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Stockholders' Equity | 12 Months Ended
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Dec. 31, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stockholders' Equity | 11. Stockholders’ Equity 2016 Long Term Incentive Plan – During 2016, our Board adopted our 2016 Long Term Incentive Plan (the “2016 Plan”), which plan was approved by our shareholders at our annual meeting of shareholders held on June 2, 2016. The effective date of the 2016 Plan is April 19, 2016 and no awards may be granted under the 2016 Plan on and after the tenth anniversary of its effective date. In addition, no further awards will be granted under our 2008 Incentive Stock Plan (the “2008 Plan”) on or after the effective date of the 2016 Plan. Any awards that remain outstanding under the 2008 Plan will continue to be governed by the respective plan’s terms and the terms of the specific award agreement, as applicable. The maximum aggregate number of shares reserved and available for issuance under the 2016 Plan shall not exceed 2,750,000 shares plus any shares that become available for reissuance under the share counting provisions of the 2008 Plan following the effective date of the 2016 Plan, subject to adjustment as permitted under the 2016 Plan. Shares subject to any award that is canceled, forfeited, expires unexercised, settled in cash in lieu of common stock or otherwise terminated without a delivery of shares to a participant will again be available for awards under the 2016 Plan to the extent allowable by law. Under the 2016 Plan, awards may be made to employees, directors and consultants (for services rendered) of LSB or our subsidiaries subject to limitations as defined by the 2016 Plan. The 2016 Plan is administered by the compensation committee (the “Committee”) of our Board. Our Board or the Committee may amend the 2016 Plan, except that if any applicable statute, rule or regulation requires shareholder approval with respect to any amendment of the 2016 Plan, then to the extent so required, shareholder approval will be obtained. Shareholder approval will also be obtained for any amendment that would increase the number of shares stated as available for issuance under the 2016 Plan. The following may be granted by the Committee under the 2016 Plan: Stock Awards, Restricted Stock, Restricted Stock Units, and Other Awards – The Committee may grant awards of restricted stock, restricted stock units, and other stock and cash-based awards, which may include the payment of stock in lieu of cash (including cash payable under other incentive or bonus programs) or the payment of cash (which may or may not be based on the price of our common stock). Stock Appreciation Rights (“SARs”) – The Committee may grant SARs as a right in tandem with the number of shares underlying stock options granted under the 2016 Plan or on a stand-alone basis. SARs are the right to receive payment per share of the SAR exercised in stock or in cash equal to the excess of the share’s fair market value, as defined in the 2016 Plan, on the date of exercise over its fair market value on the date the SAR was granted. Exercise of a SAR issued in tandem with stock options will result in the reduction of the number of shares underlying the related stock option to the extent of the SAR exercise. Stock Options – The Committee may grant either incentive stock options or non-qualified stock options. The Committee sets option exercise prices and terms, except that the exercise price of a stock option may be no less than 100% of the fair market value, as defined in the 2016 Plan, of the shares on the date of grant. At the time of grant, the Committee will have sole discretion in determining when stock options are exercisable and when they expire, except that the term of a stock option cannot exceed 10 years subject to certain conditions. 11. Stockholders’ Equity (continued) Stock Incentive Plans - The following information relates to our long-term incentive plans:
|  | December 31, 2020 |
|  | 2016 Plan |  |  | 2008 Plan |
Maximum number of securities for issuance |  |  | 2,750,000 |  |  |  |  |
Number of awards available to be granted (1) |  |  | 1,016,951 |  |  |  |  |
Number of unvested restricted stock/performance-based restricted stock/restricted stock units outstanding |  |  | 1,169,527 |  |  |  | — |
Number of options outstanding |  |  | — |  |  |  | 122,000 |
Number of options exercisable |  |  | — |  |  |  | 122,000 |
.
(1) | Includes 2008 Plan shares canceled, forfeited, expired unexercised, which became available for reissuance under the 2016 Plan after the effective date of the 2016 Plan.
Restricted Stock and Restricted Stock Units – During 2020, 2019, and 2018, the Committee approved various grants under the 2016 Plan of shares of restricted stock to certain executives and employees. These shares have vesting provisions including vesting at the end of each one-year period at the rate of one-third per year for three years, vesting 100% at the end of three years, and vesting 100% at the end of one year. The unvested restricted shares carry dividend and voting rights. Sales of these shares are restricted prior to the date of vesting. Pursuant to the terms of the underlying restricted stock agreements, unvested restricted shares will immediately vest upon the occurrence of a change in control (as defined by agreement), termination without cause or death. During 2020, the Committee approved the grant of shares of restricted stock and performance based restricted stock (“PBRS”) to a certain executive. These shares are reflected in the 2020 information below. On December 31, 2019, the Committee approved the grant of 275,119 shares of performance-based restricted stock to certain executives. Key information to finalize the performance targets and range of vesting shares was approved by the Board during February 2020, which is the grant date for financial reporting purposes. The terms of this PBRS grant are discussed below and these PBRS shares are reflected in the 2020 information below. On December 30, 2018, the Committee approved the grant of 210,602 shares of PBRS to certain executives. Key information to finalize the performance targets and range of vesting shares was approved by the Board during January 2019, which is the grant date for financial reporting purposes. The terms of this PBRS grant are discussed below and these PBRS shares are reflected in the 2019 information below. During 2020, 2019, and 2018, the Committee approved the grant of shares of restricted stock units (“RSU”) to our non-employee directors for payment of a portion of their director fees under the 2016 Plan. Each RSU represents a right to receive one share of our common stock following the grant date and are non-forfeitable. Vesting occurs upon the earliest to occur: (i) the director’s separation from service, (ii) the first anniversary of the grant date (for 2020 grants), (iii) the third anniversary of the grant date (for 2019 and 2018 grants), or (iv) the occurrence of a change of control as defined by the agreement. Based on terms of the RSU agreements, the grant date fair value was recognized as stock-based compensation expense (SG&A) on the grant date in each respective year. 11. Stockholders’ Equity (continued) A summary of restricted stock activity during 2020 is presented below:
|  | Restricted Stock |  |  | Performance-Based Restricted Stock |  |  | Restricted Stock Units |
|  | Shares |  |  | Weighted- Average Grant Date Fair Value |  |  | Shares |  |  | Weighted- Average Grant Date Fair Value |  |  | Shares |  |  | Weighted- Average Grant Date Fair Value |
Unvested outstanding beginning of year |  |  | 618,072 |  |  | $ | 5.42 |  |  |  | 221,439 |  |  | $ | 7.26 |  |  |  | 86,340 |  |  | $ | 6.51 |
Granted |  |  | 31,138 |  |  | $ | 2.81 |  |  |  | 306,257 |  |  | $ | 3.20 |  |  |  | 231,816 |  |  | $ | 1.10 |
Vested |  |  | (283,418 | ) |  | $ | 4.90 |  |  |  | — |  |  | $ | — |  |  |  | (18,996 | ) |  | $ | 9.87 |
Cancelled or forfeited |  |  | (23,121 | ) |  | $ | 7.97 |  |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | — |
Unvested outstanding end of year |  |  | 342,671 |  |  | $ | 4.53 |  |  |  | 527,696 |  |  | $ | 4.90 |  |  |  | 299,160 |  |  | $ | 2.11 |
