Annual report pursuant to Section 13 and 15(d)

Employee Benefit Plans

v2.4.0.6
Employee Benefit Plans
12 Months Ended
Dec. 31, 2012
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 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 $918, $811 and $690 in the years 2012, 2011 and 2010, 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, 2012, the 2011 Plan had 1,669 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.

Stock Incentive Award for Inducement of Employment

In April 2012 and as an inducement of employment, the Company awarded 100 restricted stock units to its Senior Vice President of Finance. The restricted stock units vest in one-third increments on each award anniversary date beginning July 1, 2013, and are being expensed ratably over the vesting period.

Following the Chief Operating Officer's ("COO") September 2010 departure from the Company, the COO forfeited his previously awarded 200 restricted and performance-based shares and 333 of his unvested performance-based stock options.  Prior to his departure in 2010, the Company achieved the first of three performance metrics specified in the performance-based stock options agreement resulting in the COO vesting in 167 options, for which the Company recorded approximately $180 of compensation expense.

In April 2010 and as an inducement of employment, the Company awarded 50 restricted stock units to its Senior Vice President of Operations.  The restricted stock units cliff vested on January 1, 2011, and were fully expensed as of December 31, 2010.

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. Changes in the fair value of cash-settleable awards are recorded as adjustments to compensation expense. See Note 7 for additional information regarding fair value of cash-settleable awards.

A 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, 2012, the Company had the following cash-settleable RSU awards outstanding:
 
 
Base Units
 
Potential Minimum
 
Potential Maximum
 
 
Outstanding at
 
Units at Vesting at
 
Units at Vesting at
 
 
December 31, 2012
 
December 31, 2012
 
December 31, 2012
Vesting in 2013
 
348

 
79

 
483

Vesting in 2014
 
569

 
62

 
1,077

Vesting in 2015
 
72

 
72

 
72

Other
 

 

 

Total cash-settleable RSU awards
 
989

 
213

 
1,632



For the year ended December 31, 2012, 364 cash-settleable RSUs subject to the peer market-based vesting described above vested at their maximum potential unit vesting of 546 units, resulting in a cash payment of $2,626. Additionally, 144 cash-settleable RSUs vested during 2012, resulting in a cash payment of $757. See Note 9 for additional information regarding cash-settleable RSUs.