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Stock Based Compensation | 6 Months Ended
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Jun. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stock Based Compensation | 13. 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 six months ended June 30, 2019 and 2018.
|  | Stock-Based Compensation for the Three months ended |  |  | Stock-Based Compensation for the Six months ended |  |  | Unamortized Stock-Based Compensation |  |  | Remaining Weighted Average Period (years) |
June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restricted Stock |  | $ | 981 |  |  | $ | 1,669 |  |  | $ | 8,091 |  |  |  | 2.2 |
Unrestricted Stock |  |  | 99 |  |  |  | 195 |  |  |  | 385 |  |  |  | 0.9 |
Performance Based Restricted Stock |  |  | 430 |  |  |  | 1,131 |  |  |  | 3,863 |  |  |  | 2.2 |
Total |  | $ | 1,510 |  |  | $ | 2,995 |  |  | $ | 12,339 |  |  |  |  |
June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restricted Stock |  | $ | 892 |  |  | $ | 1,557 |  |  | $ | 7,071 |  |  |  | 2.2 |
Unrestricted Stock |  |  | 96 |  |  |  | 193 |  |  |  | 353 |  |  |  | 0.9 |
Performance Based Restricted Stock |  |  | 481 |  |  |  | 1,028 |  |  |  | 3,336 |  |  |  | 2.2 |
Total |  | $ | 1,469 |  |  | $ | 2,778 |  |  | $ | 10,760 |  |  |  |  |
Stock Options—During the three and six months ended June 30, 2019, 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, 2018 |  |  | 384,064 |  |  | $ | 9.10 |  |  | $ | 9.10 |
Options exercised |  |  | (14,677 | ) |  |  | 9.18 |  |  |  | — |
Balance outstanding, March 31, 2019 |  |  | 369,387 |  |  |  | 9.10 |  |  |  | 9.10 |
Options exercised |  |  | (4,313 | ) |  |  | 8.71 |  |  |  | — |
Balance outstanding, June 30, 2019 |  |  | 365,074 |  |  | $ | 9.10 |  |  | $ | 9.10 |
Information relating to stock options at June 30, 2019, 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 |  |  | 218,045 |  |  |  | 17 |  |  | $ | 7.5 |  |  |  | 218,045 |  |  | $ | 7.50 |
$11.32—$14.49 |  |  | 147,029 |  |  |  | 64 |  |  | $ | 11.48 |  |  |  | 147,029 |  |  | $ | 11.48 |
|  |  | 365,074 |  |  |  |  |  |  | $ | 9.10 |  |  |  | 365,074 |  |  | $ | 9.10 |
The weighted average exercise prices for options granted, and exercisable, and the weighted average remaining contractual life for options outstanding as of June 30, 2019, were as follows:
As of June 30, 2019 |  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (Months) |  |  | Intrinsic Value (thousands) |
Incentive Stock Option Plan: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding |  |  | 365,074 |  |  | $ | 9.10 |  |  |  | 36 |  |  | $ | 2,302 |
Expected to Vest |  |  | 365,074 |  |  | $ | 9.10 |  |  |  | 36 |  |  | $ | 2,302 |
Exercisable |  |  | 365,074 |  |  | $ | 9.10 |  |  |  | 36 |  |  | $ | 2,302 |
Common stock grants — A summary of non-vested shares as of, and for, the three and six months ended June 30, 2019 and 2018 is presented below:
|  | Six Months Ended June 30, 2019 |  |  | Six Months Ended June 30, 2018 |
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Nonvested shares at December 31st |  |  | 587,210 |  |  | $ | 17.59 |  |  |  | 391,753 |  |  | $ | 15.61 |
Granted |  |  | 297,679 |  |  |  | 17.34 |  |  |  | 254,972 |  |  |  | 19.97 |
Vested |  |  | (105,582 | ) |  |  | 15.21 |  |  |  | (8,800 | ) |  |  | 12.07 |
Forfeited |  |  | (6,589 | ) |  |  | 17.69 |  |  |  | (5,265 | ) |  |  | 16.51 |
Nonvested shares at March 31st |  |  | 772,718 |  |  |  | 17.77 |  |  |  | 632,660 |  |  |  | 17.41 |
Granted |  |  | 40,522 |  |  |  | 13.34 |  |  |  | 22,308 |  |  |  | 23.66 |
Vested |  |  | (32,771 | ) |  |  | 13.35 |  |  |  | (20,313 | ) |  |  | 22.82 |
Forfeited |  |  | (21,184 | ) |  |  | 17.77 |  |  |  | (6,424 | ) |  |  | 17.25 |
Nonvested shares at June 30th |  |  | 759,285 |  |  | $ | 17.72 |  |  |  | 628,231 |  |  | $ | 17.40 |
Common stock grants — During the six months ended June 30, 2019, the Company issued a total of 338,201 shares of common stock to employees and directors of which 31,771 shares vested immediately, 9,000 shares will vest between a range of 95 days to 1,115 days, 6,751 shares will vest in three equal tranches on the employee’s anniversary, and the remaining shares will cliff vest after three years of service. The shares granted in 2019 were average fair valued at $16.86 per share. The fair value was determined by using the publicly traded share price as of the market close on the date of grant. The Company will recognize as expense the fair value of restricted shares over the required service period. During the six months ended June 30, 2018, the Company issued a total of 277,280 shares of common stock to employees and directors of which 19,313 shares vested immediately, 19,760 shares will vest between a range of 178 days to 1,060 days, and the remaining shares will cliff vest after three years of service. The shares granted in 2018 were average fair valued at $20.27 per share. The fair value was determined by using the publicly traded share price as of the market close on the date of grant. The Company will recognize as expense the fair value of restricted shares over the required service period. During the three months ended June 30, 2019 and 2018, the Company recognized stock-based compensation related to restricted shares of $981 and $892, respectively. During the six months ended June 30, 2019 and 2018, the Company recognized stock-based compensation related to restricted shares of $1,669 and $1,557, respectively. As of June 30, 2019, the Company had approximately $8,091 of unamortized stock-based compensation related to unvested restricted shares. This amount will be recognized over the weighted-average period of 2.2 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 six months ended June 30, 2019 and 2018, respectively is presented below:
