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Stock Compensation Plans | 9 Months Ended
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Sep. 30, 2015
Share-based Compensation [Abstract] |
Stock Compensation Plans | STOCK COMPENSATION PLANS The Company recorded stock compensation expense (credit) as follows for the three and nine months ended September 30, 2015 and 2014 (in millions):
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2015 |  | 2014 |  | 2015 |  | 2014
Cost of goods sold |  | $ | 0.3 |  |  | $ | (1.8 | ) |  | $ | 0.8 |  |  | $ | (1.0 | )
Selling, general and administrative expenses |  | 3.2 |  |  | (21.0 | ) |  | 10.1 |  |  | (9.8 | )
Total stock compensation expense (credit) |  | $ | 3.5 |  |  | $ | (22.8 | ) |  | $ | 10.9 |  |  | $ | (10.8 | )
Stock Incentive Plan Under the Company’s 2006 Long Term Incentive Plan (the “2006 Plan”), up to 10.0 million shares of AGCO common stock may be issued. The 2006 Plan allows the Company, under the direction of the Board of Directors’ Compensation Committee, to make grants of performance shares, stock appreciation rights, restricted stock units and restricted stock awards to employees, officers and non-employee directors of the Company. Employee Plans The weighted average grant-date fair value of performance awards granted under the 2006 Plan during the nine months ended September 30, 2015 and 2014 was $45.54 and $53.87, respectively. During the nine months ended September 30, 2015, the Company granted 724,752 awards related to the three-year performance period commencing in 2015 and ending in 2017, assuming the maximum target level of performance is achieved. In addition, in July 2015, the Company granted 136,934 performance awards under a new margin growth incentive plan, with a performance period of approximately six months through December 31, 2015. The new margin growth incentive plan provides for the award of shares of the Company’s common stock based on achieving an operating margin target as determined by the Company’s Board of Directors. No shares will be earned if performance is below the established target. The compensation expense associated with all awards granted under the 2006 Plan is amortized ratably over the vesting or performance period based on the Company’s projected assessment of the level of performance that will be achieved and earned. Performance award transactions during the nine months ended September 30, 2015 were as follows and are presented as if the Company were to achieve its maximum levels of performance under the plan:
Shares awarded but not earned at January 1 | 2,481,767 |
Shares awarded | 861,686 |
Shares forfeited or unearned | (53,671 | )
Shares earned | — |
Shares awarded but not earned at September 30 | 3,289,782 |
As of September 30, 2015, the total compensation cost related to unearned performance awards not yet recognized, assuming the Company’s current projected assessment of the level of performance that will be achieved and earned, was approximately $16.3 million, and the weighted average period over which it is expected to be recognized is approximately two years. During the nine months ended September 30, 2015, the Company granted 144,398 restricted stock unit (“RSU”) awards. These awards entitle the participant to receive one share of the Company’s common stock for each RSU granted and vest one-third per year over a three-year requisite service period. Dividends will accrue on all unvested grants until the end of each vesting date within the three-year requisite service period. The compensation expense associated with these awards is being amortized ratably over the requisite service period for the awards that are expected to vest. The weighted average grant-date fair value of the RSUs granted under the 2006 Plan during the nine months ended September 30, 2015 was $44.03. RSU transactions during the nine months ended September 30, 2015 were as follows:
Shares awarded but not vested at January 1 | — |
Shares awarded | 144,398 |
Shares forfeited | (3,100 | )
Shares vested | — |
Shares awarded but not vested at September 30 | 141,298 |
As of September 30, 2015, the total compensation cost related to the unvested RSUs not yet recognized was approximately $4.7 million, and the weighted average period over which it is expected to be recognized is approximately two years. During the three and nine months ended September 30, 2015, the Company recorded stock compensation expense of approximately $1.3 million and $3.8 million, respectively, associated with stock-settled appreciation rights (“SSAR”) awards. During the three and nine months ended September 30, 2014, the Company recorded stock compensation expense of approximately $1.3 million and $3.9 million, respectively, associated with SSAR awards. The Company estimated the fair value of the grants using the Black-Scholes option pricing model. The weighted average grant-date fair value of SSARs granted under the 2006 Plan and the weighted average assumptions under the Black-Scholes option pricing model were as follows for the nine months ended September 30, 2015 and 2014:
