XML 80 R19.htm IDEA: XBRL DOCUMENT
v3.19.3

Stock Plans | 9 Months Ended
--- | ---
Sep. 30, 2019
Share-based Payment Arrangement [Abstract] |
Stock Plans | Stock Plans The 2016 Management Equity Incentive Plan provides for various forms of stock-based compensation for eligible key employees through May 2026. Management stock-based compensation includes stock options, restricted stock, restricted stock units and performance stock units. Additionally, 2019 amounts granted include outstanding Sierra Monitor Corporation awards converted into MSA awards after the merger and acquisition. See Note 19—Acquisitions for more information. The 2017 Non-Employee Directors’ Equity Incentive Plan provides for grants of stock options and restricted stock to non-employee directors through May 2027. We issue treasury shares for stock option exercises, and grants of restricted stock and performance stock. Please refer to Note 7—Capital Stock for further information regarding stock compensation share issuance. Stock compensation expense is as follows:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) |  | 2019 |  | 2018 |  | 2019 |  | 2018
Stock compensation expense |  | $ | 4,044 |  |  | $ | 1,904 |  |  | $ | 10,130 |  |  | $ | 9,595 |
Income tax benefit |  | 987 |  |  | 463 |  |  | 2,472 |  |  | 2,332 |
Stock compensation expense, net of income tax benefit |  | $ | 3,057 |  |  | $ | 1,441 |  |  | $ | 7,658 |  |  | $ | 7,263 |
Stock options are granted at market value option prices and expire after ten years. Stock options are exercisable beginning three years after the grant date. Stock option expense is based on the fair value of stock option grants estimated on the grant dates using the Black-Scholes option pricing model and the following weighted average assumptions for options granted in 2019.
|  | 2019
Fair value per option |  | $ | 59.07 |
Risk-free interest rate |  | 2.3 | %
Expected dividend yield |  | 1.7 | %
Expected volatility |  | 31 | %
Expected life (years) |  | 6.4 |
The risk-free interest rate is based on the the U.S. Treasury yield curve. Expected dividend yield is based on the most recent annualized dividend divided by the 1 year average closing share price. Expected volatility is based on the historical volatility using daily stock prices. Expected life is based on historical stock option exercise data. A summary of stock option activity for the nine months ended September 30, 2019, follows:
|  | Shares |  | Weighted Average Exercise Price
Outstanding at January 1, 2019 |  | 735,001 |  |  | $ | 43.79 |
Granted (Note 19) |  | 23,285 |  |  | 43.54 |
Exercised |  | (109,501 | ) |  | 38.96 |
Forfeited |  | (95 | ) |  | 49.19 |
Outstanding at September 30, 2019 |  | 648,690 |  |  | 44.59 |
Exercisable at September 30, 2019 |  | 640,683 |  |  | $ | 44.58 |
Restricted stock and restricted stock units are valued at the market value of the stock on the grant date. A summary of restricted stock and unit activity for the nine months ended September 30, 2019, follows:
|  | Shares |  | Weighted Average Grant Date Fair Value
Unvested at January 1, 2019 |  | 205,449 |  |  | $ | 68.97 |
Granted |  | 67,808 |  |  | 103.75 |
Vested |  | (72,539 | ) |  | 52.32 |
Forfeited |  | (4,559 | ) |  | 80.05 |
Unvested at September 30, 2019 |  | 196,159 |  |  | $ | 87.19 |
Performance stock units have a market condition modifier and are valued at an estimated fair value using the Monte Carlo model. The final number of shares to be issued for performance stock units granted in the first quarter of 2019 may range from 0% to 200% of the target award based on achieving the specified performance targets over the performance period plus an additional payout modifier based on total shareholder return (TSR) performance. The following weighted average assumptions were used in the Monte Carlo model for units granted in the first quarter of 2019 with a market condition modifier.
Fair value per unit | $99.82
Risk-free interest rate | 2.47%
Expected dividend yield | 1.57%
Expected volatility | 26.6%
MSA stock beta | 1.094
The risk-free interest rate is based on the U.S. Treasury Constant Maturity rates as of the grant date converted into an implied spot rate yield curve. Expected dividend yield is based on the most recent annualized dividend divided by the one year average closing share price. Expected volatility is based on the ten year historical volatility using daily stock prices. Expected life is based on historical stock option exercise data. A summary of performance stock unit activity for the nine months ended September 30, 2019, follows:
|  | Shares |  | Weighted Average Grant Date Fair Value
Unvested at January 1, 2019 |  | 218,886 |  |  | $ | 68.43 |
Granted |  | 83,819 |  |  | 101.03 |
Performance adjustments |  | 76,960 |  |  | 44.24 |
Vested |  | (139,478 | ) |  | 44.75 |
Unvested at September 30, 2019 |  | 240,187 |  |  | $ | 85.52 |
The performance adjustments above relate primarily to the final number of shares issued for the 2016 Management Performance Units which vested in the first quarter of 2019 at 237.6% of the target award based on cumulative performance against the Operating Margin % and Revenue Growth targets with a payout modifier based upon MSA's Total Shareholder Return during the three year performance period.

X
- Definition The entire disclosure for share-based payment arrangement. + 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 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration