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Stock Based Compensation | 9 Months Ended
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Sep. 30, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stock Based Compensation | 11. Stock Based Compensation—The Company accounts for stock-based awards to employees and directors in accordance with FASB ASC 718, “Share-Based Payment,” which requires the measurement and recognition of compensation for all share-based payment awards made to employees and directors including shares of common stock granted for services, employee stock options, and employee stock purchases related to the Employee Stock Purchase Plan (“employee stock purchases”) based on estimated fair values. The following tables illustrate the Company’s stock based compensation, unamortized stock-based compensation, and remaining weighted average period for the three and nine months ended September 30, 2017 and 2016.
|  | Stock-Based Compensation for the Three months ended |  |  | Stock-Based Compensation for the Nine months ended |  |  | Unamortized Stock-Based Compensation |  |  | Remaining Weighted Average Period (years) |
September 30, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Incentive Stock Options |  | $ | 80 |  |  | $ | 250 |  |  | $ | 94 |  |  |  | 0.3 |
Restricted Stock |  |  | 635 |  |  |  | 2,068 |  |  |  | 4,475 |  |  |  | 1.2 |
Performance Based Restricted Stock |  |  | 299 |  |  |  | 920 |  |  |  | 1,901 |  |  |  | 2.0 |
Performance Based Options |  |  | 249 |  |  |  | 347 |  |  |  | 69 |  |  |  | 0.3 |
Total |  | $ | 1,263 |  |  | $ | 3,585 |  |  | $ | 6,539 |  |  |  |  |
September 30, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Incentive Stock Options |  | $ | 71 |  |  | $ | 252 |  |  | $ | 497 |  |  |  | 1.2 |
Restricted Stock |  |  | 406 |  |  |  | 1,100 |  |  |  | 2,545 |  |  |  | 1.8 |
Performance Based Restricted Stock |  |  | 100 |  |  |  | 240 |  |  |  | 857 |  |  |  | 1.4 |
Performance Based Options |  |  | 11 |  |  |  | 64 |  |  |  | 173 |  |  |  | 1.2 |
Total |  | $ | 588 |  |  | $ | 1,656 |  |  | $ | 4,072 |  |  |  |  |
Stock Options—During the three and nine months ended September 30, 2017, the Company did not grant any employees options to acquire shares of common stock. Option activity within each plan is as follows:
|  | Incentive Stock Option Plans |  |  | Weighted Average Price Per Share |  |  | Exercisable Weighted Average Price Per Share |
Balance outstanding, December 31, 2016 |  |  | 541,905 |  |  | $ | 9.33 |  |  | $ | 7.97 |
Options exercised |  |  | (15,000 | ) |  |  | 7.50 |  |  |  | — |
Options forfeited |  |  | (3,919 | ) |  |  | 11.49 |  |  |  | — |
Balance outstanding, March 31, 2017 |  |  | 522,986 |  |  |  | 9.37 |  |  |  | 7.99 |
Options exercised |  |  | (21,300 | ) |  |  | 7.50 |  |  |  | — |
Options forfeited |  |  | (3,183 | ) |  |  | 11.49 |  |  |  | — |
Balance outstanding, June 30, 2017 |  |  | 498,503 |  |  |  | 9.43 |  |  |  | 8.03 |
Options exercised |  |  | (12,000 | ) |  |  | 7.50 |  |  |  | — |
Options forfeited |  |  | (4,285 | ) |  |  | 11.49 |  |  |  | — |
Balance outstanding, September 30, 2017 |  |  | 482,218 |  |  | $ | 9.46 |  |  | $ | 8.05 |
Information relating to stock options at September 30, 2017, summarized by exercise price is as follows:
|  | Outstanding Weighted Average |  |  | Exercisable Weighted Average |
Exercise Price Per Share |  | Shares |  |  | Remaining Life (Months) |  |  | Exercise Price |  |  | Shares |  |  | Exercise Price |
Incentive Stock Option Plan: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
$7.50 |  |  | 250,050 |  |  |  | 38 |  |  | $ | 7.5 |  |  |  | 250,050 |  |  | $ | 7.50 |
$11.32—$14.75 |  |  | 232,168 |  |  |  | 83 |  |  |  | 11.58 |  |  |  | 34,334 |  |  |  | 12.07 |
|  |  | 482,218 |  |  |  |  |  |  | $ | 9.46 |  |  |  | 284,384 |  |  | $ | 8.05 |
The weighted average exercise prices for options granted, and exercisable, and the weighted average remaining contractual life for options outstanding as of September 30, 2017, were as follows:
As of September 30, 2017 |  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (Months) |  |  | Intrinsic Value (thousands) |
Incentive Stock Option Plan: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding |  |  | 482,218 |  |  | $ | 9.46 |  |  |  | 60 |  |  | $ | 6,480 |
Expected to Vest |  |  | 480,800 |  |  | $ | 9.46 |  |  |  | 60 |  |  | $ | 6,464 |
Exercisable |  |  | 284,384 |  |  | $ | 8.05 |  |  |  | 41 |  |  | $ | 4,222 |