|  | Restricted Stock |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Shares of restricted stock granted |  |  | 31,138 |  |  |  | 285,956 |  |  |  | 369,350 |
Total fair value of restricted stock granted |  | $ | 87,000 |  |  | $ | 1,223,000 |  |  | $ | 2,019,000 |
Weighted-average fair value per restricted stock granted during year |  | $ | 2.81 |  |  | $ | 4.28 |  |  | $ | 5.47 |
Stock-based compensation expense - Cost of sales |  | $ | 62,000 |  |  | $ | 255,000 |  |  | $ | 385,000 |
Stock-based compensation expense - SG&A (1) |  | $ | 1,078,000 |  |  | $ | 1,263,000 |  |  | $ | 7,574,000 |
Income tax benefit |  | $ | (279,000 | ) |  | $ | (374,000 | ) |  | $ | (398,000 | )
Total weighted-average remaining vesting period in years |  | 1.61 |  |  | 2.18 |  |  |  | 1.78 |
Total fair value of restricted stock vested during the year |  | $ | 1,389,000 |  |  | $ | 3,371,000 |  |  | $ | 7,355,000 |
|  | Performance-Based Restricted Stock |  |  | Performance-Based Restricted Stock |  |  |  |
|  | 2020 (2) |  |  | 2019 (2) |  |  |  |
Shares of PBRS granted |  |  | 306,257 |  |  |  | 221,439 |  |  |  |
Total fair value of PBRS granted |  | $ | 980,000 |  |  | $ | 1,608,000 |  |  |  |
Weighted-average fair value per PBRS granted during year |  | $ | 3.20 |  |  | $ | 7.26 |  |  |  |
Stock-based compensation expense - Cost of sales |  | $ | — |  |  | $ | 53,000 |  |  |  |
Stock-based compensation expense - SG&A |  | $ | 218,000 |  |  | $ | 290,000 |  |  |  |
Income tax benefit |  | $ | (53,000 | ) |  | $ | (84,000 | ) |  |  |
Total weighted-average remaining vesting period in years |  |  | 1.57 |  |  |  | 1.85 |  |  |  |
Total fair value of PBRS vested during the year |  | $ | — |  |  | $ | — |  |  |  |
|  | Restricted Stock Units |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Shares of RSU granted |  |  | 231,816 |  |  |  | 31,833 |  |  |  | 35,511 |
Total fair value of RSU granted |  | $ | 255,000 |  |  | $ | 187,000 |  |  | $ | 187,000 |
Weighted-average fair value per RSU granted during year |  | $ | 1.10 |  |  | $ | 5.89 |  |  | $ | 5.28 |
Stock-based compensation expense - SG&A |  | $ | 255,000 |  |  | $ | 187,000 |  |  | $ | 187,000 |
Income tax benefit |  | $ | (63,000 | ) |  | $ | (46,000 | ) |  | $ | (34,000 | )
Total weighted-average remaining vesting period in years |  |  | 0.48 |  |  |  | 1.57 |  |  |  | 1.75 |
Total fair value of RSU vested during the year |  | $ | 187,000 |  |  | $ | 187,000 |  |  | $ | 125,000 |
(1) | As it relates to 2018, s ee Note 14-Related Party Transactions.
(2) | The PBRS restricted stock grants are tied to our free cash flow, fixed costs per ton of ammonia measured annually over a three-year period and modified based on our ranking relative to total stockholder return (share price appreciation plus dividends reinvested) (“TSR”) versus the companies in our 2020 and 2019 peer group (“Peer Group”) for the year of grant over a three-year measurement period. The actual number of shares that will vest at the end of the third year will be based on our performance against the metrics set in the awards but are subject to reduction to a minimum (or even zero) for recording less than the targeted performance. The threshold performance for free cash flow is 70% and for fixed costs per ton of ammonia is 60% of the targeted improvement with a maximum for each of 120% of target. The TSR modifier will adjust the overall actual performance up or down by as much as 25% based on our TSR versus the Peer Group average TSR. We estimate the fair value of each PBRS on the date of grant using a Monte Carlo simulation.
