Annual report pursuant to Section 13 and 15(d)

Employee Benefit Plans

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Employee Benefit Plans
12 Months Ended
Dec. 31, 2013
Compensation and Retirement Disclosure [Abstract]  
Employee Benefit Plans
Employee Benefit Plans

The Company utilizes various forms of incentive compensation designed to align the interest of the executives and employees with those of its stockholders. Tabular disclosures related to the share-based awards are presented in Note 8. The narrative that follows provides a brief description of each plan, summarizes the overall status of each plan and discusses current year awards under each plan:

Savings and Protection Plan

The Savings and Protection Plan (“401-K Plan”) provides employees with the option to defer receipt of a portion of their compensation, and the Company may, at its discretion, match a portion of the employee’s deferral with cash. The Company may also elect, at its discretion, to contribute a non-matching amount in cash and Company Common Stock to employees. The amounts held under the 401-K Plan are invested in various funds maintained by a third party in accordance with the directions of each employee. An employee is fully vested, including Company discretionary contributions, immediately upon participation in the 401-K Plan. The total amounts contributed by the Company, including the value of the common stock contributed, were $923, $918 and $811 in the years 2013, 2012 and 2011, respectively.
 
2011 Omnibus Incentive Plan (the “2011 Plan”)

The 2011 Plan, which became effective May 12, 2011 following shareholder approval, authorized and reserved for issuance 2,300 shares of common stock, which may be issued upon exercise of vested stock options and/or the vesting of any other share-based equity award that is granted under this plan. The 2011 Plan is the Company’s only active plan, and included a provision at inception whereby all remaining, un-issued and authorized shares from the Company’s previous share-based incentive plans became issuable under the 2011 Plan. This transfer provision resulted in the transfer of an additional 841 shares into the plan, increasing the quantity authorized and reserved for issuance under the Plan to 3,141 at the inception of the plan. Another provision provided that shares which would otherwise become available for issue under the previous plans as a result of vesting and/or forfeiture of any equity awards existing as of May 12, 2012, would also increase the authorized shares available to the 2011 Plan. As of December 31, 2013, the 2011 Plan had 1,192 shares remaining and eligible for future issuance.

Equity awards issued under this plan may be subject to various vesting, accelerated vesting, and forfeiture provisions upon the occurrence of certain events. Any vested but unexercised options contractually expire 10 years from the date of grant. Equity awards under the 2011 Plan generally vest over time but may also be subject to attaining a specified performance metrics and may be immediate or cliff vest at a specified date. The Company will recognize expense on the grant date for all immediately vesting awards, while it will recognize expense ratably over the requisite service (i.e. vesting) period for both cliff and ratably vesting awards. For performance-based awards, the Company recognizes expense based on its analysis of the performance criteria, and records or reverses expense as necessary based on its analysis. For market-based awards, the Company recognizes expense based on its analysis of the market criteria, and records expense as necessary based on its analysis. Awards with a market-based provision do not allow for the reversal of previously recognized expense, even if the market metric is not achieved and no shares ultimately vest or are awarded.

Cash-Settleable RSU Awards

Certain of the Company’s RSUs awarded require cash-settlement. Cash-settleable RSU awards are accounted for as liabilities as the Company is contractually obligated to settle these awards in cash, and are recorded in the Company’s consolidated balance sheet for the ratable portion of their fair values. The fair value of the Company’s market-based RSU is calculated using a Monte Carlo valuation model, which considers such inputs as the Company’s and its peer group’s stock prices, a risk-free interest rate, and an estimated volatility for the Company and its peer group. Changes in the fair value of cash-settleable awards are recorded as adjustments to compensation expense.

Market-based RSUs: A significant portion of the Company’s cash-settleable RSU awards include a market-based vesting condition and may ultimately vest at a quantity different than the base RSUs awarded. The number of RSUs that cliff-vest is based on a calculation that compares the Company’s total shareholder return to the same calculated return of a group of peer companies as selected by the Company, and the number of units that will vest can range between 0% and 200% of the base units awarded.

As of December 31, 2013, the Company had the following cash-settleable RSU awards outstanding (including those that are not based on a market condition):
 
 
Base Units
 
Potential Minimum
 
Potential Maximum
 
 
Outstanding at
 
Units at Vesting at
 
Units at Vesting at
Vesting in 2014
 
510

 
45

 
975

Vesting in 2015
 
909

 
60

 
1,758

Vesting in 2016
 
66

 
66

 
66

Other
 
92

 
92

 
92

Total cash-settleable RSU awards
 
1,577

 
263

 
2,891



For the year ended December 31, 2013, 260 market-based cash-settleable RSUs subject to the peer market-based vesting described above vested at 100% of their issued units, resulting in a cash payment of $1,669. Also during 2013, 65 non-market-based cash settleable RSUs vested, resulting in a cash payment of $239. During 2012, 364 market-based cash-settleable RSUs vested at 150%, resulting in a cash payment of $2,626. Also during 2012, 143 non-market-based cash settleable RSUs vested, resulting in a cash payment of $763. See Note 8 for additional information regarding cash-settleable RSUs.