During the three months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to stock options of $80 and $71, respectively. During the nine months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to stock options of $250 and $252, respectively. As of September 30, 2017, the Company had approximately $94 of unamortized stock-based compensation related to unvested stock options outstanding. This amount will be recognized over the weighted-average period of 0.3 years. This projected expense will change if any stock options are granted or cancelled prior to the respective reporting periods or if there are any changes required to be made for estimated forfeitures. Common stock grants — A summary of non-vested shares as of, and for, the nine months ended September 30, 2017 and 2016 is presented below:
|  | Nine Months Ended September 30, 2017 |  |  | Nine Months Ended September 30, 2016 |
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Nonvested shares at December 31st |  |  | 324,756 |  |  | $ | 14.75 |  |  |  | 362,841 |  |  | $ | 20.43 |
Granted |  |  | 251,475 |  |  |  | 16.10 |  |  |  | — |  |  |  | — |
Vested |  |  | (10,100 | ) |  |  | 12.95 |  |  |  | (127,274 | ) |  |  | 31.29 |
Forfeited |  |  | (6,544 | ) |  |  | 15.26 |  |  |  | (16,008 | ) |  |  | 23.67 |
Nonvested shares at March 31st |  |  | 559,587 |  |  |  | 15.38 |  |  |  | 219,559 |  |  |  | 14.59 |
Granted |  |  | 38,502 |  |  |  | 17.08 |  |  |  | 140,541 |  |  |  | 15.08 |
Vested |  |  | (188,400 | ) |  |  | 15.22 |  |  |  | (22,639 | ) |  |  | 15.63 |
Forfeited |  |  | (6,593 | ) |  |  | 15.55 |  |  |  | (6,457 | ) |  |  | 14.98 |
Nonvested shares at June 30th |  |  | 403,096 |  |  |  | 15.61 |  |  |  | 331,004 |  |  |  | 14.72 |
Granted |  |  | 1,000 |  |  |  | 19.90 |  |  |  | 1,668 |  |  |  | 16.75 |
Vested |  |  | (1,065 | ) |  |  | 12.88 |  |  |  | (2,566 | ) |  |  | 19.18 |
Forfeited |  |  | (5,209 | ) |  |  | 15.80 |  |  |  | (12,822 | ) |  |  | 14.98 |
Nonvested shares at September 30th |  |  | 397,822 |  |  | $ | 15.63 |  |  |  | 317,284 |  |  | $ | 14.69 |
Common stock grants — During the nine months ended September 30, 2017, the Company issued a total of 290,977 shares of common stock to employees and directors. 24,312 shares vested immediately, 3,900 shares will vest in three equal tranches on the employee’s anniversary, 1,000 shares will cliff vest after one year of service, 2,500 shares will cliff vest after two years of service, and the remaining shares will cliff vest after three years of service. The shares granted in 2017 were average fair valued at $16.24 per share. The fair value was determined by using the publicly traded share price as of the date of grant. The Company will recognize as expense the value of restricted shares over the required service period. During the nine months ended September 30, 2016, the Company issued a total of 142,209 shares of restricted common stock to employees. Of these, 21,139 shares vested immediately and the remaining 121,070 shares will cliff vest after three years of service. The shares granted in 2016 were average fair valued at $15.10 per share. The fair value was determined by using the publicly traded share price as of the date the grant was approved. The Company will recognize as expense the value of restricted shares over the required service period. During the three months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to restricted shares of $635 and $406, respectively. During the nine months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to restricted shares of $2,068 and $1,100, respectively. As of September 30, 2017, the Company had approximately $4,475 of unamortized stock-based compensation related to unvested restricted shares. This amount will be recognized over the weighted-average period of 1.2 years. This projected expense will change if any restricted shares are granted or cancelled prior to the respective reporting periods or if there are any changes required to be made for estimated forfeitures. Performance Based Shares—A summary of non-vested performance based shares as of, and for, the nine months ended September 30, 2017 and 2016, respectively is presented below:
|  | Nine Months Ended September 30, 2017 |  |  | Nine Months Ended September 30, 2016 |
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Nonvested shares at December 31st |  |  | 119,022 |  |  | $ | 14.18 |  |  |  | 104,403 |  |  | $ | 17.05 |
Granted |  |  | 121,194 |  |  |  | 15.40 |  |  |  | — |  |  |  | — |
Forfeited |  |  | — |  |  |  | — |  |  |  | (9,395 | ) |  |  | 17.65 |
Nonvested shares at March 31st |  |  | 240,216 |  |  |  | 14.80 |  |  |  | 95,008 |  |  |  | 16.99 |
Granted |  |  | 7,400 |  |  |  | 15.88 |  |  |  | 52,170 |  |  |  | 14.39 |
Vested |  |  | (48,046 | ) |  |  | 14.92 |  |  |  | — |  |  |  | — |
