Print Page      Close Window     

SEC Filings

10-Q
NEXEO SOLUTIONS, INC. filed this Form 10-Q on 05/10/2018
Entire Document
 

In November 2017, the Company granted 415,867 shares of restricted stock to employees under the 2016 LTIP. The restricted stock awards vest equally on the anniversary of the grant date over a three-year period provided that the recipients of such grants continue their employment with the Company. The awards are accounted for as equity instruments, and the fair value of the restricted stock awards was determined by the closing price of the Company's common stock on the date of grant. During the fiscal years ended September 30, 2017 and 2016, the Company granted restricted stock awards to certain of the Company’s non-employee directors under the 2016 LTIP that vest one year from the date of grant.

The following table summarizes all restricted stock activity during the six months ended March 31, 2018:
 
Shares of Restricted Stock
 
Average Grant
Date Fair Value
Per Unit
Restricted stock at September 30, 2017
77,458

 
$
8.26

Granted
415,867

 
7.50

Vested

 

Forfeited/Canceled
(24,008
)
 
8.20

Restricted stock at March 31, 2018
469,317

 
$
7.59


The restricted stock awards are accounted for as equity instruments, and the Company recognized compensation expense of $0.4 million and $0.7 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations during the three and six months ended March 31, 2018, respectively, and $0.1 million and $0.3 million during the three and six months ended March 31, 2017, respectively, related to the restricted stock. As of March 31, 2018, there was $2.7 million of total unrecognized compensation expense related to restricted stock, and a weighted average remaining life of 2.3 years.

During the fiscal year ended September 30, 2016, the TPG Restricted Stock Grants were awarded with respect to 100,000 shares of Company common stock owned by TPG. These awards vest in equal amounts over a three-year period provided that the recipients of such grants continue their employment with the Company. During the six months ended March 31, 2018, 11,673 shares were transferred back to TPG due to forfeiture. During the fiscal year ended September 30, 2017, 33,333 shares of these awards vested and 9,576 shares were transferred to the Company (reflected as treasury stock) to satisfy the officers’ and employees’ tax withholding obligations in connection with the vesting. The Company recognized compensation cost of less than $0.1 million and $0.1 million as a component of Selling, general and administrative expenses on the condensed consolidated statements of operations for the three and six months ended March 31, 2018, respectively, and $0.1 million and $0.2 million for the three and six months ended March 31, 2017, respectively, related to these awards. As of March 31, 2018, there was $0.4 million of total unrecognized compensation cost related to these awards and a weighted average remaining life of 1.2 years. While these awards were not made pursuant to the 2016 LTIP, they constitute equity-based compensation and therefore will count against the 2016 LTIP's share reserve to the extent the awards vest.

During the six months ended March 31, 2018, the Company granted 999,492 stock options to employees under the 2016 LTIP. The awards vest in equal amounts over a three-year period provided that the recipients of such grants continue their employment with the Company. The Company used the Black-Scholes Merton model to estimate the fair value of the option awards at the grant date. The resulting grant date fair value is recognized as expense on a straight-line basis over the vesting period. The assumptions used in the Black-Scholes Merton model for the options included an expected term of six years, an expected stock price volatility of 35.0% based on a peer group of similar companies, an expected dividend yield of 0.0% and a risk-free interest rate of 2.1%.


28