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Employee Benefit Plans
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12 Months Ended |
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Dec. 31, 2011
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| 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. 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 $811, $690 and $640 in the years 2011, 2010 and 2009, 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 currently the Company's only active plan, and included a provision whereby all remaining, un-issued and authorized shares from the Company's previous share-based incentive plans (detailed below) are now issuable under the 2011 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.
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.
The provisions discussed above related to the transfer of issuable shares in to the 2011 Plan resulted in the transfer of approximately 841 additional shares authorized for issuance under this Plan, increasing the total shares reserved for issuance to 3,141. During 2011, 735 shares were awarded to various officers and employees of the Company and 57 restricted stock units were issued to members of our Board of Directors. These awards will vest based on the passage of time. Consequently and as of December 31, 2011, the 2011 Plan had 2,349 shares remaining and eligible for future issuance.
The following plans were replaced by the 2011 Plan, though as discussed above, previously issued and unvested awards remain outstanding under the following plans:
1996 Stock Incentive Plan (the “1996 Plan”)
The 1996 Plan, first adopted by the Board of Directors on August 23, 1996 and approved by the shareholders during 1997 and as amended, authorized and reserved for issuance 2,200 shares of common stock for issuance upon exercise of vested stock options and vesting of other share-based equity awards. Unvested options under this plan are subject to various accelerated vesting and forfeiture provisions subject to the occurrence of certain events, and unexercised, vested options expire 10 years from the date of grant. Equity awards under the plan generally vest over time or subject to attaining a specified metric, but vesting of awards may be immediate or cliff vest at a specified date. The Company recognizes expense on the grant date for all immediately vesting awards, while it recognizes 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.
As discussed above and during 2011, all shares remaining and eligible for future issuance from the 1996 Plan as of the effective date of the 2011 Plan were transferred into the 2011 plan. Consequently, no awards were made from the 1996 plan during the current year. Other activity within the 1996 Plan during 2011 included the expiration of 25 vested, unexercised stock options. As of December 31, 2011, the 1996 Plan had no shares remaining and eligible for future issuance.
2002 Stock Incentive Plan (the “2002 Plan”)
The 2002 Plan, adopted by the Board of Directors on February 14, 2002, authorized and reserved for issuance 350 shares of common stock for issuance upon exercise of vested stock options and vesting of other share-based equity awards. The 2002 Plan is considered a “broadly-based plan” and did not require shareholder approval. Unvested options under this plan are subject to various accelerated vesting and forfeiture provisions subject to the occurrence of certain events, and unexercised, vested options expire 10 years from the date of grant. Equity awards under the plan generally vest over time or subject to attaining a specified metric, but vesting of awards may be immediate or cliff vest at a specified date. The Company recognizes expense on the grant date for all immediately vesting awards, while it recognizes 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.
As discussed above and during 2011, all shares remaining and eligible for future issuance from the 2002 Plan as of the effective date of the 2011 Plan were transfered into the 2011 plan. Consequently, no awards were made from the 2002 plan during the current year. Other activity within the 2002 Plan during 2011 included the forfeiture of 13 restricted stock units due to an employee departure from the Company. As of December 31, 2011, the 2002 Plan had no shares remaining and available for future issuance.
2006 Stock Incentive Plan (the “2006 Plan”)
The 2006 Plan, adopted by the Board of Directors on March 9, 2006 and approved by the shareholders at the May 4, 2006 annual meeting, authorized and reserved for issuance 500 shares of common stock for issuance upon exercise of vested stock options and vesting of other share-based equity awards. Unvested options under this plan are subject to various accelerated vesting and forfeiture provisions subject to the occurrence of certain events, and unexercised, vested options expire 10 years from the date of grant. Equity awards under the plan generally vest over time or subject to attaining a specified metric, but vesting of awards may be immediate or cliff vest at a specified date. The Company recognizes expense on the grant date for all immediately vesting awards, while it recognizes 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.
As discussed above and during 2011, all shares remaining and eligible for future issuance from the 2006 Plan as of the effective date of the 2011 Plan were transferred into the 2011 plan. Consequently, no awards were made from the 2006 plan during the current year. Other activity during 2011 included the forfeiture of 5 restricted stock units due to an employee departure from the Company and the vesting 48 restricted stock units awarded in prior years. As of December 31, 2011, the 2006 Plan had no shares remaining and available for future issuance.
2009 Stock Incentive Plan (the “2009 Plan”)
The 2009 Plan, adopted by the Board of Directors on March 5, 2009 and approved by shareholders on April 30, 2009, authorizes and reserves for issuance 1,250 shares of common stock for issuance upon exercise of vested stock options and vesting of other share-based equity awards. Unvested options under this plan are subject to various accelerated vesting and forfeiture provisions subject to the occurrence of certain events, and unexercised, vested options expire 10 years from the date of grant. Equity awards under the plan generally vest over time or subject to attaining a specified metric, but vesting of awards may be immediate or cliff vest at a specified date. The Company recognizes expense on the grant date for all immediately vesting awards, while it recognizes 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.
