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Stock Based Compensation | 3 Months Ended
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Mar. 31, 2020
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 and employee stock options 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 months ended March 31, 2020 and 2019.
|  | Stock-Based Compensation for the Three months ended |  |  | Unamortized Stock-Based Compensation |  |  | Remaining Weighted Average Period (years) |
March 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |
Restricted Stock |  | $ | 776 |  |  | $ | 4,555 |  |  |  | 1.5 |
Unrestricted Stock |  |  | 123 |  |  |  | 82 |  |  |  | 0.2 |
Performance-Based Restricted Stock |  |  | 458 |  |  |  | 2,288 |  |  |  | 1.7 |
Total |  | $ | 1,357 |  |  | $ | 6,925 |  |  |  |  |
March 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |
Restricted Stock |  | $ | 688 |  |  | $ | 9,238 |  |  |  | 2.4 |
Unrestricted Stock |  |  | 96 |  |  |  | 64 |  |  |  | 0.2 |
Performance-Based Restricted Stock |  |  | 701 |  |  |  | 4,524 |  |  |  | 2.4 |
Total |  | $ | 1,485 |  |  | $ | 13,826 |  |  |  |  |
Option activity within each plan is as follows:
|  | Incentive Stock Option Plans |  |  | Weighted Average Price Per Share |
Balance outstanding, December 31, 2019 |  |  | 332,823 |  |  | $ | 9.14 |
Options exercised |  |  | (15,836 | ) |  |  | 8.83 |
Balance outstanding, March 31, 2020 |  |  | 316,987 |  |  | $ | 9.16 |
Information relating to stock options at March 31, 2020, summarized by exercise price is as follows:
|  | Outstanding Weighted Average |
Exercise Price Per Share |  | Shares |  |  | Remaining Life (Months) |  |  | Exercise Price |
Incentive Stock Option Plan: |  |  |  |  |  |  |  |  |  |  |  |
$7.50 |  |  | 185,150 |  |  |  | 8 |  |  | $ | 7.5 |
$11.32—$14.49 |  |  | 131,837 |  |  |  | 55 |  |  | $ | 11.48 |
|  |  | 316,987 |  |  |  |  |  |  | $ | 9.16 |
The weighted average exercise prices for options granted, and exercisable, and the weighted average remaining contractual life for options outstanding as of March 31, 2020, were as follows:
As of March 31, 2020 |  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (Months) |  |  | Intrinsic Value (thousands) |
Incentive Stock Option Plan: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding |  |  | 316,987 |  |  | $ | 9.16 |  |  |  | 28 |  |  | $ | 1,681 |
Expected to Vest |  |  | 316,987 |  |  | $ | 9.16 |  |  |  | 28 |  |  | $ | 1,681 |
Exercisable |  |  | 316,987 |  |  | $ | 9.16 |  |  |  | 28 |  |  | $ | 1,681 |
Common stock grants — A summary of non-vested shares as of and for the three months ended March 31, 2020 and 2019 is presented below:
|  | Three Months Ended March 31, 2020 |  |  | Three Months Ended March 31, 2019 |
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Nonvested shares at December 31st |  |  | 719,845 |  |  | $ | 17.67 |  |  |  | 587,210 |  |  | $ | 17.59 |
Granted |  |  | 4,185 |  |  |  | 18.63 |  |  |  | 290,679 |  |  |  | 17.34 |
Vested |  |  | (213,781 | ) |  |  | 16.18 |  |  |  | (105,582 | ) |  |  | 15.21 |
Forfeited |  |  | (14,715 | ) |  |  | 18.08 |  |  |  | (6,589 | ) |  |  | 17.69 |
Nonvested shares at March 31st |  |  | 495,534 |  |  | $ | 18.31 |  |  |  | 765,718 |  |  | $ | 17.77 |
Common stock grants — During the three months ended March 31, 2020, the Company issued a total of 4,185 shares of restricted common stock to employees. 2,000 shares will vest in equal tranches on the first, second, and third anniversaries of grant date, 1,000 shares will cliff vest on the first anniversary of employee’s hire date, 685 shares will cliff vest on the third anniversary of employee’s hire date, and the remaining 500 shares will cliff vest on the six month anniversary of the employee’s hire date. The shares granted in 2020 were average fair valued at $18.63 per share. The fair value was determined by using the publicly traded share price at market close as of the date of grant. The Company will recognize as expense the value of restricted shares over the respective required service period. During the three months ended March 31, 2019, the Company issued a total of 290,679 shares of restricted common stock to employees. The shares will cliff vest after three years of service. The shares granted in 2019 were average fair valued at $17.34 per share. The fair value was determined by using the publicly traded share price at market close as of the date of grant. The Company will recognize as expense the value of restricted shares over the required service period. As of March 31, 2020, the Company had approximately $4,555 of unamortized stock-based compensation related to unvested restricted shares. This amount will be recognized over the weighted-average period of 1.5 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 three months ended March 31, 2020 and 2019, respectively is presented below:
