Stock appreciation rights (''SARs'')

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

7. Stock appreciation rights (“SARs”)

As at March 31, 2016, ASC had granted 1,347,575 SARs (inclusive of 1,579 forfeited SARS) to certain of its officers and directors under its 2013 Equity Incentive Plan. Under a SAR award, the grantee is entitled to receive the appreciation of a share of ASC’s common stock following the grant of the award. Each SAR provides for a payment of an amount equal to the excess, if any, of the fair market value of a share of ASC’s common stock at the time of exercise of the SAR over the per share exercise price of the SAR, multiplied by the number of shares for which the SAR is then exercised. Payment under the SAR will be made in the form of shares of ASC’s common stock, based on the fair market value of a share of ASC’s common stock at the time of exercise of the SAR.

The SAR awards provide that in no event will the appreciation per share for any portion of the SAR award be deemed to exceed four times (i.e., 400%) the per share exercise price of the SAR. In other words, the fair market value of a share of our common stock for purposes of calculating the amount payable under the SAR is not deemed to exceed five times (i.e. 500%) the per share exercise price of the SAR. Any appreciation in excess of four times the per share exercise price of the SAR will be disregarded for purposes of calculating the amount payable under the SAR. Vesting on all awards up to July 31, 2016 is subject to certain market conditions being met. On that date the vesting will revert to being solely dependent on time of service. The grant date fair value was calculated by applying a model based on the Monte Carlo simulation. The model inputs were the grant price, dividend yield based on the initial intended dividend set out by the Company, a risk-free rate of return equal to the zero coupon U.S. Treasury bill commensurate with the contractual terms of the units and expected volatility based on the average of the most recent historical volatilities in the Company’s peer group. A summary of awards, simulation inputs and outputs is as follows:

						Monte Carlo Simulation Inputs
																	Weighted
																	Average
																	Fair		Average
											Risk-free						Value		Expected
	SARs		Exercise		Vesting	Grant		Dividend			rate of			Expected			@grant		Exercise
Date	Awarded		Price		Period	Price		Yield			Return			Volatility			date		Life
01-Aug-13		1,078,125	$	14.00	5 yrs	$	14.00		2.87	%		2.15	%		54.89	%	$	4.28	4.9 - 6.0 yrs
12-Mar-14		22,118	$	13.66	3 yrs	$	13.66		2.93	%		2.06	%		56.31	%	$	4.17	4.6 - 5.0 yrs
01-Jun-14		5,595	$	13.91	3 yrs	$	13.91		2.88	%		2.20	%		53.60	%	$	4.20	4.5 - 5.0 yrs
06-Mar-15		37,797	$	10.25	3 yrs	$	10.25		3.90	%		1.90	%		61.38	%	$	2.98	4.2 - 5.0 yrs
15-Jan-16		205,519	$	9.20	3 yrs	$	9.20		6.63	%		1.79	%		58.09	%	$	2.20	4.0 – 5.0 yrs

The cost of each tranche is being recognized by the Company on a straight line basis. The recognition of share-based compensation costs related to the tranches that vest before July 31, 2016 will be accelerated if the market condition is met and the requisite service period has been completed. The Company’s policy for issuing shares, if exercised, is to register and issue new common shares to the beneficiary. The movement for the quarter ended March 31, 2016 is set forth below:

			Weighted average
	No. of Units		exercise price
Balance as at January 1, 2016		1,142,056	$	13.87
SARs granted during the quarter ending March 31, 2016		205,519	$	9.20
SARs exercised/converted/expired during the quarter		-		-
SARs forfeited during the quarter		-		-
Balance as at March 31, 2016 (none of which are exercisable or convertible)		1,347,575	$	13.16

The total cost related to non-vested awards expected to be recognized through 2018 is set forth below:

Period	TOTAL
2016		1,306,040
2017		458,123
2018		155,294
		1,919,457