Stock-based Compensation

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

The Company's stock based compensation is in accordance with the Company's amended 2015 Incentive Compensation Plan (the “Plan”), pursuant to which the Compensation Committee of the Company is authorized to grant up to 7.2 million shares to officers and employees of the Company, in the form of equity-based awards, including time or performance based options and restricted stock. In addition, the Company may grant cash-settled awards, including stock-appreciation rights (SARs) and phantom stock awards.

In June 2019, the Company's shareholders approved the 2019 Employee Stock Purchase Plan (the "ESPP"), which was effective July 1, 2019. 500,000 shares of common stock are reserved for issuance under the ESPP. The ESPP allows eligible employees to purchase shares of common stock at a discount of up to 15% through payroll deductions of their eligible compensation, subject to any plan limitations. The ESPP provides for six-month offering periods beginning January 1 and July 1 of each year, and each offering period consists of a six-month purchase period. On each purchase date, eligible employees may purchase the Company's common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the common stock on the offering date or (2) the fair market value of the common stock on the purchase date. As of June 30, 2021, 406,476 shares had been issued under the ESPP.

Stock compensation expense for equity-classified and liability-classified awards was $0.3 million and $1.0 million for the three months ended June 30, 2021 and 2020, respectively. Stock compensation expense for equity-classified and liability-classified awards was $1.2 million and $1.8 million for the six months ended June 30, 2021 and 2020, respectively. Stock compensation expense is recognized in cost of goods sold, selling, general and administrative expenses and research and development expenses. At June 30, 2021, there was $7.3 million of unrecognized compensation cost relating to outstanding unvested equity instruments expected to be recognized over the weighted average period of 2.4 years.

During the three months ended June 30, 2021, the Company granted the following share-based awards to members of management and employees. These awards will be settled in shares of the Company's common stock and are equity-classified. The grant date fair value of the time-based award will be recognized on a straight-line basis over the vesting period. The grant date fair value of the performance-based award will be recognized on a straight-line basis over the vesting period based on the probability of achieving the performance condition. The performance-based restricted stock units each have a performance period that ends on December 31, 2023.


(in thousands)			Number of shares
Time-based restricted stock units			1,308
Performance-based restricted stock units			808
Stock options			545
Total			2,661

The stock options were valued with a Black-Scholes option pricing model using the assumptions in the table below. The expected life was estimated using the simplified method. Based on these assumptions, the grant-date fair value of the stock options was estimated to be $1.38.

During the three months ended June 30, 2021, the Company also granted the following share-based awards to members of management employed in certain countries outside of the United States. These awards will be settled in cash and are liability-classified. Therefore, the fair value of these liability-classified awards will be re-measured on each balance sheet date. The performance-based phantom shares each have a performance period that ends on December 31, 2023.


(in thousands)			Number of shares
Time-based phantom shares			35
Performance-based phantom shares			13
Total			48