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10-K
ICONIX BRAND GROUP, INC. filed this Form 10-K on 03/28/2019
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The Company has awarded performance-based restricted shares of common stock to certain employees. The awards have restriction periods tied to certain performance measures. The cost of the performance-based restricted stock awards, which is the fair market value on the date of grant net of estimated forfeitures, is expensed when the likelihood of those shares being earned is deemed probable.

Compensation expense related to restricted stock grants for FY 2018 and FY 2017 was approximately $1.8 million and $3.5 million, respectively.  An additional amount of $0.6 million of compensation expense related to restricted stock grants (inclusive of the restricted stock grants awarded as part of the long-term incentive plan discussed below) is expected to be expensed evenly over a period of approximately twelve months. During FY 2018 and FY 2017, the Company repurchased shares valued at $0.2 million and $1.2 million, respectively, of its common stock in connection with net share settlement of restricted stock grants and option exercises. 

Retention Stock

On January 7, 2016, the Company awarded to certain employees a retention stock grant of approximately 0.1 million shares with a then current value of approximately $7.5 million.  The awards cliff vested in three years on a scaled pay out based on the Company’s total shareholder return measured against a peer group.  The measurement period began on the grant date and the beginning measurement amount was calculated based on the 20 day average closing stock price leading up to the grant date.  The measurement period ended on December 31, 2018 and the ending measurement amount was based on the 20 day average closing stock price leading up to December 31, 2018.  

In accordance with ASC 718, the Company valued these shares utilizing a Monte Carlo simulation as the awards are based on market conditions.  

The grant date fair value of the awards issued on January 7, 2016 was $4.25 and was based on the following range of assumptions for the Company and the peer group (the grant date fair value and the stock price valuation assumptions in the table below have not been effected for the Reverse Stock Split):

 

 

 

January 7. 2016

 

Valuation Assumptions:

 

 

 

 

Beginning average stock price (20 trading days prior to

   January 7, 2016)

 

$4.85 - $63.41

 

Valuation date stock price (closing values on

   January 7, 2016)

 

$4.53 - $59.08

 

Risk free interest rate

 

 

1.21

%

Expected dividend yield used when simulating the total

   shareholder return

 

 

0.00

%

Expected dividend yield used when simulating the

   Company's stock price

 

 

0.00

%

Stock price volatility (based on historical stock price over

   the last 2.98 years)

 

21.09% - 72.17%

 

Correlation coefficients

 

0.04 - 0.47

 

 

As of December 31, 2018, pursuant to the terms of the awards and based upon the Company’s performance over the vesting period, no shares were issued upon expiration of the grant.

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