Accounting for Share-Based Payments |
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| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting for Share-Based Payments | Accounting for Share-Based Payments Overview of Share-Based Payment Plans
The Company has a number of active and inactive equity incentive plans (the "Incentive Plans") under which the Company has been authorized to grant share-based awards to key employees and non-employee directors. A total of 0.8 million shares have been authorized for grant to key employees and non-employee directors under the Company's currently active Incentive Plans. As of December 31, 2025, there were 0.4 million shares remaining available for grants under the currently active equity Incentive Plans.
The Company recognized share-based compensation expense within SG&A expense on the consolidated statements of income (loss) of $1.3 million and $0.8 million in 2025 and 2024, respectively.
Total unrecognized share-based payment expense for all share-based payment plans was $1.0 million at December 31, 2025, of which $0.6 million is expected to be recognized in 2026 and $0.4 million thereafter. This results in these amounts being recognized over a weighted-average period of 2.34 years.
Stock Options
Stock options have terms of 10 years and vest in 20% or 33% increments annually on a cumulative basis, beginning one year after the date of grant, and are assigned an exercise price equal to the average of the high and low common stock price on the day prior to the date of grant. Options are expensed on a straight-line basis over the grant vesting period, which is considered to be the requisite service period. There was no compensation expense charged against income for options in 2025 or 2024.
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. When determining expected volatility, the Company considers the historical volatility of the Company’s stock price. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant, based on the options’ expected term. The Company granted no new options in 2025 or 2024.
Transactions related to stock options for the year ended December 31, 2025 are summarized as follows:
Restricted Stock Awards
Restricted stock awards are valued based on the average of the high and low common stock price on the day prior to the date of grant. In general, these awards vest in 33% increments annually on a cumulative basis, beginning one year after the date of grant. In order for the awards to vest, the employee must be in the continuous employment of the Company since the date of the award. Except for death, disability, or qualifying retirement, any portion of an award that has not vested is forfeited upon termination of employment. An employee is not entitled to any voting rights with respect to any shares not yet vested, and the shares are not transferable.
All awards are expensed on a straight-line basis over the grant vesting period, which is considered to be the requisite service period. The weighted average period over which the restricted stock awards compensation expense is expected to be recognized is 2.53 years.
Transactions related to restricted stock awards for the year ended December 31, 2025 are summarized as follows:
Performance Stock Units
The Company issues performance stock units classified as equity awards. In order for the awards to vest, the employee must be in the continuous employment of the Company since the date of the award. Except for death, disability, or qualifying retirement, any portion of an award that has not vested is forfeited upon termination of employment. An employee is not entitled to any voting rights with respect to any shares not yet vested, and the shares are not transferable.
The Company issues performance stock units which contain performance and service conditions that must be satisfied for an employee to earn the right to benefit from the award. Expense is recognized on a straight-line basis over the requisite service period, based on the probability of achieving the performance condition, with changes in expectations recognized as an adjustment to earnings in the period of the change. Compensation cost is not recognized for performance share units that do not vest because service or performance conditions are not satisfied, and any previously recognized compensation cost is reversed. The performance condition for these awards is based on the achievement of specified Adjusted EBITDA targets.
In general, 0% to 150% of the Company’s performance share units vest at the end of a specified service period from the date of grant based upon achievement of the performance condition, with both the service period and performance condition specified in the performance share unit agreement.
Transactions related to performance share units which have a performance and service condition for the year ended December 31, 2025 are as follows:
The weighted-average grant-date price per unit of performance stock units granted with a performance and service condition was $12.44 in 2025. The Company did not grant performance stock units granted with a performance and service condition in 2024.
The Company also issues performance stock units which contain market conditions that must be satisfied for an employee to earn the right to benefit from the award. Performance stock units vest upon the achievement of specific thirty-day volume-weighted average price targets of a share of the Company's common stock over a period of three years.
The performance stock units are divided into tranches, each one vesting on the date the thirty-day volume-weighted average price of the Company's common stock meets or exceeds the price target are summarized in the table below:
The fair value of the performance stock units granted with a market performance condition are determined using a Monte Carlo simulation considering historical performance of the Company's stock as well as the probability of attaining the market performance condition determined on the date of grant. Expense is recognized on a straight-line method over the requisite service period. Performance stock units do not have dividend rights. The weighted average period over which the performance stock units compensation expense is expected to be recognized is 2.27 years.
Transactions related to performance stock units which have a market condition for the year ended December 31, 2025 are as follows:
The Company did not grant performance stock units with a market condition in 2025. The weighted-average grant-date fair value per unit of performance stock units granted with a market condition was $2.61 in 2024.
There were 11,590 shares of performance stock units with a market condition vested in 2025. There were no performance stock units with a market condition vested in 2024.
Non-Employee Director Compensation Plan
Non-employee directors are paid an annual retainer of $115,000. Each non-employee director appointed to serve as a chairperson of a standing board committee receives the following annual retainer: Audit Committee: $10,000; Compensation Committee: $7,500; Nominating and Corporate Governance Committee: $6,000. The committee chairperson retainer is in addition to the board retainer. Each director has the opportunity to elect to receive 100% of the retainer in restricted stock with a minimum of $30,000 of the retainer in restricted stock. The amount of the retainer elected to be paid in restricted stock vests quarterly over a one year period. The number of restricted shares is determined by the average of the high and low sale price of the Company's stock on the day prior to the Annual Meeting of Shareholders. In 2025, the Company issued an aggregate of 13,498 shares of restricted stock to non-employee directors in lieu of $0.2 million of their annual cash retainer fees. The weighted average period over which the non-employee director award compensation expense is expected to be recognized is 0.48 years.
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