XML 44 R24.htm IDEA: XBRL DOCUMENT v3.20.4
Stock Option And Stock Award Plans
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Stock Option And Stock Award Plans STOCK OPTION AND STOCK AWARD PLANS
As of December 31, 2020, the Company had one stock-based compensation plan that permits the grants of stock options, stock appreciation rights (“SARs”), stock, restricted stock, and stock unit awards. Stock options may be granted to purchase a specified number of shares of common stock at a price no lower than the fair market value on the date of grant and for a term not to exceed 10 years. Stock options granted by the Company in 2020, 2019, and 2018 vest after 2 years and have a 7-year life or vest after 3 years and have a 5-year life. Stock options exercisable totaled 1,287,792 and 360,218 shares at December 31, 2020 and 2019, respectively. Stock options available for grant totaled 484,835 shares at December 31, 2020.
On December 1, 2020, Tredegar’s Board of Directors declared a special cash dividend of $200 million, or $5.97 per share, on the Company’s common stock (the “Special Dividend”). The Special Dividend was payable on December 18, 2020 and had an ex-dividend date of December 21, 2020. All stock option awards that were outstanding at the time of the Special Dividend were modified pursuant to the nondiscretionary anti-dilution provisions in the related stock-based compensation plan. SARs that were outstanding at the time of the Special Dividend were also modified pursuant to the nondiscretionary anti-dilution provisions in the related SARs grant agreements. The modifications included increasing the number of outstanding stock options and SARs as well as reducing the exercise prices of all outstanding stock options and SARS. The modification did not result in additional stock-based compensation expense. No other terms or conditions of outstanding awards were modified.
A summary of stock options outstanding at December 31, 2020, 2019 and 2018, and changes during those years, is presented below:
  Option Exercise Price/Share
  Number of
Options		RangeWeighted
Average
Outstanding at December 31, 2017608,520 $15.65 to$24.84 $19.75 
Granted451,083 19.35 to19.35 19.35 
Forfeited and expired(96,089)15.65 to24.84 19.58 
Exercised(73,398)15.65 to22.49 18.15 
Outstanding at December 31, 2018890,116 15.65 to24.84 19.69 
Granted758,287 18.48 to18.48 18.48 
Forfeited and expired(10,000)19.40 to19.40 19.40 
Exercised(9,500)19.40 to19.40 19.40 
Outstanding at December 31, 20191,628,903 15.65 to24.84 19.13 
Granted1
638,074 10.75 to14.62 11.90 
Modification for special cash dividend1
701,535 10.75 to14.62 11.90 
Forfeited and expired1
(141,074)10.75 to24.84 11.87 
Exercised— — to— — 
Outstanding at December 31, 20201
2,827,438 $10.75 to$22.49 $13.55 
1.The option exercise price per share reflects the reduction to the exercise prices of outstanding stock options impacted by the modification due to the anti-dilution provisions in the stock-based compensation plan.
The assumptions used in the Black-Scholes options-pricing model for valuing Tredegar stock options originally granted in 2020, 2019 and 2018, and the related estimated fair values at the date of grant, were as follows:
202020192018
Dividend yield2.5 %2.4 %2.3 %
Weighted average volatility percentage43.8 %38.3 %38.3 %
Weighted average risk-free interest rate0.8 %2.4 %2.8 %
Holding period (years)555
Weighted average exercise price at date of grant (also weighted average market price at date of grant)1
$14.41 $18.48 $19.35 
Estimated weighted average fair value of options per share at date of grant
$4.44 $5.43 $5.87 
Total estimated fair value of stock options granted (in thousands)$2,833 $4,117 $2,648 
1.In December 2020, the weighted average exercise price for outstanding stock option awards granted in 2020, 2019 and 2018 were modified to $10.75, $13.78 and $14.43, respectively. As the anti-dilution provisions in the stock-based compensation plan were structured to equitably adjust the award’s fair value before and after the modification, there is no resulting incremental fair value.
The dividend yield is the actual dividend yield on Tredegar’s common stock at the date of grant, which the Company believes is a reasonable estimate of the expected yield during the holding period. The expected volatility is based on the historical volatility of Tredegar’s common stock using a sequential period of historical data equal to the expected holding period of the option. The Company has no reason to believe that future volatility for this period is likely to differ from the past. The assumed risk-free interest rate is based on observed interest rates for U.S. Treasury debt securities appropriate for the expected holding period.