|  | Three Months Ended March 31, 2020 |  |  | Three Months Ended March 31, 2019 |
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Nonvested shares at December 31st |  |  | 345,432 |  |  | $ | 16.92 |  |  |  | 287,077 |  |  | $ | 16.87 |
Granted |  |  | — |  |  |  | — |  |  |  | 137,557 |  |  |  | 16.47 |
Additional granted based on performance achievement |  |  | 76,445 |  |  |  | 16.56 |  |  |  | 41,568 |  |  |  | 12.88 |
Vested |  |  | (184,785 | ) |  |  | 15.87 |  |  |  | (90,872 | ) |  |  | 14.73 |
Forfeited |  |  | (3,759 | ) |  |  | 17.23 |  |  |  | (3,543 | ) |  |  | 15.98 |
Nonvested shares at March 31st |  |  | 233,333 |  |  | $ | 17.63 |  |  |  | 371,787 |  |  | $ | 16.81 |
Performance-Based Shares — During the three months ended March 31, 2020, the Company did not issue performance-based shares to employees. As of March 31, 2020, the Company has concluded that the performance measure based on EBIT and net sales for the performance based shares granted in February and April of 2017, when compared to the peer group, were met at 200% of targeted performance and all related additional expenses were recorded as of March 31, 2020. The performance shares based on market price were met at 50% and 125% for February and April 2017, respectively, however, the market condition is reflected in the grant date fair value valuation and no additional expenses were recognized as of March 31, 2020. As a result, 76,445 additional shares were earned since the Company achieved performance targets when compared to the peer group. During the three months ended March 31, 2019, the Company issued a total of 137,557 performance-based shares to employees. The shares granted during the first quarter of 2019 have an average fair value of $16.47. The fair value was determined by using the publicly traded share price at market close as of the date of grant and Monte Carlo valuation method. 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 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 tax (“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. As of March 31, 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 at market close as of the date of grant. The performance-based shares related to the Company’s stock price have an average fair value of $13.01 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. As of March 31, 2020, the Company had approximately $2,288 of unamortized stock-based compensation expense related to unvested performance-based shares. This amount will be recognized over the weighted-average period of 1.7 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 three months ended March 31, 2020 and 2019, 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, 2019 |  |  | 120,782 |  |  | $ | 11.49 |  |  | $ | 11.49 |
Options exercised |  |  | (3,035 | ) |  |  | 11.49 |  |  |  | 11.49 |
Balance outstanding, March 31, 2020 |  |  | 117,747 |  |  | $ | 11.49 |  |  | $ | 11.49 |
Information relating to stock options as of March 31, 2020 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: |  |  | 117,747 |  |  |  | 57 |  |  | $ | 11.49 |  |  |  | 117,747 |  |  | $ | 11.49 |
The weighted average exercise prices of options granted and exercisable and the weighted average remaining contractual life for options outstanding as of March 31, 2020 are as follows:
As of March 31, 2020 |  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (Months) |  |  | Intrinsic Value (thousands) |
Performance Incentive Stock Option Plan: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Outstanding |  |  | 117,747 |  |  | $ | 11.49 |  |  |  | 57 |  |  | $ | 350 |
Expected to Vest |  |  | 117,747 |  |  | $ | 11.49 |  |  |  | 57 |  |  | $ | 350 |
Exercisable |  |  | 117,747 |  |  | $ | 11.49 |  |  |  | 57 |  |  | $ | 350 |

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- Definition The entire disclosure for share-based payment arrangement. + 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 + Details
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