As discussed above and during 2011, all shares remaining and eligible for future issuance from the 2009 Plan as of the effective date of the 2011 Plan were transferred into the 2011 plan. However, prior to that effective date, 45 restricted stock units were awarded to an employee, which vest one-third on each successive anniversary date of the award. Other activity during 2011 included the forfeiture of 10 restricted stock units due to employee departures from the Company and the vesting of 5 restricted stock units awarded in prior years. As of December 31, 2011, the 2009 Plan had no shares remaining and available for future issuance.
Stock Incentive Award for Inducement of Employment
On June 1, 2009, as an inducement of employment, the Company awarded to its then Executive Vice President and Chief Operating Officer (“COO”) 200 restricted stock units of which one-half were to vest on June 1, 2012 based on achieving certain metrics and one-half was to vest on June 1, 2013 subject to the COO being employed by the Company on that date. The vesting of the portion of the award subject to achieving a specified metric was contingent upon the Company's relative ranking amongst a Company-selected peer group of other public oil and gas companies, and was subject to a 0% - 150% adjustment. The Company also awarded the COO 500 stock options with vesting determined by the Company's stock price achieving certain levels. These stock options were approved to cliff vest in one-third increments upon the stock price reaching specified levels. Following the COO's September 2010 departure from the Company, the COO forfeited all of his restricted and performance-based shares and 333 of the unvested performance-based stock options. Prior to his departure in 2010, the Company did achieve the first of three performance metrics specified in the performance-based stock options agreement resulting in the vesting of these 167 options, for which the Company recorded approximately $180 of compensation expense.
On April 1, 2010, as an inducement of employment, the Company awarded 50 restricted stock units to Gary A. Newberry, its new Senior Vice President of Operations. The restricted stock units cliff vested on January 1, 2011, and were fully expensed as of December 31, 2010.
Other Incentive Awards
During 2011, the Company awarded 308 restricted stock units that cliff vest in December, 2013, which will ultimately be settled in cash. The number of units that will ultimately vest will be 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 vest can range between 0% and 150% of the remaining restricted stock units. Because this award is payable in cash, the entire award is accounting for as a liability, and is recorded on the Company's consolidated balance sheet for the ratable portion of its fair value. Changes in fair value of the award are recorded as adjustments to compensation expense.
Also during 2011, the Company awarded 56 restricted stock units that cliff vest in May 2014 to officers and employees of the Company. In addition, 19 restricted stock units were awarded to a member of our Board of Directors which will vest upon this Director's termination of service to the Company. Upon vesting, these units will be paid in cash based on the closing stock price of the Company's common stock on the vesting date. These awards are accounted for as a liability, and are recorded on the Company's consolidated balance sheet for the ratable portion of its fair value. Changes in fair value of the award are recorded as adjustments to compensation expense.
During 2010, the Company awarded 400 restricted stock units that cliff vest in December, 2012, which will ultimately be settled in cash. During the year of issuance, 50 of these performance-based restricted stock units were forfeited following an employee departure from the Company. During 2011, an additional 10 restricted stock units were forfeited following an employee departure from the Company. The number of units that will ultimately vest will be based on a calculation that compares the Company's total shareholder return the same calculated return of a group of peer companies as selected by the Company, and the number of units that vest can range between 0% and 150% of the remaining 340 restricted stock units. Because this award is payable in cash, the entire award is accounting for as a liability, and is recorded on the Company's consolidated balance sheet for the ratable portion of its fair value. Changes in fair value of the award are recorded as adjustments to compensation expense.
Also during 2010, the Company awarded 94.5 restricted stock units that cliff vest in May 2012. Subsequent to the issuance, 15 of these restricted stock units were forfeited following an employee departure from the Company. Upon vesting, these units will be paid in cash based on the closing stock price of the Company's common stock on the vesting date. This award is accounted for as a liability award, and is recorded on the Company's consolidated balance sheet for the ratable portion of its fair value. Changes in fair value of the award are recorded as adjustments to compensation expense.
During 2009, the Company awarded 121.5 restricted stock units that cliff vest in August 2012 and allow for automatic early vesting upon a qualifying retirement. Vesting units under this award will be settled in cash based on the closing price of the Company's common stock on the date of vesting. This award is accounted for as a liability award, and is recorded on the Company's consolidated balance sheet at its fair value. Changes in fair value of the award are recorded as adjustments to compensation expense.
Tabular disclosures related to the share-based awards are presented below in Note 10.
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