NOTE 13 – STOCK-BASED COMPENSATION PLANS
The Company grants stock options and stock
equivalent units (“SEUs”) from time to time as a
long-term performance incentive. In certain cases the grants are
subject to performance conditions such as the Company’s stock
price. Where performance conditions apply the Monte Carlo
simulation model is used to determine the fair values. Otherwise
the Black-Scholes model is used to determine the fair values.
Stock option plans
The following table summarizes the transactions of
the Company’s stock option plans for the nine months ended
September 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Options |
|
|
Weighted
Average
Exercise
Price |
|
|
Weighted
Average
Grant-Date
Fair Value |
|
Outstanding at December 31, 2016
|
|
|
570,994 |
|
|
$ |
20.38 |
|
|
$ |
21.68 |
|
Granted - at discount
|
|
|
79,664 |
|
|
$ |
0.00 |
|
|
$ |
61.39 |
|
- at market value
|
|
|
18,843 |
|
|
$ |
70.60 |
|
|
$ |
16.84 |
|
Exercised
|
|
|
(83,255 |
) |
|
$ |
12.56 |
|
|
$ |
23.86 |
|
Forfeited
|
|
|
(3,805 |
) |
|
$ |
15.91 |
|
|
$ |
22.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at September 30, 2017
|
|
|
582,441 |
|
|
$ |
20.64 |
|
|
$ |
26.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2017, there were 44,443 stock
options that were exercisable, of which 9,421 had performance
conditions attached.
The stock option compensation cost for the first
nine months of 2017 was $3.4 million (first nine months of 2016
– $2.8 million). The total intrinsic value of options
exercised in the first nine months of 2017 was $2.0 million (first
nine months of 2016 – $1.8 million).
The total compensation cost related to non-vested
stock options not yet recognized at September 30, 2017 was
$6.7 million and this cost is expected to be recognized over the
weighted-average period of 2.05 years.
Stock equivalent units
The following table summarizes the transactions of the
Company’s SEUs for the nine months ended September 30,
2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of SEUs |
|
|
Weighted
Average
Exercise
Price |
|
|
Weighted
Average
Grant-Date
Fair Value |
|
Outstanding at December 31, 2016
|
|
|
279,815 |
|
|
$ |
3.77 |
|
|
$ |
33.40 |
|
Granted - at discount
|
|
|
180,249 |
|
|
$ |
0.00 |
|
|
$ |
62.76 |
|
- at market value
|
|
|
5,530 |
|
|
$ |
70.60 |
|
|
$ |
16.84 |
|
Exercised
|
|
|
(34,054 |
) |
|
$ |
5.47 |
|
|
$ |
27.09 |
|
Forfeited
|
|
|
(16,075 |
) |
|
$ |
0.00 |
|
|
$ |
33.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at September 30, 2017
|
|
|
415,465 |
|
|
$ |
3.03 |
|
|
$ |
46.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2017 there were 54,759 SEUs that are
exercisable, of which 49,391 had performance conditions
attached.
The charges for SEUs are spread over the life of
the award subject to a revaluation to fair value each quarter. The
revaluation may result in a charge or a credit to the income
statement in the quarter dependent upon our share price and other
performance criteria.
The SEU compensation cost for the first nine months
of 2017 was $3.6 million (first nine months of 2016 – $3.7
million). The total intrinsic value of SEUs exercised in the first
nine months of 2017 was $1.1 million (first nine months of 2016
– $1.5 million).
The weighted-average remaining vesting period of non-vested SEUs is
1.93 years.