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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stock-Based Compensation | 15. Stock-Based Compensation 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 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, but the Prior Plans continue to govern awards outstanding; outstanding awards will continue in force and effect until vested, exercised or forfeited 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 share or performance unit awards. Following amendments to the 2013 Omnibus Plan to reflect the effect of the Spin-Off of MFS and the November 2017 1-for-4 reverse stock split, the total number of shares of the Company’s common stock available for awards under the 2013 Omnibus Plan is 7,477,395 shares. The 2003 Stock Plan and the 2013 Omnibus Plan provided for both short-term and long-term incentive awards for employees, and the 2013 Omnibus Plan also provided for granting of long-term incentive awards for non-employee members of the Board of Directors. Options granted prior to 2011 became exercisable in 25% increments beginning on the second anniversary of the grant date over a four-year period and expire ten years subsequent to the grant date. Option grants to employees beginning in 2011 became exercisable in 25% increments beginning on the first anniversary of the grant date over a four-year period and expire ten years subsequent to the grant date. Beginning in 2017, grants to officers and directors are exercisable in three annual increments over a three-year period beginning on the first anniversary of the date and expire 10 years subsequent to the grant date. Restrictions on restricted stock awards and restricted stock units granted to employees lapse 100% on the third anniversary of the grant date. Restrictions on restricted stock units granted to non-employee members of the Board of Directors lapse 100% on the second anniversary of the grant 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. An explanation of the performance goals and the applicable performance period for the 2016 and 2014 awards is set forth below. The 2004 Stock Plan provided for the granting of stock options to non-employee members of the Board of Directors. No new awards may be made under the 2004 Stock Plan. Stock options awarded under the plan were granted at an exercise price equal to the market price of the common stock at the date of grant and vest immediately and expire ten years subsequent to the grant date. Restrictions on restricted stock awarded to date under the plan lapse on the third anniversary of the award date. The Company recognizes expense for all stock-based compensation on a straight-line basis over the vesting period of the entire award. Total stock-based compensation expense recognized within engineering, selling and administrative expenses in the Consolidated Statements of Operations was $6.3 million, $4.9 million and $9.7 million during 2017, 2016 and 2015, respectively. In 2016, the Company also recognized $2.8 million of expense before tax related to restricted stock retention awards and modification of performance awards due to the Spin-Off, and $1.3 million of expense before tax related to the modification of stock awards associated with employee severance; these expenses are included in “other expense” and “restructuring expense,” respectively, within operating earnings in the Consolidated Statements of Operations. The Company recognized stock-based compensation expense before tax of $0.0 million, $0.3 million and $4.7 million related to MFS which is included in “(loss) income from discontinued operations” in the Consolidated Statements of Operations. Shares are issued out of treasury stock upon exercise for stock options and vesting of restricted stock awards and restricted stock units. Stock Options Any option grants to directors are exercisable immediately upon granting and expire ten years subsequent to the grant date. For all outstanding grants made to officers and employees prior to 2011, options become exercisable in 25% increments annually over a four-year period beginning on the second anniversary of the grant date and expire ten years subsequent to the grant date. Starting with 2011 grants to officers and directors, options become exercisable in 25% increments annually over a four-year period beginning on the first anniversary of the grant date and expire ten years subsequent to the grant date. Beginning in 2017, grants to officers and directors are exercisable in three annual increments over a three-year period beginning on the first anniversary of the date and expire 10 years subsequent to the grant date. The Company granted options to acquire 273,800, 439,741 and 151,827 shares of common stock during 2017, 2016 and 2015, respectively. Stock-based compensation expense is calculated by estimating the fair value of incentive and non-qualified stock options at the time of grant and is amortized over the stock options’ vesting period. The Company recognized $1.9 million, $1.8 million and $3.7 million of compensation expense before taxes associated with stock options during 2017, 2016 and 2015, respectively. A summary of the Company’s stock option activity is as follows ( the weighted average exercise price per share has been adjusted for the Spin-Off and November 2017 1-for-4 reverse stock split):
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Aggregate Intrinsic Value |
Options outstanding as of January 1, 2016 |  |  | 1,397,571 |  |  | $ | 15.51 |  |  |  |  |
Granted |  |  | 439,741 |  |  |  | 17.20 |  |  |  |  |
Exercised |  |  | (712,514 | ) |  |  | 13.09 |  |  |  |  |
Forfeited |  |  | (97,842 | ) |  |  | 16.38 |  |  |  |  |
Cancelled |  |  | (61,056 | ) |  |  | 18.68 |  |  |  |  |
Options outstanding as of December 31, 2016 |  |  | 965,900 |  |  |  | 17.76 |  |  |  |  |
Granted |  |  | 273,800 |  |  |  | 25.68 |  |  |  |  |
Exercised |  |  | (258,699 | ) |  |  | 19.86 |  |  |  |  |
Forfeited |  |  | (78,100 | ) |  |  | 20.16 |  |  |  |  |
Cancelled |  |  | (26,536 | ) |  |  | 27.29 |  |  |  |  |
Options outstanding as of December 31, 2017 |  |  | 876,365 |  |  | $ | 19.13 |  |  | $ | 17.8 |
Options exercisable as of: |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2017 |  |  | 372,206 |  |  | $ | 15.97 |  |  | $ | 8.7 |