11. Stockholders’ Equity (continued) Stock Options – No stock options have been granted under the 2016 Plan during 2020, 2019 or 2018. As it relates to stock options granted under the 2008 plan, the exercise price of the outstanding options granted were equal to the market value of our common stock at the date of grant and vested at the end of each one-year period at the rate of 16.5% per year for the first five years and the remaining unvested options vested at the end of the sixth year. The fair value for of the stock options granted under the 2008 Plan were estimated, using an option pricing model, as of the date of the grant, which date was also the service inception date. A summary of stock option activity in 2020 is presented below:
|  | 2020 |
|  | Shares |  |  | Weighted-Average Exercise Price |
Outstanding at beginning of year |  |  | 124,000 |  |  | $ | 33.86 |
Granted |  |  | — |  |  | $ | — |
Exercised |  |  | — |  |  | $ | — |
Forfeited or expired |  |  | (2,000 | ) |  | $ | 34.50 |
Outstanding at end of year |  |  | 122,000 |  |  | $ | 33.85 |
Exercisable at end of year |  |  | 122,000 |  |  | $ | 33.85 |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Stock-based compensation expense - Cost of sales |  | $ | 106,000 |  |  | $ | 122,000 |  |  | $ | 141,000 |
Stock-based compensation expense - SG&A |  | $ | 42,000 |  |  | $ | 50,000 |  |  | $ | 71,000 |
Income tax benefit |  | $ | (36,000 | ) |  | $ | (42,000 | ) |  | $ | (54,000 | )
Total intrinsic value of options exercised during the year |  | $ | — |  |  | $ | — |  |  | $ | — |
Total fair value of options vested during the year |  | $ | 180,000 |  |  | $ | 169,000 |  |  | $ | 169,000 |
Total intrinsic value of options outstanding at end of year |  | $ | — |  |  | $ | — |  |  | $ | — |
Total intrinsic value of options exercisable at end of year |  | $ | — |  |  | $ | — |  |  | $ | — |
Total weighted-average remaining vesting period in years |  |  | — |  |  |  | 0.49 |  |  |  | 1.05 |
Total weighted-average remaining contractual life period in years (options outstanding) |  | 2.64 |  |  |  | 3.61 |  |  |  | 4.61 |
Total weighted-average remaining contractual life period in years (options exercisable) |  | 2.64 |  |  |  | 3.47 |  |  |  | 4.31 |
Stock-based Compensation Expense Not Yet Recognized – At December 31, 2020, the total stock-based compensation expense not yet recognized is $2,212,000, relating to all forms of non-vested equity awards, which we will be amortizing (subject to adjustments for actual forfeitures and performance assessments associated with the PBRS restricted stock) through the respective remaining vesting periods through December 2022. Reserved Shares of Common Stock – As of December 31, 2020, we have reserved 1.6 million shares of common stock issuable upon potential conversion of preferred stocks and equity awards pursuant to their respective terms. NOL Rights Agreement - On July 6, 2020, we entered into the Section 382 Rights Agreement (the “NOL Rights Agreement”), dated as of July 6, 2020, between LSB and Computershare Trust Company, N.A., as rights agent. The purpose of the NOL Rights Agreement is to facilitate our ability to preserve our NOLs and other tax attributes in order to be able to offset potential future income taxes for federal income tax purposes. Our ability to use these NOLs and other tax attributes would be substantially limited if we experience an “ownership change,” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”). A company generally experiences an ownership change if the percentage of the value of its stock owned by certain 5% shareholders, as defined in Section 382 of the Code, increases by more than 50% points over a rolling three-year period. The NOL Rights Agreement is intended to reduce the likelihood of an ownership change under Section 382 of the Code by deterring any person (as defined in the NOL Rights Agreement) or group of affiliated or associated persons (“Group”) from acquiring beneficial ownership of 4.9% or more of our outstanding common shares. The rights issued under the NOL Rights Agreement will expire on the earliest to occur of (i) the close of business on the day following the certification of the voting results of our 2021 annual meeting of stockholders, or other duly held stockholders’ meeting, (ii) the date on which our Board determines in its sole discretion that (x) the NOL Rights Agreement is no longer necessary for the preservation of material valuable NOLs or tax attributes or (y) the NOLs and tax attributes have been fully utilized and may no longer be carried forward and (iii) the close of business on July 6, 2023. 11. Stockholders’ Equity (continued) Our Board may, in its discretion, determine that a person, entity or a certain transaction is exempt from the operation of the NOL Rights Agreement or amend the terms of the rights. This summary description of the NOL Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement filed as an exhibit to our Current Report on Form 8-K filed on July 6, 2020.

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- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 2: 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
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