Stock Based Compensation Expense | 3 Months Ended |
Mar. 31, 2014 |
Stock Based Compensation Expense | ' |
11. Stock Based Compensation Expense—The Company accounts for stock-based awards to employees and directors in accordance with FASB ASC 718, “Share-Based Payment,” which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors including shares of common stock granted for services, employee stock options, and employee stock purchases related to the Employee Stock Purchase Plan (“employee stock purchases”) based on estimated fair values. |
Stock Options — During the three months ended March 31, 2014, the Company did not grant any employees options to acquire shares of common stock. |
Option activity within each plan is as follows: |
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| | Incentive | | | Weighted Average | | | Exercisable | | | | | | | | | |
Stock Option | Price Per Share | Weighted | | | | | | | | |
Plans | | Average | | | | | | | | |
| | Price | | | | | | | | |
| | Per Share | | | | | | | | |
Balance outstanding, December 31, 2013 | | | 561,029 | | | $ | 7.76 | | | $ | 7.7 | | | | | | | | | |
Options exercised, $7.50 | | | (82,650 | ) | | | 7.5 | | | | | | | | | | | | | |
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Balance outstanding, March 31, 2014 | | | 478,379 | | | $ | 7.8 | | | $ | 7.74 | | | | | | | | | |
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Information relating to stock options at March 31, 2014 summarized by exercise price is as follows: |
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| | Outstanding Weighted Average | | | Exercisable Weighted | |
Average |
Exercise Price Per Share | | Shares | | | Remaining | | | Exercise | | | Shares | | | Exercise | |
Life | Price | Price |
(Months) | | |
Incentive Stock Option Plan: | | | | | | | | | | | | | | | | | | | | |
$7.50 | | | 451,700 | | | | 80 | | | $ | 7.5 | | | | 451,700 | | | $ | 7.5 | |
$11.32—$14.75 | | | 26,679 | | | | 77 | | | $ | 12.9 | | | | 20,012 | | | $ | 13.1 | |
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| | | 478,379 | | | | | | | $ | 7.8 | | | | 471,712 | | | $ | 7.74 | |
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The weighted average exercise prices for options granted and exercisable and the weighted average remaining contractual life for options outstanding as of March 31, 2014 was as follows: |
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| | Number | | | Weighted | | | Weighted | | | Intrinsic | | | | | |
of | Average | Average | Value | | | | |
Shares | Exercise | Remaining | (thousands) | | | | |
| Price | Contractual | | | | | |
| | Life | | | | | |
| | (Months) | | | | | |
As of March 31, 2014: | | | | | | | | | | | | | | | | | | | | |
Incentive Stock Option Plans: | | | | | | | | | | | | | | | | | | | | |
Outstanding | | | 478,379 | | | $ | 7.8 | | | | 80 | | | $ | 6,625 | | | | | |
Expected to Vest | | | 478,351 | | | $ | 7.8 | | | | 80 | | | $ | 6,625 | | | | | |
Exercisable | | | 471,712 | | | $ | 7.74 | | | | 80 | | | $ | 6,563 | | | | | |
During the three months ended March 31, 2014 and 2013, the Company recognized stock-based compensation expense, excluding expense related to modifications, related to stock options of $11 and $209, respectively. |
As of March 31, 2014, the Company had approximately $10 of unamortized stock-based compensation expenses related to unvested stock options outstanding. This amount will be recognized over the weighted-average period of 0.2 years. This projected expense will change if any stock options are granted or cancelled prior to the respective reporting periods or if there are any changes required to be made for estimated forfeitures. |
Restricted Shares — A status summary of non-vested shares as of and for the three months ended March 31, 2014 is presented below: |
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| | Number | | | Weighted | | | | | | | | | | | | | |
of | Average | | | | | | | | | | | | |
Shares | Grant- | | | | | | | | | | | | |
| Date | | | | | | | | | | | | |
| Fair Value | | | | | | | | | | | | |
Nonvested shares at December 31, 2013 | | | 376,702 | | | $ | 24.85 | | | | | | | | | | | | | |
Vested | | | (1,000 | ) | | | 31.83 | | | | | | | | | | | | | |
Forfeited | | | (1,840 | ) | | | 24.23 | | | | | | | | | | | | | |
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Nonvested shares at March 31, 2014 | | | 373,862 | | | $ | 24.83 | | | | | | | | | | | | | |
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Restricted stock grants — During the three months ended March 31, 2014, the Company did not grant any shares of restricted common stock. |
