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Share Based Compensation Plans | 12 Months Ended
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Dec. 31, 2019
Disclosure Of Terms And Conditions Of Sharebased Payment Arrangement [Abstract] |
Share Based Compensation Plans | NOTE 14. SHARE BASED COMPENSATION PLANS In May 2017 shareholders approved an omnibus equity incentive plan (Omnibus Plan) that allows the Corporation to settle short-term incentive awards (annual bonus) and long-term incentive awards (options, performance share units and restricted share units) issued on or after February 8, 2017 in voting shares of Precision (either issued from treasury or purchased in the open market), cash, or a combination of both. Precision intends to settle all short-term incentive, restricted share unit and non-executive performance share unit awards issued under the Omnibus Plan in cash and to settle performance share awards issued to senior executives and all options in voting shares. No further grants will be made under the legacy stock option plan, performance share unit plan or restricted share unit plan. Liability Classified Plans
|  | Restricted Share Units |  | Performance Share Units |  | Non- Management Directors’ DSUs |  | Total |  |
Balance, December 31, 2017 |  | $ | 6,950 |  | $ | 11,407 |  | $ | 3,512 |  | $ | 21,869 |
Expensed during the period |  |  | 5,223 |  |  | 398 |  |  | 769 |  |  | 6,390 |
Payments |  |  | (6,764 | ) |  | (7,284 | ) |  | (1,800 | ) |  | (15,848 | )
Balance, December 31, 2018 |  |  | 5,409 |  |  | 4,521 |  |  | 2,481 |  |  | 12,411 |
Expensed during the period |  |  | 5,755 |  |  | 1,583 |  |  | 855 |  |  | 8,193 |
Payments |  |  | (3,846 | ) |  | (3,246 | ) |  | — |  |  | (7,092 | )
Balance, December 31, 2019 |  | $ | 7,318 |  | $ | 2,858 |  | $ | 3,336 |  | $ | 13,512 |
Current |  | $ | 3,956 |  | $ | 726 |  | $ | — |  | $ | 4,682 |
Long-term |  |  | 3,362 |  |  | 2,132 |  |  | 3,336 |  |  | 8,830 |
|  | $ | 7,318 |  | $ | 2,858 |  | $ | 3,336 |  | $ | 13,512 |
(a) Restricted Share Units and Performance Share Units Precision has two cash-settled share based incentive plans for officers and other eligible employees. Under the Restricted Share Unit (RSU) incentive plan, shares granted to eligible employees vest annually over a three-year term. Vested shares are automatically paid out in cash at a value determined by the fair market value of the shares at the vesting date. Under the Performance Share Unit (PSU) incentive plan, shares granted to eligible employees vest at the end of a three-year term. Vested shares are automatically paid out in cash in the first quarter following the vested term at a value determined by the fair market value of the shares at the vesting date and based on the number of performance shares held multiplied by a performance factor that ranges from zero to two times. The performance factor is based on Precision’s share price performance compared to a peer group over the three-year period. A summary of the RSUs and PSUs outstanding under these share based incentive plans is presented below:
|  | RSUs Outstanding |  |  | PSUs Outstanding |
December 31, 2017 |  |  | 2,796,858 |  |  |  | 5,726,259 |
Granted |  |  | 2,918,912 |  |  |  | 1,292,550 |
Redeemed |  |  | (1,404,284 | ) |  |  | (2,137,163 | )
Forfeited |  |  | (255,572 | ) |  |  | (338,656 | )
December 31, 2018 |  |  | 4,055,914 |  |  |  | 4,542,990 |
Granted |  |  | 4,187,350 |  |  |  | 2,038,900 |
Redeemed |  |  | (1,505,683 | ) |  |  | (1,322,758 | )
