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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Share-Based Compensation | 10. Share-Based Compensation During 2019, we adopted our 2019 Employee Stock Purchase Plan (the “ESPP”). The purpose of the ESPP is to provide eligible employees an opportunity to purchase shares of our Class A common stock over time through regular payroll deductions. The ESPP initially reserved and authorized the issuance of up to a total of 300,000 shares of our Class A common stock to participating employees, subject to certain adjustments. The number of shares of Class A common stock available for issuance under the ESPP will be increased on the first day of each year beginning with 2020 in an amount equal to the number of shares issued under the ESPP in the prior year. No participant may purchase more than 1,000 shares of our Class A common stock during any offering period under the ESPP. In addition, under applicable tax rules, an employee may purchase no more than $25,000 worth of shares of our Class A common stock, valued at the start of the offering period, under the ESPP for each calendar year. Also during 2019, we adopted our 2019 Long-Term Incentive Plan (the “2019 Incentive Plan”), which replaced our 2009 Incentive Plan. The authority to grant new options under the 2009 Incentive Plan expired on April 23, 2019. The purpose of the 2019 Incentive Plan is to advance the interests of our company and its shareholders by providing incentives to certain employees and other key individuals who perform services for us, including those who contribute significantly to the strategic and long-term performance objectives and growth of our company. An aggregate of not more than 1.8 million shares of our Class A common stock, subject to certain adjustments, may be issued under the 2019 Incentive Plan, and the 2019 Incentive Plan terminates no later than April 25, 2029. The exercise price for our options is generally equal to the closing market price of our stock at the date of the grant, and the options normally vest at 2% per month for the 50 months beginning in the eleventh month after the grant date. Follow on option grants begin vesting in the first month after grant. We recognize the compensation expense related to share-based payment awards on a straight-line basis over the requisite service periods of the awards, which are generally five years for employees, and five years for board members. The determination of the estimated fair value of share-based payment awards on the date of grant using the Black-Scholes option-pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. We derive the expected terms from the historical behavior of participant groupings. We base expected volatilities on the historical volatility of our stock over the expected term. Our use of historical volatilities is based upon the expectation that future volatility over the expected term is not likely to differ significantly from historical results. We base the risk-free interest rate used in the option valuation model on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. There were no options granted during 2019. The following are the variables we used in the Black-Scholes option pricing model to determine the estimated grant date fair value for options granted under the 2009 Incentive Plan for the year presented:
|  | 2018 |
Expected volatility |  | 41% |
Weighted-average volatility |  | 41% |
Expected dividends |  | —% |
Expected term (in years) |  |  | 6.6 |
Risk-free rate |  | 2.86% |
In 2015, we commenced issuing restricted stock units (RSUs). The RSUs entitle the recipient to receive one share of Class A common stock for each RSU upon vesting. The RSUs vest with cliff vesting in 5 years, provided that the recipient is still an employee or director of Gaia on such date. The RSUs will be automatically forfeited and of no further force and effect if the vesting conditions are not met. We use intrinsic valuation for RSUs, which due to the nature of these awards, is typically market price of our common stock on the date of grant. The table below presents a summary of activity under the 2009 Incentive Plan and the 2019 Incentive Plan, as of December 31, 2019, and changes during the year then ended:
(in thousands, except share and per share amounts) |  | Shares |  |  | Weighted- Average Exercise Price |  |  | Weighted- Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value |
Outstanding at January 1, 2019 |  |  | 1,584,225 |  |  | $ | 7.97 |  |  |  |  |  |  |  |  |
Option grants |  |  | — |  |  |  | — |  |  |  |  |  |  |  |  |
Restricted stock unit grants |  |  | 41,100 |  |  |  | — |  |  |  |  |  |  |  |  |
Exercised options |  |  | (30,000 | ) |  |  | 7.82 |  |  |  |  |  |  |  |  |
Cancelled or forfeited options |  |  | (123,361 | ) |  |  | 9.04 |  |  |  |  |  |  |  |  |
Cancelled or forfeited restricted stock units |  |  | (136,930 | ) |  |  | — |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2019 |  |  | 1,335,034 |  |  | $ | 7.60 |  |  |  | 3.1 |  |  | $ | 8,571,406 |
Exercisable options at December 31, 2019 |  |  | 330,096 |  |  | $ | 7.65 |  |  |  | 5.8 |  |  | $ | 342,489 |
The table below presents our valuation data:
(in thousands, except per share amounts) |  | 2019 |  |  | 2018 |
Valuation Data: |  |  |  |  |  |  |  |
Weighted-average fair value (per share) |  | $ | 6.41 |  |  | $ | 14.09 |
Total stock-based compensation expense |  | $ | 1,812 |  |  | $ | 1,650 |
Total income tax impact on provision |  | $ | 372 |  |  | $ | 346 |
The table below presents our outstanding RSU’s by vest date:
Vest Date |  | RSU's |
March 16, 2020 |  |  | 311,712 |
April 30, 2020 |  |  | 22,620 |
January 1, 2021 |  |  | 8,196 |
March 31, 2022 |  |  | 366,534 |
January 1, 2023 |  |  | 8,196 |
March 31, 2024 |  |  | 274,580 |
|  |  | 991,838 |
We issue new shares upon the exercise of options and vesting of RSUs. We received approximately $235,000 and $268,000 in cash from stock options exercised during 2019 and 2018, respectively. The total intrinsic value of options exercised during 2019 and 2018 was $36,000 and $385,000, respectively. The total fair value of options vested was $231,000 and $292,000 during 2019 and 2018, respectively. As of December 31, 2019, there was $4.6 million of unrecognized cost related to non-vested share-based compensation arrangements granted under the 2009 and 2019 Incentive Plans. We expect that cost to be recognized over a weighted-average period of 3.45 years.

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