Share Based Compensation Plans

12 Months Ended

Dec. 31, 2022

Disclosure of terms and conditions of share-based payment arrangement [abstract]

NOTE 13.

SHARE-BASED COMPENSATION PLANS

Precision’s omnibus equity incentive plan (

Omnibus Plan

) allows the Corporation to settle short-term incentive awards (annual bonus) and long-term incentive awards (share 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 performance share unit awards issued under the Omnibus Plan in cash and to settle options in voting share

Liability Classified Plans


	Restricted Share Units			Performance Share Units			Executive Performance Share Units			Non- Management Directors’ DSUs		Total
Balance, December 31, 2020	$	6,624		$	4,751		$	6,833		$	1,609	$	19,817
Expensed during the period		17,168			18,634			17,646			3,065		56,513
Reclassification from equity-settled plans		—			—			(3,164	)		—		(3,164	)
Payments		(5,742	)		(1,861	)		(4,808	)		—		(12,411	)
Balance, December 31, 2021		18,050			21,524			16,507			4,674		60,755
Expensed during the period		34,555			87,297			4,172			7,623		133,647
Settlement in shares		—			—			(14,083	)		—		(14,083	)
Reclassification from equity-settled plans		—			—			(406	)		—		(406	)
Payments		(14,372	)		(7,960	)		(6,190	)		—		(28,522	)
Foreign exchange		(43	)		(3	)		—			—		(46	)
Balance, December 31, 2022	$	38,190		$	100,858		$	—		$	12,297	$	151,345
Current		26,330			64,882			—			—		91,212
Long-term		11,860			35,976			—			12,297		60,133
Balance, December 31, 2022	$	38,190		$	100,858		$	—		$	12,297	$	151,345

(a) Restricted Share Units and Performance Share Units

Precision has various 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, repayment of debt and leverage ratio.

A summary of the RSUs and PSUs outstanding under these share-based incentive plans is pr

sented below:


	RSUs Outstanding			PSUs Outstanding
December 31, 2020		484,782			565,379
Granted		356,928			488,510
Redeemed		(216,820	)		(40,515	)
Forfeited		(26,734	)		(29,640	)
December 31, 2021		598,156			983,734
Granted		180,710			311,579
Redeemed		(266,876	)		(143,659	)
Forfeited		(16,822	)		(14,983	)
December 31, 2022		495,168			1,136,671

Subsequent to December 31, 2022, Precision elected to settle certain vesting RSUs and PSUs through the issuance

of 230,336 common shares.

(b) Executive Performance Share Units

Precision grants Executive PSUs to certain senior executives. Executive 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
December 31, 2020		288,707
Redeemed		(96,355	)
Forfeited		(2,388	)
December 31, 2021		189,964
Redeemed		(189,964	)
December 31, 2022		—

Included in net loss for the year ended December 31, 2022

was

an expense of $4 million (2021 – $18 million). During 2022, Precision settled 189,964 vesting Executive PSUs in 263,900 common shares.

(c)

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, 2020		77,574
Granted		27,017
Balance December 31, 2021		104,591
Granted		14,183
Balance December 31, 2022		118,774

Equity Settled Plans

(d) 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, 2020		148,665		$	87.00 – 286.20	$	138.86		141,156
Forfeited		(33,060	)		89.20 – 286.20		193.10
December 31, 2021		115,605			87.00 – 146.40		123.35		115,605
Exercised		(26,705	)		87.00 – 89.20		88.62
Forfeited		(65,845	)		89.20 – 286.20		141.05
December 31, 2022		23,055		$	87.00 – 145.97	$	113.01		23,055

U.S. Share Options	Options Outstanding			Range of Exercise Prices (US$)		Weighted Average Exercise Price (US$)		Options Exercisable
December 31, 2020		283,793		$	51.20 – 183.60	$	86.23		239,521
Forfeited		(15,950	)		183.60 – 183.60		183.60
December 31, 2021		267,843		$	51.20 – 115.80		80.43		257,854
Exercised		(93,890	)		51.20 – 68.80		61.64
Forfeited		(32,205	)		115.80 – 115.80		115.80
December 31, 2022		141,748		$	51.20 – 111.47	$	84.84		141,748


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
$ 87.00		12,885	$	87.00		2.15		12,885	$	87.00
145.97		10,170		145.97		1.13		10,170		145.97
$ 87.00 – 145.97		23,055	$	113.01		1.70		23,055	$	113.01


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$)
$ 51.20 – 85.40		83,993	$	66.99		2.03		83,993	$	66.99
100.40 – 111.47		57,755		110.81		1.08		57,755		110.81
$ 51.20 – 111.47		141,748	$	84.84		1.64		141,748	$	84.84

No options were granted during 2021 and 2022.

(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.

As at December 31, 2022, there were 1,470 (2021 – 1,470) deferred share units outstanding.