Forfeited |  |  | (399,518 | ) |  |  | (1,923,782 | )
December 31, 2019 |  |  | 6,338,063 |  |  |  | 3,335,350 |
(b) Non-Management Directors Precision has a deferred share unit (DSU) plan for non-management directors whereby fully vested DSUs are granted quarterly based on an election by the non-management director to receive all or a portion of his or her compensation in DSUs. These DSUs are redeemable in cash or for an equal number of common shares upon the director’s retirement. The redemption of DSUs in cash or common shares is solely at Precision’s discretion. Non-management directors can receive a lump sum payment or two separate payments any time up until December 15 of the year following retirement. If the non-management director does not specify a redemption date, the DSUs will be redeemed on a single date six months after retirement. The cash settlement amount is based on the weighted average trading price for Precision’s shares on the Toronto Stock Exchange for the five days immediately prior to payout. A summary of the DSUs outstanding under this share based incentive plan is presented below:
Deferred Share Units |  | Outstanding |
Balance December 31, 2017 |  |  | 953,277 |
Granted |  |  | 474,766 |
Redeemed |  |  | (374,408 | )
Balance December 31, 2018 |  |  | 1,053,635 |
Granted |  |  | 738,619 |
Balance December 31, 2019 |  |  | 1,792,254 |
Equity Settled Plans (c) Option Plan Under this plan, the exercise price of each option equals the fair market value of the option at the date of grant determined by the weighted average trading price for the five days preceding the grant. The options are denominated in either Canadian or U.S. dollars, and vest over a period of three years from the date of grant, as employees render continuous service to the Corporation, and have a term of seven years. A summary of the status of the equity incentive plan is presented below:
Canadian Share Options |  | Options Outstanding |  |  | Range of Exercise Prices |  | Weighted Average Exercise Price |  |  | Options Exercisable |
December 31, 2017 |  |  | 4,900,360 |  |  | $ 4.46 – 14.50 |  | $ | 8.50 |  |  |  | 3,734,019 |
Granted |  |  | 490,200 |  |  | 4.35 – 4.35 |  |  | 4.35 |  |  |  |  |
Forfeited |  |  | (657,404 | ) |  | 10.44 – 14.50 |  |  | 10.58 |  |  |  |  |
December 31, 2018 |  |  | 4,733,156 |  |  | 4.35 – 14.31 |  |  | 7.78 |  |  |  | 3,786,473 |
Forfeited |  |  | (711,572 | ) |  | 7.15 – 10.67 |  |  | 10.51 |  |  |  |  |
December 31, 2019 |  |  | 4,021,584 |  |  | $ 4.35 – 14.31 |  | $ | 7.29 |  |  |  | 3,569,069 |
U.S. Share Options | Options Outstanding |  |  | Range of Exercise Prices (US$) |  | Weighted Average Exercise Price (US$) |  |  | Options Exercisable |
December 31, 2017 |  | 5,558,621 |  |  | $ 3.21 – 15.21 |  | $ | 6.16 |  |  |  | 2,891,808 |
Granted |  | 1,569,250 |  |  | 3.44 – 3.62 |  |  | 3.45 |  |  |  |  |
Exercised |  | (66,000 | ) |  | 3.21 – 3.21 |  |  | 3.21 |  |  |  |  |
Forfeited |  | (996,021 | ) |  | 3.21 – 15.21 |  |  | 8.08 |  |  |  |  |
December 31, 2018 |  | 6,065,850 |  |  | 3.21 – 10.74 |  |  | 5.17 |  |  |  | 3,224,078 |
Granted |  | 599,300 |  |  | 2.56 – 2.56 |  |  | 2.56 |  |  |  |  |
Forfeited |  | (302,100 | ) |  | 7.79 – 10.74 |  |  | 10.68 |  |  |  |  |
December 31, 2019 |  | 6,363,050 |  |  | $ 2.56 – 9.18 |  | $ | 4.67 |  |  |  | 4,348,824 |
No options were exercised in 2019. The weighted average share price at the date of exercise for the U.S. share options exercised in 2018 was US$4.02.