Forfeited |  |  | (12,560 | ) |  |  | 12.92 |  |  |  | (19,612 | ) |  |  | 28.25 |
Nonvested shares at June 30th |  |  | 187,010 |  |  |  | 14.93 |  |  |  | 127,566 |  |  |  | 14.20 |
Forfeited |  |  | (953 | ) |  |  | 15.21 |  |  |  | (8,544 | ) |  |  | 14.39 |
Nonvested shares at September 30th |  |  | 186,057 |  |  | $ | 14.93 |  |  |  | 119,022 |  |  | $ | 14.18 |
Performance Based Shares — During the nine months ended September 30, 2017, the Company issued a total of 128,594 performance based shares to employees. The shares granted during the nine months of 2017 have an average fair value of $15.43. The fair value was determined by using the publicly traded share price as of the date of grant. The Company will recognize as expense the value of the performance based shares over the required service period from grant date. The shares will cliff vest on February 8, 2020 with a measurement period commencing January 1, 2017 and ending December 31, 2019. Eighty percent of these performance based shares are based upon the financial performance of the Company, specifically, an earnings before income taxes (“EBIT”) goal weighted at 50% and a net sales goal weighted at 30%. The remaining 20% of performance based shares are based upon AVD stock price appreciation over the same performance measurement period. The EBIT and net sales goals measure the relative growth of the Company’s EBIT and net sales for the performance measurement period, as compared to the median growth of EBIT and net sales for an identified peer group. The stockholder return goal measures the relative growth of the fair market value of the Company’s stock price over the performance measurement period, as compared to that of the Russell 2000 Index and the median fair market value of the common stock of the comparator companies, identified in the Company’s 2016 Proxy Statement. All parts of these awards vest in three years, but are subject to reduction to a minimum (or even zero) for recording less than the targeted performance and to increase to a maximum of 200% for achieving in excess of the targeted performance. During the nine months ended September 30, 2016, the Company granted a total of 52,170 performance based shares that will cliff vest on January 6, 2019 with a measurement period commencing January 1, 2016 and ending December 31, 2018. Eighty percent of these performance based shares are based upon the financial performance of the Company, specifically, EBIT goal weighted at 50% and a net sales goal weighted at 30%. The remaining 20% of performance based shares are based upon AVD stock price appreciation over the same performance measurement period. The EBIT and net sales goals measure the relative growth of the Company’s EBIT and net sales for the performance measurement period, as compared to the median growth of EBIT and net sales for an identified peer group. The stockholder return goal measures the relative growth of the fair market value of the Company’s stock price over the performance measurement period, as compared to that of the Russell 2000 Index and the median fair market value of the common stock of the comparator companies, identified in the Company’s 2015 Proxy Statement. All parts of these awards vest in three years, but are subject to reduction to a minimum (or even zero) for recording less than the targeted performance and to increase to a maximum of 200% for achieving in excess of the targeted performance. As of September 30, 2017, performance based shares related to EBIT and net sales have an average fair value of $16.10 per share. The fair value was determined by using the publicly traded share price as of the date of grant. The performance based shares related to the Company’s stock price have an average fair value of $12.60 per share. The fair value was determined by using the Monte Carlo valuation method. For awards with performance conditions, the Company recognizes share-based compensation cost on a straight-line basis for each performance criteria over the implied service period. During the three months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to performance based shares of $299 and $100, respectively. During the nine months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to performance based shares of $920 and $240, respectively. As of September 30, 2017, the Company had approximately $1,901 of unamortized stock-based compensation expense related to unvested performance based shares. This amount will be recognized over the weighted-average period of 2.0 years. This projected expense will change if any performance based shares are granted or cancelled prior to the respective reporting periods or if there are any changes required to be made for estimated forfeitures. Performance Incentive Stock Options—During the nine months ended September 30, 2017 and 2016, the Company did not grant any employees performance incentive stock options to acquire shares of common stock. Performance option activity is as follows:
|  | Incentive Stock Option Plans |  |  | Weighted Average Price Per Share |  |  | Exercisable Weighted Average Price Per Share |
Balance outstanding, December 31, 2016 and March 31, 2017 |  |  | 82,334 |  |  | $ | 11.49 |  |  | $ | — |
Options forfeited |  |  | (50 | ) |  |  | 11.49 |  |  |  | — |
Balance outstanding, June 30, 2017 |  |  | 82,284 |  |  |  | 11.49 |  |  |  | — |
Options forfeited |  |  | (618 | ) |  |  | 11.49 |  |  |  | — |
Balance outstanding, September 30, 2017 |  |  | 81,666 |  |  | $ | 11.49 |  |  | $ | — |
Information relating to stock options at September 30, 2017 summarized by exercise price is as follows:
|  | Outstanding Weighted Average |  |  | Exercisable Weighted Average |
Exercise Price Per Share |  | Shares |  |  | Remaining Life (Months) |  |  | Exercise Price |  |  | Shares |  |  | Exercise Price |
Performance Incentive Stock Option Plan: |  |  | 81,666 |  |  |  | 3 |  |  | $ | 11.49 |  |  |  | — |  |  | $ | — |
The weighted average exercise prices for options granted and exercisable and the weighted average remaining contractual life for options outstanding as of September 30, 2017 are as follows:
As of September 30, 2017 |  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (Months) |  |  | Intrinsic Value (thousands) |
Performance Incentive Stock Option Plan: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding |  |  | 81,666 |  |  | $ | 11.49 |  |  |  | 3 |  |  | $ | 932 |
Expected to Vest |  |  | 79,814 |  |  | $ | 11.49 |  |  |  | 3 |  |  | $ | 911 |
Exercisable |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | — |
During the three months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to performance stock options of $249 and $11, respectively. During the nine months ended September 30, 2017 and 2016, the Company recognized stock-based compensation related to performance stock options of $347 and $64, respectively. As of September 30, 2017, the Company assessed the likelihood of achieving the performance measures based on peer group information currently available for the performance based options granted in 2014. Based on the performance thus far, the Company has concluded that it is likely that the performance measure based on EBIT and net sales will be met at 200% of targeted performance and have considered the related additional expense as of September 30, 2017. The performance options based on market price will also be met at 200%, however, the market condition is reflected in the grant date fair value valuation and no additional expenses were recognized as of September 30, 2017. As of September 30, 2017, the Company had approximately $69 of unamortized stock-based compensation expenses related to unvested performance incentive stock options outstanding. This amount will be recognized over the weighted-average period of 0.3 years. This projected expense will change if any performance incentive stock options are granted or cancelled prior to the respective reporting periods or if there are any changes required to be made for estimated forfeitures. In March 2016, FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718). The new standard changes the accounting for certain aspects of share-based payments to employees. The standard requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital (“APIC”) pools. The standard also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting. Cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity in the statement of cash flows. In addition, the standard allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The new standard is effective for fiscal years beginning after December 15, 2016 with early adoption permitted. The Company assessed the impact of the adoption of this new standard and determined there was no material impact on the 2016 consolidated financial statements. The Company has considered the different options for treatment of forfeitures in accounting for stock compensation and has elected to continue to account for such adjustments on the estimated basis. The Company adopted this new standard as of January 1, 2017 on a prospective basis. The impact of this adoption was not material.

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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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