SEC Filings

10-Q
RANGE RESOURCES CORP filed this Form 10-Q on 10/23/2018
Entire Document
 

compensation plan is directly tied to the change in our stock price and not directly related to the functional expenses and therefore, is not allocated to the functional categories. The following details the allocation of stock-based compensation to functional expense categories (in thousands):

 

 

Three Months Ended

September 30,

 

 

 

Nine Months Ended

September 30,

 

 

2018

 

 

 

2017

 

 

 

2018

 

 

 

2017

 

Direct operating expense

$

537

 

 

$

517

 

 

$

1,667

 

 

$

1,563

 

Brokered natural gas and marketing expense

 

403

 

 

 

389

 

 

 

1,001

 

 

 

1,040

 

Exploration expense

 

405

 

 

 

561

 

 

 

1,527

 

 

 

1,596

 

General and administrative expense

 

5,607

 

 

 

9,959

 

 

 

38,332

 

 

 

35,156

 

Termination costs

 

 

 

 

(31

)

 

 

 

 

 

1,665

 

Total stock-based compensation

$

6,952

 

 

$

11,395

 

 

$

42,527

 

 

$

41,020

 

 

Stock-Based Awards

Restricted Stock Awards. We grant restricted stock units under our equity-based stock compensation plan. These restricted stock units, which we refer to as restricted stock Equity Awards, generally vest over a three year period, contingent on the recipient’s continued employment. The grant date fair value of the Equity Awards is based on the fair market value of our common stock on the date of grant.

The Compensation Committee also grants restricted stock to certain employees and non-employee directors of the board of directors as part of their compensation. We also grant restricted stock to certain employees for retention purposes. Compensation expense is recognized over the balance of the vesting period, which is typically three years for employee grants and immediate vesting for non-employee directors. All restricted stock awards are issued at prevailing market prices at the time of the grant and the vesting is based upon an employee’s continued employment with us. Prior to vesting, all restricted stock awards have the right to vote such stock and receive dividends thereon. Upon grant of these restricted shares, which we refer to as restricted stock Liability Awards, the majority of these shares are generally placed in our deferred compensation plan and, upon vesting, withdrawals are allowed in either cash or in stock. These Liability Awards are classified as a liability and are remeasured at fair value each reporting period. This mark-to-market amount is reported in deferred compensation plan expense in the accompanying consolidated statements of operations. Historically, we have used authorized but unissued shares of stock when restricted stock is granted. However, we also utilize treasury shares when available.

Stock-Based Performance Units. We grant three types of performance share awards:  two based on performance conditions measured against internal performance metrics (Production Growth Awards or “PG-PSUs” and Reserve Growth Awards or “RG-PSUs”) and one based on market conditions measured based on Range’s performance relative to a predetermined peer group (TSR Awards or “TSR-PSUs”).

Each unit granted represents one share of our common stock. These units are settled in stock and the amount of the payout is based on (1) the vesting percentage, which can be from zero to 200% based on performance achieved and (2) the value of our common stock on the vesting date which is determined by the Compensation Committee. Dividend equivalents may accrue during the performance period and would be paid in stock at the end of the performance period. The performance period for the TSR-PSUs is three years. The performance period for the PG/RG-PSUs is based on annual performance targets earned over a three-year period.

SARs. At September 30, 2018, there were 1,104 SARs outstanding.

24