The following table summarizes additional information about stock options outstanding and exercisable at December 31, 2020:
 Options Outstanding at December 31, 2020Options Exercisable at December 31, 2020
  Weighted AverageAggregate Intrinsic Value  Aggregate Intrinsic Value
Range of
Exercise Prices		SharesRemaining Contractual LifeExercise
Price		SharesWeighted Average Exercise Price
$— to$13.99 1,598,700 5.4 years$12.11 $7,338,799 425,219 $12.50 $1,785,553 
13.99 to18.65 1,059,138 4.4 years14.64 2,209,408 692,973 14.66 1,447,785 
18.65 to23.32 169,600 2.1 years20.27 — 169,600 20.27 — 
Total2,827,438 4.9 years$13.55 $9,548,207 1,287,792 $14.68 $3,233,338 
Restricted stock grants ordinarily vest three years from the date of grant based upon continued employment. The fair value of restricted stock awards is estimated as of the grant date using the closing stock price on that date. Stock unit awards vest upon the achievement of certain performance targets. The following table summarizes additional information about unvested restricted stock outstanding at December 31, 2020, 2019 and 2018:
 Unvested Restricted StockMaximum Unvested Restricted Stock Units Issuable Upon Satisfaction of Certain Performance Criteria
 Number
of Shares		Weighted Avg. Grant Date Fair Value/ShareGrant Date
Fair Value
(In thousands)		Number
of Shares		Weighted Avg. Grant Date Fair Value/ShareGrant Date
Fair Value
(In thousands)
Outstanding at January 1, 2018206,676 $16.15 $3,337 172,133 $15.78 $2,716 
Granted119,915 17.39 2,085 61,227 17.35 1,062 
Vested(64,702)18.31 (1,185)— — — 
Forfeited(17,153)15.84 (272)(48,651)13.23 (644)
Outstanding at December 31, 2018244,736 16.20 3,965 184,709 16.97 3,134 
Granted185,422 18.46 3,423 57,442 18.34 1,053 
Vested(117,834)14.76 (1,739)(69,926)10.96 (766)
Forfeited(26,389)16.11 (425)(24,562)11.51 (283)
Outstanding at December 31, 2019285,935 18.27 5,224 147,663 21.25 3,138 
Granted155,138 14.55 2,257 34,275 15.25 523 
Vested(148,709)17.39 (2,586)(37,370)17.38 (649)
Forfeited(57,385)17.00 (976)(32,066)17.36 (557)
Outstanding at December 31, 2020234,979 $16.68 $3,919 112,502 $21.82 $2,455 
The total intrinsic value of stock options exercised was $0.1 million and $0.4 million in 2019 and 2018, respectively. There were no stock options exercised in 2020. The grant-date fair value of stock option-based awards vested was $3.0 million, $0.5 million, and $0.1 million in 2020, 2019, and 2018, respectively. As of December 31, 2020, there was unrecognized compensation cost for continuing operations of $2.0 million related to stock option-based awards and $1.7 million related to non-vested restricted stock and other stock-based awards. This cost is expected to be recognized over the remaining weighted average period of 1.2 years for stock option-based awards and 1.4 years for non-vested restricted stock and other stock-based awards. Commencing in 2019, stock option award grants include a retirement provision that allow for the immediate vesting of options held by a participant that ceases to provide service, including service as a member of the board of directors, with the Company, subsequent to reaching the age of 65.  As a result of this provision, the Company recognized accelerated stock compensation expense for continuing operations of $0.1 million and $1.3 million in 2020 and 2019, respectively. 
SARs granted in 2020 have the same terms and vesting requirements as the 2020 stock option grants except SARs may be settled in cash upon exercise and therefore are classified as liabilities and included in accrued expenses in the consolidated balance sheet. The fair value of these liability awards is remeasured at each reporting period until the date of settlement. Increases and decreases in stock-based compensation expense is recognized over the vesting period, or immediately, for vested awards.
The following table summarizes SARs activity in 2020 as no SARs were granted prior to January 1, 2020 since 1992:
  Exercise Price/Share
  Number of
SARs		RangeWeighted
Average
Outstanding at January 1, 2020— $— to$— $— 
Granted1
387,252 10.75 to19.64 11.60 
Modification for special cash dividend71,402 10.75 to19.64 11.60 
Forfeited and expired(82,214)10.75 to19.64 11.39 
Exercised— — to— — 
Outstanding at December 31, 2020376,440 $10.75 to$19.64 $11.64 
1.The SARs exercise price per share reflects the reduction to the exercise prices of outstanding SARs as a results of the modification to the awards pursuant to the nondiscretionary anti-dilution provisions in the related SARs grant agreements.
The grant-date fair value of SARs awards vested in 2020 was $0.6 million. As of December 31, 2020, the SARs unrecognized compensation cost for continuing operations was $1.5 million. This cost is expected to be recognized over the remaining weighted average vesting period of 1.1 years.