During the three months ended March 31, 2013, the Company granted a total of 145,884 shares of common stock. Of these, 3,000 shares will vest one-third each year on the anniversaries of the employee’s employment date and the balance will cliff vest after three years of service. The shares granted in 2013 were average fair valued at $31.27 per share. The fair value was determined by using the publicly traded share price as of the date of grant. The Company is recognizing as expense the value of restricted shares over the required service period of three years. During the three months ended March 31, 2013, there were 8,000 restricted shares that forfeited, which had an average grant-date value of $22.17 per share. |
During the three months ended March 31, 2014 and 2013, the Company recognized stock-based compensation expense related to restricted shares of $834 and $479, respectively. |
As of March 31, 2014, the Company had approximately $4,640 of unamortized stock-based compensation expenses related to unvested restricted shares. This amount will be recognized over the weighted-average period of 1.6 years. This projected expense will change if any restricted shares are granted or cancelled prior to the respective reporting periods or if there are any changes required to be made for estimated forfeitures. |
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Performance Based Shares—A status summary of non-vested performance based shares as of and for the three months ended March 31, 2014 is presented below: |
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| | Number | | | Weighted | | | | | | | | | | | | | |
of | Average | | | | | | | | | | | | |
Shares | Grant- | | | | | | | | | | | | |
| Date | | | | | | | | | | | | |
| Fair Value | | | | | | | | | | | | |
Nonvested shares at December 31, 2013 | | | 24,637 | | | $ | 28.43 | | | | | | | | | | | | | |
Granted | | | — | | | | — | | | | | | | | | | | | | |
Vested | | | — | | | | — | | | | | | | | | | | | | |
Forfeited | | | — | | | | — | | | | | | | | | | | | | |
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Nonvested shares at March 31, 2014 | | | 24,637 | | | $ | 28.43 | | | | | | | | | | | | | |
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Performance Based Shares — During the three months ended March 31, 2014, the Company did not grant any performance based shares. |
During 2013, the Company granted a total of 24,637 performance based shares that will cliff vest after three years of service. 80% of these performance based shares are based upon net income and net sales for the period commencing April 1, 2013 and ending December 31, 2015; the remaining 20% of performance based shares are based upon the Company’s stock price appreciation over the course of the period commencing June 6, 2013 and ending on December 31, 2015. Both parts of these awards vest in three years, but are subject to reduction to a minimum (or even zero) for meeting less than the targeted performance and to increase to a maximum of 200% for meeting in excess of the targeted performance. |
The performance based shares related to net income and net sales have an average fair value of $30.13 per share. The fair value was determined by using the publicly traded share price as of the date of grant. The performance based shares related to the Company’s stock price have an average fair value of $15.31 per share. The fair value was determined by using the Monte Carlo valuation method. For awards with performance conditions, the Company recognizes share-based compensation cost on a straight-line basis for each performance criteria over the implied service period when the Company believes it is probable that the performance targets, as defined in the agreements, will be achieved. |
During the three months ended March 31, 2014, the Company recognized a reduction in stock-based compensation expense related to performance based shares of $77. There were no performance based shares issued by the Company prior to those issued during the quarter ended June 30, 2013. |
As of March 31, 2014, the Company had approximately $507 of unamortized stock-based compensation expenses related to unvested performance based shares. This amount will be recognized over the weighted-average period of 2.2 years. This projected expense will change if any performance based shares are granted or cancelled prior to the respective reporting periods or if there are any changes required to be made for estimated forfeitures. |