Share-based Compensation

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation (stock option and share unit amounts below are in thousands)

The Company accounts for its share-based compensation arrangements by recognizing compensation expense for the fair value of the share awards granted ratably over their vesting period. All compensation expense related to share-based compensation arrangements is recorded in sales, general and administrative expense and warehouse, processing and delivery expense. The total share-based compensation expense recognized in the three and nine months ended September 30, 2015 was $428 and $424, respectively, and $133 and $1,160 for the three and nine months ended September 30, 2014, respectively. The unrecognized compensation cost as of September 30, 2015 associated with all share-based payment arrangements is $2,650 and the weighted average period over which it is to be expensed is 1.5 years.

2015 Short-Term Incentive Plan

On July 24, 2015, the Board of Directors of the Company approved certain revisions to the Company's 2015 Short-Term Incentive Plan ("2015 STI Plan"). Along with providing cash bonus opportunities, the revisions awarded 124 stock options to executive officers and other select personnel. The stock options vest in three equal installments over three years from the grant date and are exercisable immediately upon vesting. The strike price was equal to the closing price of the Company's stock on the date of grant. The term of the options is 10 years from the date of grant.

The weighted average grant date fair value of $2.10 per share for the options granted under the 2015 STI Plan was estimated using the Black-Scholes option-pricing model with the following assumptions:



	2015
Expected volatility	56.1	%
Risk-free interest rate	1.8	%
Expected life (in years)	6.0
Expected dividend yield	—

2015 Long-Term Compensation Plan

On July 24, 2015, the Board of Directors of the Company approved equity awards under the Company’s 2015 Long-Term Compensation Plan (“2015 LTC Plan”) for executive officers and other select personnel. The 2015 LTC Plan awards included restricted stock units (“RSUs”) and non-qualified stock options ("stock options"). All 2015 LTC Plan awards are subject to the terms of the Company’s 2008 A.M. Castle & Co. Omnibus Incentive Plan, amended and restated as of April 25, 2013.

The 2015 LTC Plan consists of two components of share-based payment awards as follows:

Restricted Share Units - The Company granted 188 RSUs with a weighted-average grant date fair value of $3.92 per share unit to executive officers and other select personnel. The grant date fair value was established using the market price of the Company’s stock on the date of grant. The RSUs cliff vest on December 31, 2017. Each RSU that becomes vested entitles the participant to receive one share of the Company’s common stock. The number of shares delivered may be reduced by the number of shares required to be withheld for federal and state withholding tax requirements (determined at the market price of Company shares at the time of payout).

Stock Options - The Company granted 583 stock options which vest in three equal installments during 2016, 2017 and 2018. The first installment will be exercisable 12 months after the date of grant and the remaining installments will be exercisable on February 25, 2017 and February 25, 2018, except for awards granted to the Company's President and Chief Executive Officer which become exercisable on April 17, 2017 and April 18, 2018. The strike price was equal to the closing price of the Company's stock on the date of grant. The term of the options is 10 years from the date of grant.

The weighted average grant date fair value of $2.05 per share for the options granted under the 2015 LTC Plan was estimated using the Black-Scholes option-pricing model with the following assumptions:



	2015
Expected volatility	55.7	%
Risk-free interest rate	1.8	%
Expected life (in years)	5.8
Expected dividend yield	—