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Equity Plan Awards | 12 Months Ended
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Dec. 31, 2022
Share-Based Payment Arrangement [Abstract] |
Equity Plan Awards | (13) Equity Plan Awards Under the Company’s Equity Incentive Plan of 1993, as amended (“the Plan”), all employees are eligible to receive non-assignable and non-transferable restricted stock, options to purchase common stock, and other forms of equity. As of December 31, 2022, the number of securities remaining available for future issuance under the Plan is 1,524,567. The below tables illustrate the Company’s stock-based compensation, unamortized stock-based compensation, and remaining weighted average period for the years ended December 31, 2022, 2021 and 2020. This projected expense will change if any stock options and restricted stock are granted or cancelled prior to the respective reporting periods, or if there are any changes required to be made for estimated forfeitures.
|  | Stock-Based Compensation |  |  | Unamortized Stock-Based Compensation |  |  | Remaining Weighted Average Period (years) |
December 31, 2022 |  |  |  |  |  |  |  |  |
Restricted Stock |  | $ | 4,407 |  |  | $ | 6,585 |  |  |  | 1.8 |
Unrestricted Stock |  |  | 499 |  |  |  | 217 |  |  |  | 0.4 |
Performance-Based Restricted Stock |  |  | 778 |  |  |  | 2,441 |  |  |  | 1.8 |
Total |  | $ | 5,684 |  |  | $ | 9,243 |  |  |  |
December 31, 2021 |  |  |  |  |  |  |  |  |
Restricted Stock |  | $ | 5,682 |  |  | $ | 6,804 |  |  |  | 1.8 |
Unrestricted Stock |  |  | 421 |  |  |  | 187 |  |  |  | 0.4 |
Performance-Based Restricted Stock |  |  | 777 |  |  |  | 2,888 |  |  |  | 1.8 |
Total |  | $ | 6,880 |  |  | $ | 9,879 |  |  |  |
December 31, 2020 |  |  |  |  |  |  |  |  |
Restricted Stock |  | $ | 3,166 |  |  | $ | 6,954 |  |  |  | 1.9 |
Unrestricted Stock |  |  | 461 |  |  |  | 183 |  |  |  | 0.4 |
Performance-Based Restricted Stock |  |  | 2,934 |  |  |  | 3,352 |  |  |  | 1.9 |
Total |  | $ | 6,561 |  |  | $ | 10,489 |  |  |  |
The Company also granted stock options in past periods. All outstanding stock options are fully vested and exercisable and no expense was recorded during the years ended December 31, 2022, 2021 and 2020. Restricted and Unrestricted Stock A summary of nonvested restricted and unrestricted stock is presented below:
|  | December 31, 2022 |  |  | December 31, 2021 |
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Nonvested shares at January 1 st |  |  | 817,290 |  |  | $ | 17.04 |  |  |  | 820,624 |  |  | $ | 16.64 |
Granted |  |  | 256,417 |  |  |  | 23.53 |  |  |  | 295,619 |  |  |  | 20.00 |
Vested |  |  | (262,521 | ) |  |  | 17.84 |  |  |  | (244,651 | ) |  |  | 19.23 |
Forfeited |  |  | (69,136 | ) |  |  | 18.58 |  |  |  | (54,302 | ) |  |  | 17.11 |
Nonvested shares at December 31 st |  |  | 742,050 |  |  | $ | 18.86 |  |  |  | 817,290 |  |  | $ | 17.04 |
Performance-Based Restricted Stock A summary of nonvested performance-based stock is presented below:
|  | December 31, 2022 |  |  | December 31, 2021 |
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |
Nonvested shares at January 1 st |  |  | 379,061 |  |  | $ | 16.43 |  |  |  | 391,771 |  |  | $ | 16.26 |
Granted |  |  | 83,190 |  |  |  | 23.63 |  |  |  | 102,043 |  |  |  | 20.03 |
Additional granted based on performance achievement |  |  | (68,484 | ) |  |  | 16.87 |  |  |  | 71,180 |  |  |  | 20.53 |
Vested |  |  | (51,308 | ) |  |  | 17.09 |  |  |  | (175,087 | ) |  |  | 19.78 |
Forfeited |  |  | (23,760 | ) |  |  | 17.21 |  |  |  | (10,846 | ) |  |  | 16.89 |
Nonvested shares at December 31 st |  |  | 318,699 |  |  | $ | 18.05 |  |  |  | 379,061 |  |  | $ | 16.43 |
Performance Based Restricted Stock Granted in 2022— During the year ended December 31, 2022, the Company issued a total of 83,190 performance-based shares to employees. The shares granted during 2022 have an average fair value of $23.63. The fair value was determined by using the publicly traded share price as of the market close on 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 April 20, 2025, with a measurement period commencing January 1, 2022, and ending December 31, 2024. Eighty percent of these performance-based shares are based upon the financial performance of the Company, specifically, an earnings before interest and 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 2021 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 Restricted Stock Granted in 2021— During the year ended December 31, 2021, the Company issued a total of 102,043 performance-based shares to employees. The shares granted during 2021 have an average fair value of $20.03. The fair value was determined by using the publicly traded share price as of the market close on 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 April 16, 2024, with a measurement period commencing January 1, 2021, and ending December 31, 2023. Eighty percent of these performance-based