Annual report pursuant to Section 13 and 15(d)

Employee Benefit Plans

v2.4.1.9
Employee Benefit Plans
12 Months Ended
Dec. 31, 2014
Employee Benefit Plans [Abstract]  
Employee Benefit Plans

Note 8 – 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 9. 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 $1,017,  $923 and $918 in the years 2014,  2013 and 2012, 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 2,300,000 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 841,000 shares into the plan, increasing the quantity authorized and reserved for issuance under the 2011 Plan to 3,141,000 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, 2014, the 2011 Plan had 1,132,000 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 vest immediately 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-Settled RSU Awards

 

Certain of the Company’s RSUs awarded require cash settlement. Cash-settled RSU awards are accounted for as liabilities as the Company is contractually obligated to settle these awards in cash. The fair value of the Company’s market-based RSU awards 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-settled RSU awards include a market-based vesting condition that determines the actual number of units that will ultimately vest. The number of RSUs that 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, 2014, the Company had the following cash-settleable RSU awards outstanding (including those that are not based on a market condition):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(shares in 000s)

 

Base Units Outstanding

 

Potential Minimum Units Vesting

 

Potential Maximum Units Vesting

Vesting in 2015

 

837 

 

52 

 

1,622 

Vesting in 2016

 

416 

 

60 

 

772 

Vesting in 2017

 

24 

 

24 

 

24 

Other

 

137 

 

137 

 

137 

Total cash-settleable RSU awards

 

1,414 

 

273 

 

2,555 

 

For the year ended December 31, 2014,  523,000 market-based cash-settled RSUs subject to the peer market-based vesting described above vested at between 150% - 200%, depending on the date of vesting, resulting in cash payments of $1,241 in 2014 and payable amounts of $3,599 in 2015. Also during 2014,  58,000 non-market-based cash settled RSUs vested, resulting in cash payments of $559 in 2014. During 2013,  260,000 market-based cash-settled RSUs subject to the peer market-based vesting described above vested at 100% of their issued units, resulting in cash payments of $1,669 in 2014. Also during 2013,  65,000 non-market-based cash settled RSUs vested, resulting in cash payments of $239 in 2013. See Note 9 for additional information regarding cash-settleable RSUs.