The Company uses the Black-Scholes valuation model to value stock options. The Company used its historical stock prices as the basis for its volatility assumption for grants prior to the Spin-Off. For grants after the Spin-Off, the Company used an average of historical stock prices of selected peers. The assumed risk-free rates were based on ten-year U.S. Treasury rates in effect at the time of grant. The expected option life represents the period of time that the options granted are expected to be outstanding and is based on historical experience. As of December 31, 2017, the Company has $2.7 million of unrecognized compensation expense before tax related to stock options, which will be recognized over a weighted average period of 2.1 years. The weighted average fair value of options granted per share during the years ended December 31, 2017, 2016 and 2015 was $12.16, $8.20 and $43.72, respectively. The fair value of each option grant was estimated at the date of grant using the Black-Scholes option-pricing method with the following assumptions:
|  | 2017 |  |  | 2016 |  |  | 2015 |
Expected Life (years) |  |  | 6.5 |  |  |  | 6.5 |  |  |  | 6.0 |
Risk-free Interest rate |  |  | 2.2 | % |  |  | 1.6 | % |  |  | 1.8 | %
Expected volatility |  |  | 45.0 | % |  |  | 45.0 | % |  |  | 56.0 | %
Expected dividend yield |  |  | — | % |  |  | — | % |  |  | 0.3 | %
For the years ended December 31, 2017, 2016 and 2015, the total intrinsic value of stock options exercised was $3.0 million, $6.3 million and $5.6 million, respectively. Restricted Stock Awards The Company granted 80,548 of restricted stock awards to employees in 2015 as retention awards to provide incentive for the employees to continue in employment and contribute toward the successful completion of the separation. Under the retention agreements, the restricted shares will vest on the second anniversary of the Spin-Off if the employee has been continuously employed with the Company or an affiliate through that second anniversary. The Company recognized zero ($0.0), $1.8 million and $.3 million of compensation expense associated with restricted stock awards for the years ended December 31, 2017, 2016 and 2015, respectively. Restricted stock award expense is based on the fair value of the Company’s shares as of the grant date. A summary of activity for restricted stock awards for the year ended December 31, 2017 is as follows:
|  | Shares |  |  | Weighted Average Grant Date Fair Value |
Unvested as of January 1, 2017 |  |  | 39,028 |  |  | $ | 86.92 |
Granted |  |  | — |  |  |  | — |
Vested |  |  | (11,058 | ) |  |  | 86.92 |
Forfeited |  |  | (5,544 | ) |  |  | 86.92 |
Unvested as of December 31, 2017 |  |  | 22,426 |  |  | $ | 86.92 |
As of December 31, 2017, the Company has zero ($0.0) of unrecognized compensation expense before tax related to restricted stock awards. Restricted Stock Units The Company granted 267,902, 362,293 and 111,840 of restricted stock units in 2017, 2016 and 2015, respectively. The restricted stock units are earned either based on service over the vesting period, or based on service over the vesting period and on the extent to which performance goals are met over the applicable performance period (“performance shares”). The performance goals and the applicable performance period vary for performance shares each grant year. The Company recognized $4.4 million, $4.0 million and $7.5 million of compensation expense associated with restricted stock units during 2017, 2016 and 2015, respectively. The restricted stock units granted to employees in 2017 generally vest on the third anniversary of the grant date, assuming continued employment. The restricted stock units granted to directors in 2017 vest on the second anniversary of the grant date, assuming continued service. The performance shares granted in 2017 are earned based on the extent to which performance goals are met by the Company over a three-year period from January 1, 2017 to December 31, 2019. The performance goals for the performance shares granted in 2017 were based fifty percent (50%) on total shareholder return relative to a peer group of companies over the three-year period and fifty percent (50%) on meeting targeted adjusted EBITDA margin at the end of the three-year period. Depending on the foregoing factors, the number of shares awarded could range from zero to approximately 230,000 for the 2017 performance share grants. For the performance awards, the expense is based on the fair value of the Company's shares as of the grant date for the adjusted EBITDA margin criteria and a Monte Carlo model for the total shareholder return criteria. The restricted stock units granted to employees in 2016 generally vest on the third anniversary of the grant date, assuming continued employment. The restricted stock units granted to directors in 2016 vest on the second anniversary of the grant date, assuming continued service. The performance shares granted in 2016 are earned based on the extent to which performance goals are met by the Company over a three-year period from January 1, 2016 to December 31, 2018. The performance goals for the performance shares granted in 2016 were based fifty percent (50%) on total shareholder return relative to a peer group of companies over the three-year period and fifty percent (50%) on return on invested capital over the three-year period. Depending on the foregoing factors, the number of shares awarded could range from zero to approximately 400,000 for the 2016 performance share grants. For the performance awards, the expense is based on the fair value of the Company's shares as of the grant date for the return on invested capital or adjusted EBITDA criteria and a Monte Carlo model for the total shareholder return criteria. The restricted stock units granted to employees in 2015 generally vest on the third anniversary of the grant date, assuming continued employment. The restricted stock units granted to directors in 2015 generally vest on the second anniversary of the grant date, assuming continued service. Performance shares were not granted in 2015 due to the anticipated Spin-Off. A summary of activity for restricted stock units for the year ended December 31, 2017 is as follows:
|  | Shares |  |  | Weighted Average Grant Date Fair Value |
Unvested as of January 1, 2017 |  |  | 465,117 |  |  | $ | 44.08 |
Granted |  |  | 267,902 |  |  |  | 25.87 |
Vested |  |  | (72,891 | ) |  |  | 96.59 |
Forfeited |  |  | (66,029 | ) |  |  | 27.72 |
Unvested as of December 31, 2017 |  |  | 594,099 |  |  | $ | 29.18 |
As of December 31, 2017, the Company has $4.3 million of unrecognized compensation expense before tax related to restricted stock units which will be recognized over a weighted average period of 1.8 years.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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