XML 68 R10.htm IDEA: XBRL DOCUMENT v2.4.0.6
Stock-Based Compensation
 3 Months Ended
Jun. 30, 2012
Stock-Based Compensation [Abstract]  
Stock-Based Compensation
Note 4: Stock-Based Compensation

Stock-based compensation consists of stock options, restricted stock granted for retention and performance and discretionary unrestricted stock.  Compensation cost is calculated based on the fair value of the instrument at the time of grant, and is recognized as expense over the vesting period of the stock-based instrument.  Modine recognized stock-based compensation cost of $893 and $843 for the three months ended June 30, 2012 and 2011, respectively.  The performance component of awards granted under the long-term incentive plan during the first quarter of fiscal 2013 is based on consolidated target return on average capital employed (ROACE) (weighted at 50 percent), cumulative revenue over the three year performance period (weighted at 25 percent), and a target European ROACE at the end of the three year performance period (weighted at 25 percent).  The Company currently considers the attainment of the consolidated ROACE and European ROACE to be probable.  ROACE is defined as operating income adjusted to exclude unusual, non-recurring or extraordinary non-cash charges and cash restructuring and repositioning charges, multiplied by 70 percent to account for an assumed 30 percent income tax rate, and further adjusted to exclude earnings (or losses) attributable to minority shareholders; divided by total debt plus shareholders' equity.  Cumulative revenue is the Company's total revenue over the performance period.  European ROACE is defined as the Original Equipment - Europe segment  (Europe Segment) operating income, less research and development charges to the Company's corporate and administrative expenses, adjusted to exclude all unusual, non-recurring or extraordinary non-cash charges and cash restructuring and repositioning charges, multiplied by 70 percent to account for an assumed 30 percent income tax rate; divided by Europe Segment total assets, less cash and cash equivalents and Europe Segment total liabilities, excluding debt.

The following table presents, by type, the fair market value of stock-based compensation awards granted during the three months ended June 30, 2012:

 
Number
 
 
Fair Value
 
Type of award
 
Granted
 
 
Per Award
 
Common stock options
 
 
238.3
 
 
$
4.23
 
Restricted common stock - retention
 
 
352.7
 
 
$
5.75
 
Restricted common stock - performance
 
 
352.7
 
 
$
5.75
 

The accompanying table sets forth the assumptions used in determining the fair value for the options granted during the three months ended June 30, 2012:

Expected life of awards in years
 
 
6.3
 
Risk-free interest rate
 
 
0.86
%
Expected volatility of the Company's stock
 
 
87.35
%
Expected dividend yield on the Company's stock
 
 
0.00
%

As of June 30, 2012, the total remaining unrecognized compensation cost related to the non-vested stock-based compensation awards, which will be amortized over the weighted average remaining service periods, is as follows:

 
Type of award
 
Unrecognized Compenstion Costs
 
 
Weighted Average Remaining Service Period in Years
 
Common stock options
 
$
1,590
 
 
 
2.3
 
Restricted common stock - retention
 
 
3,588
 
 
 
3.5
 
Restricted common stock - performance
 
 
1,565
 
 
 
2.6
 
Total
 
$
6,743
 
 
 
2.8