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Stock-Based and Other Long-Term Incentive Compensation | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-Based and Other Long-Term Incentive Compensation | Stock-Based and Other Long-Term Incentive Compensation We maintain two stockholder approved plans for the issuance of stock-based compensation awards to our employees and Board of Director members: (i) the 2019 Equity Incentive Plan, as amended (the “Equity Incentive Plan”), and (ii) the 1998 Stock Option Plan, as amended (the “Stock Option Plan”). The following table summarizes the total stock-based compensation expense recognized during the periods presented:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Equity-classified | $ | 1,821 |  |  | $ | 2,054 |  |  | $ | 1,910 |
Liability-classified (1) | 248 |  |  | — |  |  | — |
| $ | 2,069 |  |  | $ | 2,054 |  |  | $ | 1,910 |
(1) Represents compensation expense associated with awards that may be settled in cash at the option of the grantee. Equity Incentive Plan The Equity Incentive Plan provides for up to 1,150,000 shares of common stock for issuance in the form of awards for: (i) stock options, (ii) stock appreciation rights, (iii) restricted awards in the form of restricted stock and restricted stock units (“RSUs”), (iv) performance share awards, including performance share unit (“PSUs”) and (v) other equity-based awards. After consideration of the activity described in detail below, a total of 262,268 shares remained available for grant as of December 31, 2024. Time-Vested Restricted Shares and RSUs The following table summarizes all restricted stock and RSU (fully vested and time-vested) activity during the year ended December 31, 2024:
| Number of Shares |  | Weighted Average Grant Date Fair Value |  | Weighted Average Remaining Contractual Life (years) |  | Aggregate Intrinsic Value
Outstanding, December 31, 2023 | 133,898 |  |  | $ | 10.66 |  |  | 1.57 |  | $ | 1,813 |
Granted | 97,941 |  |  | $ | 18.44 |  |  |  |  | $ | 1,806 |
Vested | (74,447) |  |  | $ | 10.46 |  |  |  |  | $ | 1,636 |
Canceled/Forfeited | (26,209) |  |  | $ | 11.98 |  |  |  |  | $ | 214 |
Outstanding, December 31, 2024 | 131,183 |  |  | $ | 16.39 |  |  | 5.15 |  | $ | 3,516 |
As of December 31, 2024, there was a total of approximately $1.0 million of unrecognized compensation expense related to the unvested portion of the restricted stock and RSUs. This expense is expected to be recognized over the next 2.1 years. Cash-Settled RSUs The 2024 grant of RSUs to the independent Board members and Mr. Taylor that can be settled in cash represent liability-classified awards. Accordingly, compensation expense associated with these awards accumulates as a component of Accrued liabilities on our Consolidated Balance Sheet until the awards vest and are settled. Compensation expense associated with these awards is based upon the fair value of NGS common stock at each reporting period relative to that portion of the service period that has passed. Accordingly, the compensation expense is variable in nature. The following table summarizes all cash settled RSU activity during the year ended December 31, 2024:
| Number of Shares |  | Weighted Average Grant Date Fair Value |  | Weighted Average Remaining Contractual Life (years) |  | Aggregate Intrinsic Value
Outstanding, December 31, 2023 | — |  |  | $ | — |  |  | — |  |  | $ | — |
Granted | 15,069 |  |  | $ | 19.51 |  |  |  |  | $ | 294 |
Vested | — |  |  | $ | — |  |  |  |  | $ | — |
Canceled/Forfeited | — |  |  | $ | — |  |  |  |  | $ | — |
Outstanding, December 31, 2024 | 15,069 |  |  | $ | 19.51 |  |  | 0.50 |  | $ | 294 |
Cumulative compensation expense attributable to the cash-settled RSUs can range from zero to a maximum based on the total number of units vesting multiplied by closing price of our common stock on the vesting date. Performance Share Units In connection with the PSUs granted to our CEO, Chief Operating Officer (“COO”) and Chief Financial Officer (“CFO”) potential payout for the PSU awards is based upon performance for a three-year period ending December 31, 2026 for the CEO and COO and December 31, 2027 for the CFO measured against relative total shareholder return (“TSR”) compared to a peer group of companies as established by the Compensation Committee. The PSU award payout ranges from zero (if the Company ranks below the 31.25 percentile) and up to 200% (if the Company ranks first) based upon our relative TSR performance ranking (subject to certain caps based on absolute TSR as defined in the PSU agreements). With respect to vesting, the PSUs have both a service condition and a market condition. Due to the presence of the TSR measurement for the common equity of the peer companies, including NGS common stock, which is deemed a “market condition,” the grant-date fair values of the PSUs have been determined using a binomial pricing model, or a Monte Carlo simulation model. The following table summarizes the weighted average grant date fair values of PSUs granted and the assumptions used in the Monte Carlo simulation model for the determination of the grant date fair values of our PSUs for the year ended December 31, 2024:
Weighted-average grant date fair value of PSUs granted | $ | 22.47 |
Risk free rate | 4.09% to 4.39%
Expected volatility | 43.4% to 44.2%
Expected dividend yield | — | %
The following table summarizes all PSU activity during the year ended December 31, 2024:
