Stock-Based Compensation

3 Months Ended

Mar. 31, 2016

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

The Company’s 2013 Omnibus Incentive Plan (the “2013 Omnibus Plan”) was approved by shareholders on May 7, 2013 and replaced the 2003 Incentive Stock and Awards Plan (the “2003 Stock Plan”) and the 2004 Non-Employee Director Stock and Awards Plan (the “2004 Stock Plan”). The 2013 Omnibus Plan also replaced the Company's Short-Term Incentive Plan (the “STIP”) as of December 31, 2013. The 2003 Stock Plan, the 2004 Stock Plan and the STIP are referred to as the “Prior Plans.” No new awards may be granted under the Prior Plans after the respective termination dates; however, outstanding awards under the Prior Plans will continue in force and effect until vested, exercised, forfeited or expired pursuant to their terms. The 2013 Omnibus Plan provides for both short-term and long-term incentive awards for employees and non-employee directors. Stock-based awards may take the form of stock options, stock appreciation rights, restricted stock, restricted stock units and performance shares or performance unit awards. The total number of shares of the Company’s common stock originally available for awards under the 2013 Omnibus Plan was 8.0 million shares, and the amount is subject to adjustment for stock splits, stock dividends and certain other transactions or events in the future. On March 20, 2016, the Board of Directors approved an amendment to the 2013 Plan to reflect the effect of the Spin-Off in accordance with the 2013 Plan’s provisions governing such adjustments; as a result, a total of 28,184,595 shares were available for future awards under the 2013 Plan as of March 31, 2016.

Stock-based compensation expense was $1.3 million and $4.1 million for the three months ended March 31, 2016 and 2015, respectively. The Company granted options to acquire 1.7 million and 0.6 million shares of common stock to employees during the three months ended March 31, 2016 and 2015, respectively. In addition, the Company issued a total of 1.3 million restricted stock units ("RSUs") to employees and directors during the three months ended March 31, 2016 and 0.5 million restricted stock units to employees and directors during the three months ended March 31, 2015. The RSUs granted to employees vest on the third anniversary of the grant date. The RSUs granted to directors vest on the second anniversary of the grant date.

The Company recognizes stock-based compensation expense over the stock-based awards' vesting period.

On March 4, 2016, in connection with the Spin-Off, the Company adjusted its outstanding equity awards in accordance with the terms of the employee matters agreement. For purposes of the vesting of these equity awards, continued employment or service with MTW or with MFS is treated as continued employment for purposes of these awards. The adjustments are summarized as follows:

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Stock options, RSUs and Restricted Stock Awards ('RSAs") granted for MTW common stock prior to March 4, 2016 were generally converted into the same number of MTW stock options (with an adjusted exercise price), RSUs and RSAs, as well as, an equal number of MFS stock options, RSUs and RSAs. The underlying performance conditions for the RSUs are consistent with MTW’s original performance targets and future measurement periods, and future performance targets will be established to reflect each Company’s standalone business.

As no incremental fair value was awarded as a result of the above adjustments, the modifications did not result in significant incremental compensation expense.

In April 2015, the Company issued a total of 0.4 million RSAs to employees as retention awards to provide additional incentive for the employees to continue in employment and contribute toward the successful completion of the Spin-Off. Under the retention agreements, each employee was granted RSAs that will vest on the second anniversary of the Spin-Off if the employee has been continuously employed with the MTW, MFS or an affiliate through that second anniversary.