Stock-Based Compensation

3 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

ADS has several programs for stock-based payments to employees and non-employee members of its Board of Directors, including stock options, performance-based restricted stock units and restricted stock. Equity-classified restricted stock awards are measured based on the grant-date estimated fair value of each award. The Company accounts for all restricted stock granted to Directors as equity-classified awards. The Company recognized stock-based compensation expense in the following line items of the Condensed Consolidated Statements of Operations for the periods presented:

	Three Months Ended June 30,
	2022		2021
	(In thousands)
Component of income before income taxes:
Cost of goods sold	$	674	$	634
Selling, general and administrative expenses	5,599		6,017
Total stock-based compensation expense	$	6,273	$	6,651

The following table summarizes stock-based compensation expense by award type for the periods presented:

	Three Months Ended June 30,
	2022		2021
	(In thousands)
Stock-based compensation expense:
Stock Options	$	1,279	$	753
Restricted Stock	1,761		1,359
Performance-based Restricted Stock Units	2,740		4,188
Non-Employee Directors	493		351
Total stock-based compensation expense	$	6,273	$	6,651

2017 Omnibus Incentive Plan

On May 24, 2017, the Board of Directors approved the 2017 Omnibus Incentive Plan (the “2017 Incentive Plan”) which was approved by the Company’s stockholders on July 17, 2017. The 2017 Incentive Plan provides for the issuance of a maximum of 5.0 million shares of the Company’s common stock for awards made thereunder, which awards may consist of stock options, restricted stock, restricted stock units, stock appreciation rights, phantom stock, cash-based awards, performance awards (which may take the form of performance cash, performance units or performance shares) or other stock-based awards.

Restricted Stock – During the three months ended June 30, 2022, the Company granted 0.1 million shares of restricted stock with a grant date fair value of $8.5 million.

Performance-based Restricted Stock Units ("Performance Units") – During the three months ended June 30, 2022, the Company granted 0.1 million performance share units at a grant date fair value of $6.6 million.

Options – During the three months ended June 30, 2022, The Company granted 0.1 million nonqualified stock options under the 2017 Incentive Plan with a grant date fair value of $5.5 million. The Company estimates the fair value of stock options using a Black-Scholes option-pricing model. The following table summarizes the assumptions used to estimate the fair value of stock-options during the periods presented:

	Three Months Ended June 30, 2022
Common stock price	$99.29
Expected stock price volatility	41.1%
Risk-free interest rate	2.9%
Weighted-average expected option life (years)	6
Dividend yield	0.48%