  |  |  |  |
Forfeited | — |  |  | — |  | — |  |  |  |  |  |  |  |  |
Outstanding as of January 1, 2020 | 3,000,000 |  |  |  |  |  |  |  |  |  |  |  |
Granted | 1,327,795 |  |  | 1.12 |  | 0.62 |  |  |  |  |  |  |  |  |
Exercised | (111,298) |  |  | 0.92 |  | 0.51 |  |  |  |  |  |  |  |  |
Forfeited | (556,497) |  |  | 0.92 |  | 0.51 |  |  |  |  |  |  |  |  |
Outstanding as of |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2020 | 3,660,000 |  |  |  |  |  |  |  |  |  |  |  |
Vested or expected to vest at |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2020 | 1,111,298 |  |  |  |  |  |  |  |  |  |  |  |
. The following table sets forth significant assumptions used in the Monte Carlo model for market-based options to determine the fair value of the option s at the date of grant:
| Year Ended December 31, 2020 |  | Year Ended December 31, 2019 |  |  |  |
| Market-Based Options |  | Market-Based Options |  |  |  |
Risk-free interest rate | 0.12 | % |  | 1.84 | % |  |  |  |
Expected volatility of common stock | 103.50 | % |  | 71.57 | % |  |  |  |
Expected life of options in years | 2 |  | 7 |  |  |  |
Vesting period in years | 2 |  | 7 |  |  |  |
The following table sets forth significant assumptions used in the Black Scholes model for time-vested options to determine the fair value of the option s at the date of grant:
|  | Year Ended December 31, 2019
|  |  | Time-Vested Options
Initial stock price |  |  | $ | 1.93
Strike price |  |  | 1.93
Term (in years) |  |  | 6.5
Risk-free rate |  |  | 1.8 | %
Volatility rate |  |  | 73.6 | %
The Company had no time-vested options granted in 2020. At December 31, 2020, the unrecognized compensation cost related to stock options was $3.6 million. Restricted Stock The Company grants employees either time-vesting or market-based restricted shares in accordance with terms specified in the Restricted Stock Agreements. During the year ended December 31, 2020, 53% of the restricted shares granted were time-vesting and 47% were performance-based. Grantees of restricted shares retain voting rights for the granted shares. •Time-vesting restricted shares vest after a stipulated period has elapsed after the date of grant, generally three years. Certain time-vested shares have also been issued with a portion of the shares granted vesting immediately. •Market-based restricted shares are issued with criteria defined over a designated period and vest only when, and if, the outlined criteria are met. Restricted stock share activity for the years ended December 31, 2020 and 2019, are as follows:
Restricted Stock Shares |  | Shares |  | Weighted- Average Fair Value at Date of Grant
Non-vested at January 1, 2019 |  | 1,050,372 |  |  | $ | 3.47 |
Granted to employees |  | 1,494,022 |  |  | 2.62 |
Vested |  | (615,941) |  |  | 3.72 |
Forfeited |  | (299,433) |  |  | 3.16 |
Non-vested at January 1, 2020 |  | 1,629,020 |  |  | 2.66 |
Granted to employees |  | 3,114,978 |  |  | 0.83 |
Vested |  | (711,988) |  |  | 2.94 |
Forfeited |  | (1,236,910) |  |  | 1.65 |
Non-vested at December 31, 2020 |  | 2,795,100 |  |  | $ | 1.00 |
The total fair value of restricted stock that vested during the years ended December 31, 2020 and 2019 was $2.1 million and $6.3 million, respectively. At December 31, 2020, unrecognized compensation expense related to non-vested restricted stoc k was $1.8 million. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 0.8 years. Restricted Stock Units During the year ended December 31, 2020, the Company granted 0.9 million market-based restricted stock units (“RSU s”). The performance period for these RSUs continues until December 22, 2024. During the year ended December 31, 2019, the Company granted 1.1 million RSUs. The period for these RSUs continues until December 31, 2024. Restricted stock units activity for the years ended December 31, 2020 and 2019, are as follows:
Restricted Stock Units (1) |  | Units |  | Weighted- Average Fair Value at Date of Grant
RSUs at January 1, 2019 |  | 301,766 |  |  | $ | 3.94 |
2018 forfeited |  | (272,046) |  |  | 6.39 |
2019 granted |  | 1,071,530 |  |  | 3.75 |
2019 forfeited |  | (62,776) |  |  | 1.66 |
RSUs at January 1, 2020 |  | 1,038,474 |  |  | 3.24 |
2020 granted |  | 922,786 |  |  | 1.19 |
2020 forfeited |  | (733,711) |  |  | 3.79 |
RSUs at December 31, 2020 |  | 1,227,549 |  |  | $ | 1.25 |
(1) Restricted stock units and performance stock units are disclosed in the preceding table. At December 31, 2020, unrecognized compensation expense related to restricted stock units was $2.0 million. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 1.2 years. Employee Stock Purchase Plan The Company’s Employee Stock Purchase Plan (“ESPP”) was approved by stockholders in 2012. The Company registered 500,000 shares of its common stock, currently held as treasury shares, for issuance under the ESPP. The purpose of the ESPP is to provide employees with an opportunity to purchase shares of the Company’s common stock through accumulated payroll deductions. The ESPP allows participants to purchase common stock at a purchase price equal to 85% of the fair market value of the common stock on the last business day of a three-month offering period which coincides with calendar quarters. Payroll deductions may not exceed 10% of an employee’s compensation and participants may not purchase more than 1,000 shares in any one offering period. In addition, for each calendar year, an employee may not be granted purchase rights for Flotek Stock valued over $25,000, as determined at the time such purchase right is granted. The fair v alue of the discount associated with shares purchased under the plan is recognized as stock-based compensation expense and was $0.1 million for each of the years ended December 31, 2020 and 2019. The total fair value of the shares purchased under the plan during each of the years ended December 31, 2020 and 2019 was $0.1 million. The employee payment associated with participation in the plan occurs through payroll deductions. Effective after the third quarter 2018 purchase, the Company suspended the ESPP due to lack of shares. Following shareholder approval for additional shares, the Company resumed the ESPP during the second quarter 2019. Stock-Based Compensation Expense Non-cash stock-based compensation expense related to restricted stock, restricted stock unit grants and stock purchased under the Company’s ESPP was $3.2 million and $4.0 million during the years ended December 31, 2020 and 2019, respectively. 401(k) Retirement Plan The Company maintains a 401(k) retirement plan for the benefit of eligible employees in the U.S. All employees are eligible to participate in the plan upon employment. On January 1, 2015, the Company implemented a new matching program. The Company matches contributions at 100% of up to 2% of an employee’s compensation and, if greater, the Company matches contributions at 50% from 5% to 8% of an employee’s compensati on. In April 2020, the Company suspended its matching contribution to employee accounts. During the years ended December 31, 2020 and 2019, compensation expense included $0.2 million and $0.7 million, respectively, related to the Company’s 401(k) match.

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- Definition The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 712 -URI http://asc.fasb.org/topic&trid=2197446 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 710 -URI http://asc.fasb.org/topic&trid=2127225 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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