|  | Six Months Ended June 30, 2019 |  |  | Six Months Ended June 30, 2018 |
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Nonvested shares at December 31st |  |  | 287,077 |  |  | $ | 16.87 |  |  |  | 186,057 |  |  | $ | 14.93 |
Granted |  |  | 137,557 |  |  |  | 16.47 |  |  |  | 122,446 |  |  |  | 18.79 |
Additional granted based on performance achievement |  |  | 41,568 |  |  |  | 12.88 |  |  |  | — |  |  |  | — |
Vested |  |  | (90,872 | ) |  |  | 14.73 |  |  |  | (14,625 | ) |  |  | 11.01 |
Forfeited |  |  | (3,543 | ) |  |  | 15.98 |  |  |  | (1,765 | ) |  |  | 15.40 |
Nonvested shares at March 31st |  |  | 371,787 |  |  |  | 16.81 |  |  |  | 292,113 |  |  |  | 16.74 |
Granted |  |  | — |  |  |  | — |  |  |  | 3,850 |  |  |  | 22.69 |
Forfeited |  |  | (14,022 | ) |  |  | 17.11 |  |  |  | (2,179 | ) |  |  | 17.67 |
Nonvested shares at June 30th |  |  | 357,765 |  |  | $ | 16.80 |  |  |  | 293,784 |  |  | $ | 16.81 |
Performance-Based Shares — During the six months ended June 30, 2019, the Company issued a total of 137,557 performance-based shares to employees. The shares granted have an average fair value of $16.47. The fair value was determined by using the publicly traded share price as of the market close on the date of grant. The Company will recognize, as expense, the fair value of the performance based shares over the required service period from grant date. The shares will cliff vest on March 28, 2022 with a measurement period commencing January 1, 2019 and ending December 31, 2021. 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 2018 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. Performance-Based Shares — During the six months ended June 30, 2018, the Company issued a total of 126,296 performance-based shares to employees. The shares granted have an average fair value of $18.91. The fair value was determined by using the publicly traded share price as of the market close on the date of grant. The Company will recognize as expense the fair value of the performance-based shares over the required service period from grant date. The majority of the shares will cliff vest on March 9, 2021 with a measurement period commencing January 1, 2018 and ending December 31, 2020. 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 2017 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 June 30, 2019, performance-based shares related to EBIT and net sales have an average fair value of $17.34 per share. The fair value was determined by using the publicly traded share price as of the market close on the date of grant. The performance based shares related to the Company’s stock price have an average fair value of $15.46 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 June 30, 2019 and 2018, the Company recognized stock-based compensation related to performance-based shares of $430 and $481, respectively. During the six months ended June 30, 2019 and 2018, the Company recognized stock-based compensation related to performance based shares of $1,131 and $1,028, respectively. As of June 30, 2019, the Company had approximately $3,863 of unamortized stock-based compensation expense related to unvested performance-based shares. This amount will be recognized over the weighted-average period of 2.2 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 six months ended June 30, 2019 and 2018, 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, 2018 |  |  | 140,411 |  |  | $ | 11.49 |  |  | $ | 11.49 |
Options exercised |  |  | (5,735 | ) |  |  | 11.49 |  |  |  | 11.49 |
Balance outstanding, March 31, 2019 and June 30, 2019 |  |  | 134,676 |  |  | $ | 11.49 |  |  | $ | 11.49 |
Information relating to stock options at June 30, 2019 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: |  |  | 134,676 |  |  |  | 66 |  |  | $ | 11.49 |  |  |  | 134,676 |  |  | $ | 11.49 |
The weighted average exercise prices for options granted and exercisable and the weighted average remaining contractual life for options outstanding as of June 30, 2019 are as follows:
As of June 30, 2019 |  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (Months) |  |  | Intrinsic Value (thousands) |
Performance Incentive Stock Option Plan: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding |  |  | 134,676 |  |  | $ | 11.49 |  |  |  | 66 |  |  | $ | 528 |
Expected to Vest |  |  | 134,676 |  |  | $ | 11.49 |  |  |  | 66 |  |  | $ | 528 |
Exercisable |  |  | 134,676 |  |  | $ | 11.49 |  |  |  | 66 |  |  | $ | 528 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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