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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2018
Stock-Based Compensation |
Stock-Based Compensation | 8. Stock-Based Compensation Since the date of its effectiveness on May 5, 2016, the Company issues new grants of stock-based awards pursuant to the Dawson Geophysical Company 2016 Stock and Performance Incentive Plan (the “2016 Plan”). Upon its effectiveness, the 2016 Plan replaced: (i) the Amended and Restated Dawson Geophysical Company 2006 Stock and Performance Incentive Plan (the “Legacy Dawson Plan”), which originated from Legacy Dawson and (ii) the Amended and Restated 2006 Stock Awards Plan of Dawson Geophysical Company (formerly known as the TGC Industries, Inc. 2006 Stock Awards Plan) (the “Legacy TGC Plan”), which originated from Legacy TGC (the Legacy Dawson Plan and the Legacy TGC Plan are referred to collectively as the “Prior Plans”. The Company administered both of the Prior Plans as a result of the Merger, and per the 2016 Plan, no new grants of awards have been permitted under the Prior Plans after the effectiveness of the 2016 Plan. Further, the Legacy Dawson Plan and the Legacy TGC Plan expired pursuant to their terms on November 28, 2016 and March 29, 2016, respectively. Any outstanding awards previously granted under the Prior Plans continue to remain outstanding in accordance with their terms. The awards outstanding and available under the 2016 Plan and the awards outstanding under each of the Prior Plans and their associated accounting treatment are discussed below. In 2016, the Company adopted the 2016 Plan, which provides for the issuance of up to 1,000,000 shares of authorized Company common stock. As of December 31, 2018, there were approximately 418,517 shares available for future issuance. The 2016 Plan provides for the issuance of stock-based compensation awards, including stock options, common stock, restricted stock, restricted stock units and other forms. Stock option grant prices awarded under the 2016 Plan may not be less than the fair market value of the common stock subject to such option on the grant date, and the term of stock options shall extend no more than ten years after the grant date. The 2016 Plan terminates May 5, 2026. In 2006, Legacy Dawson adopted the Legacy Dawson Plan, which was amended and restated in connection with the Merger. The Legacy Dawson Plan provided for the issuance of stock-based compensation awards, including stock options, common stock, restricted stock, restricted stock units and other forms. Stock option grant prices awarded under the Legacy Dawson Plan were required to be no less than the fair market value of the common stock subject to such option on the grant date, and the term of stock options was limited to no more than ten years after the grant date. The Legacy Dawson Plan terminated on November 28, 2016 and, upon the effectiveness of the 2016 Plan on May 5, 2016, has had no shares available for future issuance. In 2006, the Company adopted the Legacy TGC Plan, which was amended and restated in connection with the Merger. The Legacy TGC Plan provided for the issuance of stock-based compensation awards, including stock options, common stock, and restricted stock. Stock option grant prices awarded under the Legacy TGC Plan were required to be no less than the fair market value of the common stock subject to such option on the grant date, and the term of stock options was limited to no more than ten years after the grant date. The Legacy TGC Plan terminated on March 29, 2016 and, since such time, has had no shares available for future issuance. Historically, the Company’s employees and officers that held unvested restricted stock were entitled to dividends when the Company paid dividends. The Company’s employees and officers that hold unvested restricted stock awarded during 2016 or thereafter are not entitled to dividends when the Company pays dividends. Impact of Stock-Based Compensation: The following table summarizes stock-based compensation expense (in thousands), which is included in operating or general and administrative expense, as appropriate, in the Consolidated Statements of Operations and Comprehensive Loss, for the years ended December 31, 2018, 2017 and 2016:
|  | Year Ended December 31, |
|  | 2018 |  | 2017 |  | 2016 |
Stock options |  | $ | — |  | $ | — |  | $ | 42 |
Restricted stock awards |  |  | 915 |  |  | 495 |  |  | 347 |
Restricted stock unit awards |  |  | 122 |  |  | 161 |  |  | 73 |
Common stock awards |  |  | 331 |  |  | 320 |  |  | 417 |
Total compensation expense |  | $ | 1,368 |  | $ | 976 |  | $ | 879 |
Stock Options: Legacy Dawson estimated the fair value of each stock option on the date of grant using the Black-Scholes option pricing model. Legacy TGC estimated the fair value of each stock option on the date of grant using the Binomial Lattice Model. Actual value realized with stock options, if any, is dependent on the future performance of the Company’s common stock and overall stock market conditions. A summary of the outstanding stock options as of December 31, 2018 as well as activity during the year then ended is as follows:
