EQUITY COMPENSATION PLANS

In June 2014, the Company's stockholders adopted the Platform Specialty Products Corporation Amended and Restated 2013 Incentive Compensation Plan. The 2013 Plan is administered by the compensation committee of the Board, except as otherwise provided in the 2013 Plan. The Board approved a maximum of 15,500,000 shares of common stock (subject to increase in accordance with the terms of the 2013 Plan), which were reserved and made available for issuance under the 2013 Plan. As of December 31, 2015, a total of 365,792 shares of common stock had been issued and 831,436 RSUs were outstanding under the 2013 Plan.



	Total		RSUs				Stock Options
	Total		Equity Classified		Liability Classified		Stock Options
Outstanding as of December 31, 2013	250,000		—		—		250,000
Granted	481,175		151,352		329,823		—
Exercised/Issued	(9,242	)	(9,242	)	—		—
Forfeited	—		—		—		—
Outstanding as of December 31, 2014	721,933		142,110		329,823		250,000
Granted	666,662		453,260		213,402		—
Exercised/Issued	(77,500	)	(2,500	)	—		(75,000	)
Forfeited	(304,659	)	(91,236	)	(213,423	)	—
Outstanding as of December 31, 2015	1,006,436		501,634		329,802		175,000

Equity Classified Share Based Payments

2015 Activity

During the year ended December 31, 2015, the Board approved grants totaling 445,618 RSUs under the 2013 Plan to certain employees of the Company, with grant-date fair values ranging from $12.74 to $27.05 per unit and vesting periods ranging from 33 months to 63.5 months. Of these RSUs, 209,290 RSUs are subject to performance conditions that must be achieved in the applicable vesting year and 221,287 RSUs are subject to market conditions, of which 187,597 include a multiplier from zero to three times depending upon the Company's cumulative average growth rate during a 5 year performance measurement period. During the year ended December 31, 2015, 91,236 RSUs were forfeited, and 2,500 RSUs vested, resulting in the issuance of 2,500 shares.

During the year ended December 31, 2015, the Board also approved grants to certain directors of the Company under the 2013 Plan totaling 7,642 RSUs with a grant-date fair value of $27.05. The RSUs will vest on March 17, 2016, provided that such directors continue to serve as directors of the Company through the vesting date. Each RSU represents a contingent right to receive one share of Platform common stock.

2014 Activity

During the year ended December 31, 2014, the Board approved grants totaling 139,610 RSUs under the 2013 Plan to certain employees of the Company and 2,500 RSUs to certain non-employees, with grant-date fair values ranging from $20.97 to $28.36 per share. Vesting periods range from 38 to 69 months for RSUs issued to employees, and 10 months for those issued to non-employees. The RSUs are subject to an EBITDA performance condition that must be achieved in the final vesting year.

During the year ended December 31, 2014, the Board also approved grants totaling 9,242 RSUs under the 2013 Plan to certain directors of the Company which vested on June 12, 2014, the date of the Company's 2014 annual meeting of stockholders. On July 31, 2014, such RSUs were settled in 9,242 shares of common stock which were issued to such directors.

For the years ended December 31, 2015 and 2014, expense associated with RSUs classified as equity totaled $0.8 million and $0.8 million, respectively.

Liability Classified Share Based Payments

2015 Activity

During the year ended December 31, 2015, the Board approved a grant of 213,402 RSUs with a grant-date fair value of $23.43 per unit that cliff vest at the end of a 24-month period, and were subject to certain performance conditions. The undiscounted maximum cash value totaled approximately $5.0 million which was being recognized as compensation expense over the period from grant to the vesting date. As of December 31, 2015, all RSUs under this award were forfeited.

2014 Activity

During the year ended December 31, 2014, the Board approved a grant of 329,823 RSUs under the 2013 Plan to certain employees that cliff vest on December 31, 2020. The RSUs are subject to an EBITDA performance condition and a share price market condition. The combined undiscounted maximum cash value totaled approximately $7.1 million which is being recognized as compensation expense over the period from grant to the vesting date.

For the years ended December 31, 2015 and 2014, compensation (income) expense associated with these awards totaled $(0.1) million and $0.6 million, respectively.

Stock Options

During the year ended December 31, 2013, MacDermid issued an aggregate 250,000 option deeds to its non-founder directors with an exercise price of $11.50 per share which vested as of the completion of the MacDermid Acquisition and expire 5 years from the date of the MacDermid Acquisition.

The Company estimates the fair value of stock option grants using a Black-Scholes option pricing model. In applying this model, the Company used the following assumptions:


•	Risk-Free Interest Rate: The Company determined the risk-free interest rate equivalent to the expected term based on the U.S. Treasury constant maturity rate.


•	Expected Term: The Company determined the expected term equal to the life of the contract.


•	Expected Dividend Rate: The Company has not paid and does not anticipate paying any cash dividends in the near future.

Utilizing the Black-Scholes option pricing model, the following assumptions were used: exercise price of $11.50 per share, expected stock price volatility of 18.49%, risk free rate of interest of 0.37% and an expected life of options of 5 years. The options vested on October 31, 2013, the date of the MacDermid acquisition, with a weighted average remaining contractual life of 4.4 years. Stock based compensation expense from option deeds was $0.2 million for the Successor 2013 Period.

During the year ended December 31, 2015, an option to acquire 75,000 ordinary shares was exercised by a former non-founder director and 75,000 shares of Platform's common stock were issued on March 19, 2015.

Long Term Cash Bonus Plan

During the year ended December 31, 2015, the Company established the LTCB under the 2013 Plan. As of December 31, 2015, the plan provides participants the right to receive bonuses totaling $15.3 million. Benefits under the plan vest over periods ranging from 31 to 60 months and include EBITDA performance targets, subject to appropriate and equitable adjustments by the Board's compensation committee to reflect any subsequent acquisition, divestiture or other corporate reorganizations, as necessary.

For the year ended December 31, 2015, compensation expense associated with the LTCB totaled $0.1 million.

Employee Stock Purchase Plan

Effective March 6, 2014, the Board adopted the ESPP, which was approved by the Company’s stockholders in June 2014. The Board approved a maximum of 5,178,815 shares of common stock, which were reserved and made available for issuance under the ESPP. As of December 31, 2015, a total of 55,500 shares had been issued under the ESPP, and approximately 800 persons were eligible to participate in the ESPP.

For the year ended December 31, 2015, compensation expense associated with the ESPP totaled $0.1 million. For the year ended December 31, 2014, such compensation expense was de minimis.

Predecessor Period

On January 29, 2013, the Predecessor authorized for issuance 5,000,000 C Shares, of which 4,890,000 shares were issued and awarded. The value of the C Shares was measured based upon the performance criteria in the operating agreement of MacDermid Holdings based on the estimated equity value of the Predecessor. The C Shares were to be paid in cash in accordance with the operating agreement of MacDermid Holdings upon a change in control, liquidating event or initial public offering. The C Shares were considered liability-classified awards, with the related fair value recognized as compensation expense ratably over the performance period, with changes in the fair value of the award cumulatively adjusted through compensation expense each period. During the Predecessor 2013 Period, $9.0 million was recognized as compensation expense related to the C Shares as a result of the change in control associated with the MacDermid Acquisition.