Share-based Compensation

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

The A.M. Castle & Co. 2017 Management Incentive Plan (the “MIP”) became effective on August 31, 2017. Under the MIP, the Board of Directors, or a committee thereof, may grant to eligible officers, directors and employees of the Company Second Lien Notes, stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares and other forms of cash or share-based awards.

The Board of Directors has issued restricted shares of the Company's common stock ("Restricted Shares") to certain officers of the Company and certain members of the Company's Board of Directors, as well as an aggregate original principal amount of $2,400 of Second Lien Notes (the "Restricted Notes") convertible into an additional 638 shares of the Company's common stock.

The Restricted Shares and Restricted Notes issued to certain officers of the Company cliff vest three years from the date of grant, September 1, 2017, subject to the conditions set forth in the MIP. The Restricted Shares issued to certain members of the Company's Board of Directors cliff vested one year from the date of grant, April 25, 2018, subject to the conditions set forth in the MIP.

A summary of the activity of the Company's Restricted Shares as of September 30, 2019 and in the nine months then ended follows:



	Shares	Weighted-Average Grant Date Fair Value
Outstanding at January 1, 2019	1,803	3.19
Granted	15	1.77
Forfeited	(168)	3.14
Vested	(222)	3.52
Outstanding at September 30, 2019	1,428	3.13
Expected to vest after September 30, 2019	1,428	3.13

On September 10, 2018, the Board of Directors granted 664 performance share units as awards under the MIP ("PSUs") to non-executive senior level managers and other select personnel, and has granted additional PSUs since that date. The PSUs contain a performance-based condition tied to the enterprise value of the Company. Each PSU that vests will entitle the participant to receive one share of the Company's common stock. Vesting occurs upon achievement of a defined enterprise value of the Company, with 50% vesting upon achievement of the defined enterprise value between the performance period September 30, 2020 and September 30, 2022 and the remaining 50% vesting upon the achievement of the defined enterprise value as a result of a specified transaction, as defined in the PSU agreement, on or before September 30, 2022. At the discretion of the Company's Board of Directors, payment can be made in stock, cash, or a combination of both.

Compensation expense recognized related to the PSUs is based on management’s expectation of future performance compared to the pre-established performance goals. If the performance goals are not expected to be met, no compensation expense is recognized and any previously recognized compensation expense is reversed. As of September 30, 2019, there are 791 PSUs outstanding and no compensation expense was recognized for these awards to date as the threshold for expense recognition for the performance-based condition had not been met.

As of September 30, 2019, the unrecognized share-based compensation expense related to unvested Restricted Shares was $1,381 and is expected to be recognized over a weighted-average period of approximately 0.9 years. Forfeitures are accounted for as they occur.

As of September 30, 2019, the unrecognized share-based compensation expense related to the outstanding Restricted Notes was $567 and is expected to be recognized over a weighted-average period of approximately 0.9 years. The Company will recognize this compensation expense on a straight-line basis over the remaining three-year vesting period using the fair value of the Restricted Notes at the issue date.