|  | Number of Stock Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term in Years |
|  | (as adjusted) |  | (as adjusted) |  |  |  |
Balance as of December 31, 2017 |  |  | 326,460 |  | $ | 11.79 |  |  |  |
Forfeited |  |  | (42,516) |  | $ | 12.48 |  |  |  |
Expired |  |  | (196,447) |  | $ | 11.88 |  |  |  |
Balance as of December 31, 2018 |  |  | 87,497 |  | $ | 11.23 |  |  | 0.58 |
Exercisable as of December 31, 2018 |  |  | 87,497 |  | $ | 11.23 |  |  | 0.58 |
Stock options issued under both the Legacy TGC plan and Legacy Dawson plans are a combination of incentive stock options and non-qualified stock options. For incentive stock options, no tax deduction is recorded when options are awarded. If an exercise and sale of vested options results in a disqualifying disposition, a tax deduction for the Company occurs. Outstanding options at December 31, 2018 expire in July 2019. The intrinsic value of the outstanding options at December 31, 2018 was zero. There were no unrecognized compensation costs related to stock options as of December 31, 2018. There were no options granted or vested, and there were no excess tax benefits from disqualifying dispositions during the years ended December 31, 2018, 2017 and 2016. No options were exercised during the years ended December 31, 2018, 2017 and 2016. No cash was received from option exercises during the years ended December 31, 2018, 2017 and 2016. Restricted Stock Awards: There were no restricted stock grants in the years ended December 31, 2018 and 2017. The Company granted 91,348 restricted stock awards during the year ended December 31, 2016 with a weighted average grant date fair value of $2.96. The fair value of restricted stock awards equals the market price of the Company’s stock on the grant date and the awards generally vest in one to three years or in annual increments over three years. A summary of the status of the Company’s nonvested restricted stock awards as of December 31, 2018 and activity during the year then ended is as follows:
|  | Number of Restricted Stock Awards |  | Weighted Average Grant Date Fair Value |
|  | (as adjusted) |  |  |  |
Nonvested as of December 31, 2017 |  |  | 74,724 |  | $ | 4.19 |
Vested |  |  | (8,750) |  | $ | 8.21 |
Nonvested as of December 31, 2018 |  |  | 65,974 |  | $ | 3.65 |
As of December 31, 2018, there were approximately $15,000 of unrecognized compensation costs related to nonvested restricted stock awards. These costs are expected to be recognized over a weighted average period of 0.13 years. The aggregate vesting date fair value of restricted stock for the years ended December 31, 2018 and 2017 was $48,000 and $84,000, respectively. There was no vesting of restricted stock for the year ended December 31, 2016. Restricted Stock Unit Awards: The Company granted 268,000, 238,350, and 206,220 restricted stock unit awards during the years ended December 31, 2018, 2017 and 2016, respectively, with a weighted average grant date fair value of $7.14, $3.96, and $2.96, respectively. The fair value of restricted stock unit awards equals the market price of the Company’s stock on the grant date and the awards generally vest in one to three years or in annual increments over three years. A summary of the Company’s nonvested restricted stock unit awards as of December 31, 2018 and activity during the year then ended is as follows:
|  | Number of Restricted Stock Unit Awards |  | Weighted Average Grant Date Fair Value |
|  | (as adjusted) |  |  |  |
Nonvested as of December 31, 2017 |  |  | 413,385 |  | $ | 3.60 |
Granted |  |  | 268,000 |  | $ | 7.14 |
Vested |  |  | (43,050) |  | $ | 4.40 |
Forfeited |  |  | (11,250) |  | $ | 5.63 |
Nonvested as of December 31, 2018 |  |  | 627,085 |  | $ | 5.03 |
As of December 31, 2018, there were approximately $1,868,000 of unrecognized compensation costs related to nonvested restricted stock unit awards. These costs are expected to be recognized over a weighted average period of 1.58 years. The aggregate vesting date fair value of restricted stock units for the years ended December 31, 2018, 2017, and 2016 was $273,000, $422,000, and $156,000, respectively. Common Stock Awards: The Company granted common stock awards with immediate vesting to outside directors and employees during the years ended December 31, 2018, 2017 and 2016 as follows:
|  | Number of Common Stock Awards |  | Weighted Average Grant Date Fair Value |
Year ended December 31, 2018 |  |  | 59,284 |  | $ | 5.59 |
Year ended December 31, 2017 |  |  | 67,498 |  | $ | 4.74 |
Year ended December 31, 2016 |  |  | 66,200 |  | $ | 6.31 |

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- Definition 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. + 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 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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