shares are based upon the financial performance of the Company, specifically, an 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 2020 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 Restricted Stock Granted in 2020— During the year ended December 31, 2020, the Company issued a total of 160,706 performance-based shares to employees. The shares granted during 2020 have an average fair value of $14.29. The fair value was determined by using the publicly traded share price as of the market close on 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 May 13, 2023, with a measurement period commencing October 1, 2020, and ending March 31, 2023. Eighty percent of these performance-based shares are based upon the financial performance of the Company, specifically, an 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 2020 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. In 2022, the Company assessed the likelihood of achieving the performance measures based on peer group information currently available for the performance-based shares granted in 2020. Based on the performance thus far, the Company has concluded that it is likely that the performance measure based on EBIT will not be met and net sales will be met at 150% of targeted performance and have recorded the related additional expense in 2022. The performance shares based on market price are expected to be met at 166% of targeted performance. The effect of market conditions for performance shares based on market are included in the grant date fair value valuation and no additional expenses were recognized in 2022. During 2022, the Company concluded that the performance measure based on EBIT and net sales for the performance-based shares granted in 2019, when compared to the peer group, was met at 0% for EBIT and 123.8% for net sales of targeted performance and all related additional expenses were recorded as of December 31, 2022. The 2019 performance shares based on market price was met at 28.5%; however, the market condition is reflected in the grant date fair value valuation and no additional expenses were recognized. As a result, 68,484 shares were forfeited since the Company did not achieve performance targets when compared to the peer group. Stock Options Under the terms of the Company’s ISOP, under which options to purchase common stock can be issued, all employees are eligible to receive non-assignable and non-transferable options to purchase shares. The exercise price of any option may not be less than the fair market value of the shares on the date of grant; provided, however, that the exercise price of any option granted to an eligible employee owning more than 10% of the outstanding common stock may not be less than 110% of the fair market value of the shares underlying such option on the date of grant. No options granted may be exercisable more than ten years after the date of grant. In 2022, 2021 and 2020, no options were granted. Incentive Stock Option Plans Activity of the incentive stock option plans:
|  | Number of Shares |  |  | Weighted Average Price Per Share |
Balance outstanding, December 31, 2019 |  |  | 332,823 |  |  | $ | 9.14 |
Options exercised |  |  | (196,736 | ) |  |  | 7.79 |
Options forfeited |  |  | (13,000 | ) |  |  | 7.50 |
Balance outstanding, December 31, 2020 |  |  | 123,087 |  |  |  | 11.48 |
Options exercised |  |  | (15,051 | ) |  |  | 11.41 |
Balance outstanding, December 31, 2021 |  |  | 108,036 |  |  |  | 11.49 |
Options exercised |  |  | (39,140 | ) |  |  | 11.49 |
Balance outstanding, December 31, 2022 |  |  | 68,896 |  |  | $ | 11.49 |
Outstanding stock options at December 31, 2022, summarized by exercise price:
|  | Outstanding Weighted Average |
Exercise Price Per Share |  | Number of Shares |  |  | Remaining Life (Months) |  | Exercise Price |
Outstanding stock options, December 31, 2022 |  |  | 68,896 |  |  | 24 |  | $ | 11.49 |
Performance Incentive Stock Option Plan Activity of the performance incentive stock option plan:
|  | Number of Shares |  |  | Weighted Average Price Per Share |  |
Balance outstanding, December 31, 2019 |  |  | 120,782 |  |  | $ | 11.49 |  |
Options exercised |  |  | (6,124 | ) |  |  | 11.49 |  |
Balance outstanding, December 31, 2021 and 2020 |  |  | 114,658 |  |  | $ | 11.49 |  |
Options exercised |  |  | (32,850 | ) |  |  | 11.49 |  |
Balance outstanding, December 31, 2022 |  |  | 81,808 |  |  | $ | 11.49 |  |
All the performance incentive stock options outstanding as of December 31, 2022, have an exercise price per share of $11.49 and a remaining life of 24 months. The total intrinsic value of options exercised during 2022, 2021, and 2020 was $877, $119, and $1,393, respectively. Cash received from stock options exercised during 2022, 2021, and 2020 was $827, $172, and $1,533, respectively. All outstanding options are fully vested and the intrinsic value amounted to $1,540 as of December 31, 2022.

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