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Stock-Based Compensation
6 Months Ended
Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
Stock-Based Compensation
The Company’s 2013 Omnibus Incentive Plan (the “2013 Omnibus Plan”) was approved by shareholders on May 7, 2013 and replaced several of the Company's incentive plans (collectively referred to as the "Prior Plans"). No new awards may be granted under the Prior Plans; 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 that date.
Performance shares are earned based on the extent to which performance goals are met over the applicable performance period.  The performance goals and the applicable performance period vary for each grant year. The performance goals for the performance shares granted in 2016 are based fifty percent (50%) on total shareholder return relative to peers and fifty percent (50%) on the weighted average return on invested capital (ROIC) over the three-year performance period. Shares granted in 2014 were modified as of the Spin-Off date such that payout will be at target with service through December 31, 2016. Depending on the foregoing factors, the number of shares granted could range from zero to 1.6 million and zero to 0.1 million for the 2016 and 2014 performance share grants, respectively. Due to the Spin-Off, awards with performance conditions other than service were not granted in 2015.
The Company granted options to acquire 1.8 million and 0.4 million shares of common stock to employees during the six months ended June 30, 2016 and 2015, respectively.  In addition, the Company issued a total of 1.4 million restricted stock units ("RSUs") to employees and directors during the six months ended June 30, 2016 and 0.4 million restricted stock units to employees and directors during the six months ended June 30, 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.
In April 2015, the Company issued a total of 0.4 million restricted stock awards ("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. As of June 30, 2016, 0.3 million RSAs remain outstanding. 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 MTW, MFS or an affiliate through that second anniversary.
Stock-based compensation expense was $1.5 million and $1.7 million for the three months ended June 30, 2016 and 2015, respectively.  Stock-based compensation expense was $2.8 million and $5.8 million for the six months ended June 30, 2016 and 2015, respectively. 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. Stock options, RSUs and 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. As no incremental fair value was awarded as a result of the adjustments, the modifications did not result in significant incremental compensation expense.