Common Stock and Stockholders' Equity |
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| Common Stock and Stockholders' Equity |
Stock-Based Compensation
Stock Plan
In 2015 and 2014 stock-based compensation awards were granted to employees under the Company's 2010 Long-Term Incentive Plan, as amended and restated in May 2013 (the Stock Plan).
The Stock Plan was approved by the stockholders at the Annual Meeting of Stockholders on May 8, 2013. The Stock Plan authorizes the compensation committee or the board of directors to issue stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance based awards, and other types of awards in cash or stock to key employees, consultants, and directors.
The maximum number of shares that may be delivered pursuant to the awards granted under the Stock Plan is 11,000,000 shares of common stock. As of December 31, 2015 there were 1,311,131 shares remaining available under the Stock Plan.
Stock-Based Awards
Stock-based awards generally vest over three years. Stock-based compensation expense is recognized net of an estimated forfeiture rate, which is based on historical experience and adjusted, if necessary, in subsequent periods based on actual forfeitures. We recognize share-based compensation expense in the same financial statement line item as cash compensation paid to the respective employees. Tax deduction benefits for awards in excess of recognized compensation costs are reported as a financing cash flow.
We currently issue three types of stock-based awards: restricted stock units (RSUs), performance share units (PSUs) and phantom stock units:
The following table presents RSUs and PSUs granted, vested and forfeited during 2015 under the Company's Stock Plan:
In 2015, 2014, and 2013 we issued 2,996,151 units, 1,541,395 units, and 2,602,973 units, respectively, of RSUs to selected key personnel. On May 9, 2013 Chris Weber was elected Senior Vice President and Chief Financial Officer of the Company. As part of his employment agreement, he was granted 261,438 RSUs. This award was granted outside of the Company’s Stock Plan but is subject to substantially the same terms and conditions of other service-based RSUs granted by the Company to its executive officers.
Total stock-based compensation expense recognized relating to RSUs and PSUs for the years ended December 31, 2015, 2014, and 2013 was $8.4 million, $9.3 million, and $9.4 million, respectively, all of which was related to nonvested RSUs and PSUs. The total fair value of the units vested during the years ended December 31, 2015, 2014, and 2013 was $8.0 million, $7.1 million, and $7.4 million, respectively. The fair value of RSUs is determined based on the closing trading price of the Company’s stock on the grant date. The per-share weighted-average grant-date fair value of units granted during the years 2015, 2014, and 2013 was $3.08, $6.66, and $4.77, respectively. Stock-based compensation expense is included in our consolidated statements of operations in “General and administration expenses.”
Nonvested RSUs at December 31, 2015 totaled 4,774,408 and total unrecognized compensation cost related to unamortized RSUs was $7.6 million as of December 31, 2015. The remaining unrecognized compensation cost related to non-vested RSUs will be amortized over a weighted-average vesting period of approximately 18 months.
Performance-Based Awards
We currently issue two types of performance-based awards: performance cash units (PCUs) and phantom stock units. In prior years, we issued PSUs and PCUs.
PCUs are performance-based awards that contain payout conditions which are based on our performance against our peers with regard to relative return on capital employed (ROCE) over a three-year performance period. PCUs are settled in cash. Each PCU has a nominal value of $100.00. A maximum of 200 percent of the number of PCUs granted may be earned if performance at the maximum level is achieved. PCUs vest to the extent earned at the end of a three year performance period.
Phantom stock units are performance based awards denominated in a number of shares which contain payout conditions based on our performance against our peers with regard to relative total shareholder return (TSR) over a three-year performance period. Phantom stock units are settled in cash or other form of immediately-available funds upon vesting. They represent a grant of hypothetical stock equivalent to shares of stock but the employee receives cash upon vesting. We used a simulation-based option pricing approach to determine the fair value of these awards. A maximum of 250 percent of the number of phantom stock units granted may be earned if performance at the maximum level is achieved. Phantom stock units vest fully at the end of the three year performance period.
PSUs are also performance-based awards that contain payout conditions which are based on our performance against our peers with regard to relative TSR over a three-year performance period. The effects of these conditions are reflected in the grant-date fair value of the award using a simulation-based option pricing approach for valuation. A maximum of 250 percent of the number of PSUs granted may be earned if performance at the maximum level is achieved. PSUs vest to the extent earned at the end of a three year performance period.
We evaluate the terms of each award to determine if the award should be accounted for as equity or a liability under the stock compensation rules of U.S. GAAP. PCUs and phantom stock units are classified as liability awards and PSUs are classified as equity awards.
For performance-based awards with graded vesting conditions, we recognize compensation expense on a straight-line basis over the service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. For market-based awards that vest at the end of the service period, we recognize compensation expense on a straight-line basis through the end of the service period.
The following table presents PCUs granted and forfeited under the Company's Stock Plan:
Compensation expense recognized related to PCUs for the years ended December 31, 2015, 2014, and 2013 was $2.3 million, $1.9 million, and $1.8 million, respectively.
The following table presents phantom stock units granted and forfeited under the Company's Stock Plan:
Compensation expense recognized related to phantom stock units for the year ended December 31, 2015 was $0.4 million, and there was no expense recognized in 2014 or 2013.
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