Invacare 2015 Annual Report Download - page 101

INVACARE CORPORATION AND SUBSIDIAIRIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
FS-29
Performance Shares and Performance Share Units
The following table summarizes information about performance shares and performance share units (for non-U.S. recipients):
2015
Weighted
Average
Fair
Value 2014
Weighted
Average
Fair
Value
Shares / Units unvested at January 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,644 $ 20.05 — $ —
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114,257 18.95 152,800 20.05
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
Canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37,500) 19.62 (31,156) 20.05
Shares / Units unvested at December 31. . . . . . . . . . . . . . . . . . . . . . . . . . 198,401 $ 19.50 121,644 $ 20.05
During 2015 and 2014, the performance shares and performance share units (for non-U.S. recipients) were granted as
performance awards with a 3 year performance period with payouts based on achievement of certain performance goals. The
awards are classified as equity awards as they will be settled in common shares upon vesting. The number of shares earned will
be determined at the end of the performance period based on achievement of performance criteria for January 1, 2016 through
December 31, 2016 established by the Compensation Committee at the time of grant. Recipients will be entitled to receive a number
of common shares equal to the number of performance shares that vest based upon the levels of achievement which may range
between 0% and 150% of the target number of shares with the target being 100% of the initial grant.
The fair value of the performance awards is based on the stock price on the date of grant discounted for the estimated value
of dividends foregone as the awards are not eligible for dividends except to the extent vested. The company assesses the probability
that the performance targets will be met with expense recognized whenever it is probable that at least the minimum performance
criteria will be achieved. Depending upon the company's assessment of the probability of achievement of the goals, the company
may not recognize any expense associated with performance awards in a given period, may reverse prior expense recorded or
record additional expense to make up for expense not recorded in a prior period. Performance award compensation expense is
generally expected to be recognized over 3 years. However, for the years ended December 31, 2015 and December 31, 2014, the
company concluded that it was not probable that the performance goals, as defined in the agreements, would be achieved and thus
no performance award expense was recognized in 2015 or 2014.
Rights Agreement
Effective July 8, 2005, the company adopted a Rights Agreement to replace the company’s previous shareholder rights plan,
which expired on July 7, 2005. In order to implement the new Rights Agreement, the Board of Directors declared a dividend of
one Right for each outstanding share of the company’s Common Shares and Class B Common Shares to shareholders of record
at the close of business on July 19, 2005. Each Right entitled the registered holder to purchase from the company one one-thousandth
of a Series A Participating Serial Preferred Share, without par value, at a Purchase Price of $180.00 in cash, subject to adjustment.
The Rights were not exercisable until after a person (an “Acquiring ”) has acquired, or obtained the right to acquire, or commences
a tender offer to acquire, shares representing 30% or more of the company’s outstanding voting power, subject to deferral by the
Board of Directors. If the Rights became exercisable, under certain circumstances, the Rights may have been exercisable to purchase
Common Shares of the company, or common shares of an acquiring company, at a price equal to the exercise price of the Right
divided by 50% of the then current market price per Common Share or acquiring company common share, as the case may be.
The Rights expired on July 18, 2015 and were not redeemed or exchanged by the company. The company could have redeemed
and terminated the Rights in whole, but not in part, at a price of $0.001 per Right at any time prior to 10 days following a public
announcement that an Acquiring Party has acquired beneficial ownership of shares representing 30% or more of the company’s
outstanding voting power, and in certain other circumstances described in the Rights Agreement. The company's Board of Directors
did not renew the Rights Agreement which expired on July 18, 2015.