| Nine Months Ended September 30,
| 2015 |  | 2014
Weighted average grant-date fair value | $ | 7.41 |  |  | $ | 13.11 |
Weighted average assumptions under Black-Scholes option pricing model: |  |  |  |  |
Expected life of awards (years) | 3.0 |  |  | 3.0 |
Risk-free interest rate | 0.9 | % |  | 0.9 | %
Expected volatility | 25.9 | % |  | 35.7 | %
Expected dividend yield | 1.1 | % |  | 0.8 | %
SSAR transactions during the nine months ended September 30, 2015 were as follows:
SSARs outstanding at January 1 |  | 1,220,824 |
SSARs granted |  | 325,200 |
SSARs exercised |  | (56,300 | )
SSARs canceled or forfeited |  | (92,544 | )
SSARs outstanding at September 30 |  | 1,397,180 |
SSAR price ranges per share: |  |  |
Granted | $ | 43.88 |
Exercised |  | 21.45-52.94 |
Canceled or forfeited |  | 43.88-56.98 |
Weighted average SSAR exercise prices per share: |  |  |
Granted | $ | 43.88 |
Exercised |  | 27.27 |
Canceled or forfeited |  | 56.43 |
Outstanding at September 30 |  | 49.33 |
At September 30, 2015, the weighted average remaining contractual life of SSARs outstanding was approximately four years. As of September 30, 2015, the total compensation cost related to unvested SSARs not yet recognized was approximately $7.1 million, and the weighted-average period over which it is expected to be recognized is approximately two years. The following table sets forth the exercise price range, number of shares, weighted average exercise price and remaining contractual life by groups of similar price as of September 30, 2015:
|  | SSARs Outstanding |  | SSARs Exercisable
Range of Exercise Prices |  | Number of Shares |  | Weighted Average Remaining Contractual Life (Years) |  | Weighted Average Exercise Price |  | Number of Shares |  | Weighted Average Exercise Price
$21.45 – $32.01 |  | 15,500 |  |  | 0.6 |  | $ | 23.32 |  |  | 15,500 |  |  | $ | 23.32 |
$33.65 – $43.88 |  | 437,800 |  |  | 5.0 |  | $ | 41.24 |  |  | 115,175 |  |  | $ | 33.83 |
$47.89 – $63.64 |  | 943,880 |  |  | 4.1 |  | $ | 53.52 |  |  | 543,049 |  |  | $ | 52.96 |
|  | 1,397,180 |  |  |  |  |  |  | 673,724 |  |  |  |
The total fair value of SSARs vested during the nine months ended September 30, 2015 was approximately $4.1 million. There were 723,456 SSARs that were not vested as of September 30, 2015. The total intrinsic value of outstanding and exercisable SSARs as of September 30, 2015 was $2.7 million and $1.8 million, respectively. The total intrinsic value of SSARs exercised during the nine months ended September 30, 2015 was approximately $1.4 million. The Company realized an insignificant tax benefit from the exercise of these SSARs. Director Restricted Stock Grants The 2006 Plan provides for annual restricted stock grants of the Company’s common stock to all non-employee directors. All restricted stock grants made to the Company’s directors prior to April 24, 2014 were restricted as to transferability for a period of three years. Effective April 24, 2014, the shares granted on that date and all future grants made to the Company’s directors are restricted as to transferability for a period of one year. In the event a director departs from the Company’s Board of Directors, the non-transferability period expires immediately. The plan allows each director to have the option of forfeiting a portion of the shares awarded in connection with the payment of withholding taxes. The 2015 grant was made on April 23, 2015 and equated to 22,095 shares of common stock, of which 15,711 shares of common stock were issued after shares were withheld for taxes. The Company recorded stock compensation expense of approximately $1.1 million during the nine months ended September 30, 2015 associated with these grants. As of September 30, 2015, of the 10.0 million shares reserved for issuance under the 2006 Plan, approximately 2.4 million shares were available for grant, assuming the maximum number of shares are earned related to the performance award grants discussed above.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51659978&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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