Cobalt International Energy, Inc.
Notes to Consolidated Financial Statements (Continued)
F-28
14. Equity based Compensation (Continued)
A summary of the stock option activities for the year ended December 31, 2015 is presented below:
Shares
Weighted
Average
Exercise
Price
Weighted-Average
Remaining
Contractual Term
(years)
Aggregate
Intrinsic Value
(thousands)
Outstanding at January 1, 2015 ...................
3,136,547 $
19.52
7.6 $
—
Granted........................................................
746,268 $
7.90
Exercised .....................................................
— $
—
$
—
Forfeited or expired .....................................
(115,874) $
19.33
Outstanding at December 31, 2015 .............
3,766,941 $
17.23
7.02 $
—
Vested or expected to vest at December 31,
2015..........................................................
1,879,599 $
15.21
8.27 $
—
Exercisable at December 31, 2015 ..............
1,850,995 $
19.32
5.73 $
—
The weighted-average grant-date fair value of stock options granted during 2015 and 2014 was $4.64 and $9.12 per option,
respectively, using the Black-Scholes option-pricing model. As of December 31, 2015, $8.3 million of total unrecognized
compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.41 years.
Restricted Stock Units.
On December 3, 2010, the Company granted 198,838 restricted stock units to employees pursuant to a
Restricted Stock Unit (RSU) Award Agreement. Under the RSU Award Agreement, the share-based payment was earned based on the
number of successful wells drilled during the three year period ending December 31, 2013. The RSU award vested within a range of
0% to 200% of the number of RSU shares awarded on scheduled vesting dates contingent upon the recipient’s continued service at
each vesting date and based on the achievement of successful wells drilled as defined in the RSU Award Agreement. The recipients
could not vest in an amount greater than 200% of the award or in aggregate 397,676 RSU shares. The percentage of the RSU awards
vested at each of the three year periods ending December 31, 2013 was calculated by the number of successful wells drilled during the
respective years multiplied by vesting percentages ranging from 25% to 37.5%. As of December 31, 2014, the RSU shares were fully
vested.
A summary of the restricted stock units activities for the years ended December 31, 2015, 2014 and 2013 is presented below:
Year Ended December 31,
2015
2014
2013
Number of
shares
relating
Restricted
Stock Units
Weighted
Average
Grant Date
Fair Value
Per Unit
Number of
shares
relating
Restricted
Stock Units
Weighted
Average
Grant Date
Fair Value
Per Unit
Number of
shares
relating
Restricted
Stock Units
Weighted
Average
Grant Date
Fair Value
Per Unit
Non-vested at beginning of year ..................................
— $
— 21,624 $ 30.50 109,275 $ 30.50
Granted.........................................................................
—
—
—
—
—
—
Vested ..........................................................................
— $
— (21,624) $ 30.50 (87,401) $ 30.50
Forfeited or expired......................................................
—
—
—
—
(250) $ 30.50
Non-vested at end of year ............................................
—
—
—
— 21,624 $ 30.50
Weighted-average period remaining ............................
—
—
—
Stock Appreciation Rights.
On February 20, 2015, the Company issued a total of 1,526,835 share appreciation rights
(“SARs”) under the Company’s Long Term Incentive Plan (the “Plan”) to the Company’s officers, based on the common stock market
price at the time of issuance of $8.87 per share. The SARs will vest with respect to one-third (1/3) of the underlying shares on each
anniversary of the grant date over the next three years and may be settled, at the Company’s discretion, by issuance of the Company’s
shares or by cash or by a combination of the Company’s shares and cash based on the fair market value of the shares on the date of
exercise. The fair value of a SAR is determined using the Black-Scholes-Merton option-pricing model which at the date of grant was
$4.53 per SAR share. The Company accounts for the SAR awards as compensation cost and records a corresponding liability based
on the fair value of the SARs at the end of each reporting period.