| Number of Shares |  | Weighted Average Grant Date Fair Value |  | Weighted Average Remaining Contractual Life (years) |  | Aggregate Intrinsic Value
Outstanding, December 31, 2023 | — |  |  | $ | — |  |  | — |  |  | $ | — |
Granted | 56,764 |  |  | $ | 22.47 |  |  |  |  | $ | — |
Vested | — |  |  | $ | — |  |  |  |  | $ | — |
Canceled/Forfeited | — |  |  | $ | — |  |  |  |  | $ | — |
Outstanding, December 31, 2024 | 56,764 |  |  | $ | 22.47 |  |  | 2.22 |  | $ | — |
As of December 31, 2024, there was a total of approximately $1.0 million of unrecognized compensation expense related to the unvested portion of the PSUs. This expense is expected to be recognized over the next 2.2 years. Stock Option Plan The Stock Option Plan provides for the granting of incentive and non-qualified stock options to our employees for up to 1,000,000 shares of common stock. After consideration of the activity described in detail below, a total of, 407,419 shares remained available for grant as of December 31, 2024. The last date that grants can be made under the Stock Option Plan is February 28, 2026. Option awards are generally granted with an exercise price equal to the market price of our stock at the date of grant; those option awards generally vest in equal increments over three years of continuous service and have ten-year contractual terms. Certain option and share awards provide for accelerated vesting if there is a change in control of the Company (as defined in the Stock Option Plan). The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that applies the assumptions noted in the following table. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected life of options granted is based on the vesting period and historical exercise and post-vesting employment termination behavior for similar grants. We use historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The following table summarizes the weighted average grant date fair values of options granted and the assumptions used in the Black-Scholes option valuation model for their determination for the periods presented:
| Year Ended December 31, |  |  |  |  |  |  |  |
| 2024 |  | 2023 |  | 2022 |  |  |  |  |  |
Weighted-average grant date fair value of options granted | $ | 12.25 |  |  | $ | 5.11 |  |  | $ | 4.24 |  |  |  |  |  |  |  |  |
Risk free rate | 4.36 | % |  | 3.99 | % |  | 2.99 | % |  |  |  |  |  |  |  |
Expected life | 6.53 |  | 6.49 |  | 2.67 |  |  |  |  |  |  |  |
Expected volatility | 48.25 | % |  | 47 | % |  | 54.5 | % |  |  |  |  |  |  |  |
Expected dividend yield | — | % |  | — | % |  | — | % |  |  |  |  |  |  |  |
The following table summarizes all option activity during the year ended December 31, 2024:
| Number of Shares Underlying Stock Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (years) |  | Aggregate Intrinsic Value
Outstanding, December 31, 2023 | 129,751 |  |  | $ | 20.59 |  |  | 4.10 |  | $ | 274 |
Granted | 49,000 |  |  | $ | 22.73 |  |  |  |  | $ | — |
Vested | (23,666) |  |  | $ | 12.40 |  |  |  |  | $ | 286 |
Canceled/Forfeited | (11,667) |  |  | $ | 21.99 |  |  |  |  | $ | 11 |
Expired | (29,667) |  |  | $ | 30.41 |  |  |  |  | $ | — |
Outstanding, December 31, 2024 | 113,751 |  |  | $ | 20.44 |  |  | 5.84 |  | $ | 747 |
Outstanding, Exercisable, December 31, 2024 | 64,753 |  |  | $ | 19.93 |  |  | 3.30 |  | $ | 469 |
The following table summarizes information about our stock options outstanding at December 31, 2024:
Range of Exercise Prices |  | Options Outstanding |  | Options Exercisable
| Shares |  | Weighted Average Remaining Contractual Life (years) |  | Weighted Average Exercise Price |  | Shares |  | Weighted Average Exercise Price
$0.01-$18.00 |  | 29,834 |  |  | 7.25 |  | $ | 10.72 |  |  | 23,168 |  |  | $ | 10.67 |
$18.01-$26.00 |  | 66,167 |  |  | 6.19 |  | $ | 22.76 |  |  | 23,835 |  |  | $ | 22.81 |
$26.01-$30.00 |  | 17,750 |  |  | 2.13 |  | $ | 28.15 |  |  | 17,750 |  |  | $ | 28.15 |
|  | 113,751 |  |  | 5.84 |  | $ | 20.44 |  |  | 64,753 |  |  | $ | 19.93 |
The following table summarizes changes in our unvested stock options during the year December 31, 2024:
| Shares |  | Weighted Average Grant Date Fair Value
Unvested at December 31, 2023 | 24,335 |  |  | $ | 5.45 |
Granted | 49,000 |  |  | $ | 12.25 |
Vested | (17,170) |  |  | $ | 5.57 |
Canceled/Forfeited | (7,167) |  |  | $ | 11.28 |
Unvested at December 31, 2024 | 48,998 |  |  | $ | 11.35 |
We recognized stock compensation expense from stock options of $0.2 million, $0.1 million and $0.3 million for the years ended December 31, 2024, 2023 and 2022, respectively. As of December 31, 2024, there was $0.3 million of unamortized compensation cost related to unvested stock options. Other Long-Term Incentive Compensation From time to time and under certain circumstances, the Compensation Committee of our Board of Directors may grant cash-based incentive compensation awards that vest over periods greater than one year as a supplement to stock-based awards and in addition to customary annual incentive cash bonuses. Total compensation expense related to these long-term incentive awards was approximately $0.4 million and $1.0 million, respectively, for the years ended December 31, 2023 and 2022. The awards associated with these compensation charges were fully vested and settled in cash prior to December 31, 2023. Accordingly, there were no amounts remaining as unrecognized compensation and no outstanding obligations as of December 31, 2024 for these and any similar awards.

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