Canadian Share Options |  | Total Options Outstanding |  |  | Options Exercisable |
Range of Exercise Prices: |  | Number |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (Years) |  |  | Number |  |  | Weighted Average Exercise Price |
$ 4.35 – 6.99 |  |  | 1,105,400 |  |  | $ | 4.41 |  |  |  | 4.04 |  |  |  | 778,595 |  |  | $ | 4.44 |
7.00 – 8.99 |  |  | 1,533,334 |  |  |  | 7.32 |  |  |  | 2.59 |  |  |  | 1,407,624 |  |  |  | 7.32 |
9.00 – 14.31 |  |  | 1,382,850 |  |  |  | 9.57 |  |  |  | 0.56 |  |  |  | 1,382,850 |  |  |  | 9.57 |
$ 4.35 – 14.31 |  |  | 4,021,584 |  |  | $ | 7.29 |  |  |  | 2.29 |  |  |  | 3,569,069 |  |  | $ | 7.56 |
U.S. Share Options |  | Total Options Outstanding |  |  | Options Exercisable |
Range of Exercise Prices (US$): |  | Number |  |  | Weighted Average Exercise Price (US$) |  |  | Weighted Average Remaining Contractual Life (Years) |  |  | Number |  |  | Weighted Average Exercise Price (US$) |
$ 2.56 – 3.99 |  |  | 3,646,250 |  |  | $ | 3.21 |  |  |  | 4.50 |  |  |  | 2,011,540 |  |  | $ | 3.27 |
4.00 – 6.99 |  |  | 1,924,500 |  |  |  | 5.61 |  |  |  | 3.37 |  |  |  | 1,544,984 |  |  |  | 5.62 |
7.00 – 9.18 |  |  | 792,300 |  |  |  | 9.08 |  |  |  | 0.60 |  |  |  | 792,300 |  |  |  | 9.08 |
$ 2.56 – 9.18 |  |  | 6,363,050 |  |  | $ | 4.67 |  |  |  | 3.67 |  |  |  | 4,348,824 |  |  | $ | 5.17 |
The per option weighted average fair value of the share options granted during 2019 was $1.54 (2018 – $1.96) estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: average risk-free interest rate of 2.5% (2018 – 2%), average expected life of four years (2018 – four years), expected forfeiture rate of 5% (2018 – 5%) and expected volatility of 57% (2018 – 56%). Included in net earnings for the year ended December 31, 2019 is an expense of $2 million (2018 – $3 million). (d) Executive Performance Share Units Precision grants PSUs to certain senior executives with the intention of settling them in voting shares of the Corporation either issued from treasury or purchased in the open market. These PSUs vest over a three year period and incorporate performance criteria established at the date of grant that can adjust the number of performance share units available for settlement from zero to two times the amount originally granted. A summary of the activity under this share based incentive plan is presented below:
Executive Performance Share Units |  | Outstanding |  |  | Weighted Fair Value |
December 31, 2017 |  |  | 1,159,000 |  |  | $ | 6.00 |
Granted |  |  | 2,082,800 |  |  |  | 6.22 |
Forfeited |  |  | (50,733 | ) |  |  | 6.12 |
December 31, 2018 |  |  | 3,191,067 |  |  |  | 6.14 |
Granted |  |  | 4,211,600 |  |  |  | 4.11 |
Forfeited |  |  | (25,767 | ) |  |  | 6.02 |
December 31, 2019 |  |  | 7,376,900 |  |  |  | 4.98 |
The per unit weighted average fair value of the performance share units granted during 2019 was $4.11 (2018 – $6.22) estimated on the grant date using a Monte Carlo simulation and Black-Scholes option pricing model with the following assumptions: share price of $3.23 (2018 – $4.29), average risk-free interest rate of 2.3% (2018 – 2.3%), average expected life of three years (2018 – three years), average expected volatility of 56% (2018 – 59%), and an expected dividend yield of nil (2018 – nil). Included in net earnings for year ended December 31, 2019 is an expense of $12 million (2018 - $6 million). (e) Non-Management Directors Prior to January 1, 2012, Precision had a deferred share unit plan for non-management directors. Under the plan, fully vested deferred share units were granted quarterly based on an election by the non-management director to receive all or a portion of his or her compensation in deferred share units. These deferred share units are redeemable into an equal number of common shares any time after the director’s retirement. A summary of this share based incentive plan is presented below:
Deferred Share Units |  | Outstanding |
December 31, 2017 |  |  | 195,743 |
Redeemed |  |  | (102,570 | )
December 31, 2018 and 2019 |  |  | 93,173 |
Employee Share Purchase Plan The Corporation has an employee share purchase plan to encourage employees to become Precision shareholders and to attract and retain people. Under the plan, eligible employees can contribute up to 10% of their regular base salary through payroll deduction with Precision matching 20% of the employee’s contribution. These contributions are used to purchase the Corporation’s shares in the open market. No vesting conditions apply. During 2019, the Corporation recorded compensation expense of $1 million (2018 – $1 million) related to this plan.

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