Accounting for Equity Based Compensation (Phantom Share Units (PSUs) [Member]) | 12 Months Ended |
Dec. 31, 2013 |
Phantom Share Units (PSUs) [Member] | ' |
Accounting for Equity Based Compensation | ' |
Note 15 — Accounting for Equity Based Compensation |
The accounting guidance requires all share-based payments, including grants of stock options, to be recognized in the statement of operations, based on their fair values. Stock based compensation expense for all fiscal periods is based on estimated grant-date fair value. Stock options generally vest over three years. As a result, compensation expense recorded during the period includes amortization related to grants during the period as well as prior grants. Some grants under the 2011 LTIP are marked-to market at each reporting date. Most grants have graded vesting provisions where an equal number of shares vest on each anniversary of the grant date. The Company allocates the total compensation cost on a straight-line attribution method over the requisite service period. Most grants vest upon the fulfillment of service conditions and have no performance or market-based vesting conditions. Certain grants of warrants and restricted stock units include share price driven vesting provisions. Stock based compensation expense that the Company records is included in selling, general and administrative expense. There was no tax benefit in periods reported herein from recording this non-cash expense as such benefits will be recorded upon utilization of the Company’s net operating losses. |
During the calendar years ended December 31, 2013 and 2012, the three months ended December 31, 2011 and the fiscal year ended September 30, 2011, charges associated with all equity-based grants were recorded as follows: |
|
| | | | | | | | | | | | | | | | | | | | |
| | For the Calendar | | | For the Three | | | For the Fiscal | | | | | |
Years Ended | Months Ended | Year Ended | | | | |
December 31, | December 31, | September 30, | | | | |
| | 2013 | | | 2012 | | | 2011 | | | 2011 | | | | | |
| | (in thousands) | | | | | |
Compensation expense | | $ | 5,319 | | | $ | 7,357 | | | $ | 1,015 | | | $ | 1,063 | | | | | |
Board compensation expense | | | 603 | | | | 591 | | | | 50 | | | | 604 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total compensation expense | | | 5,922 | | | | 7,948 | | | | 1,065 | | | | 1,667 | | | | | |
Consulting expense | | | 18 | | | | 74 | | | | 9 | | | | 62 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total expense | | $ | 5,940 | | | $ | 8,022 | | | $ | 1,074 | | | $ | 1,729 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Reduction to both basic and diluted earnings per share from compensation expense | | $ | 0.03 | | | $ | 0.04 | | | $ | — | | | $ | 0.01 | | | | | |
|
The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options and warrants. The assumptions utilized to determine the fair value of options and warrants are indicated in the following table: |
|
| | | | | | | | | | | | | | | | | | | | |
| | For the Calendar | | | For the Three | | For the Fiscal | | | | | | | | |
Years Ended | Months Ended | Year Ended | | | | | | | | |
December 31, | December 31, | September 30, | | | | | | | | |
| | 2013 | | | 2012 | | | 2011 | | 2011 | | | | | | | | |
Risk-free interest rate | | | — | | | | — | | | 1.16% - 1.74% | | 1.55% - 2.69% | | | | | | | | |
Expected volatility | | | — | | | | — | | | 104.00% | | 97.0% - 98.0% | | | | | | | | |
Expected life (in years) | | | — | | | | — | | | 6.00 - 8.00 | | 5.00 - 8.00 | | | | | | | | |
Dividend yield | | | — | | | | — | | | 0.00% | | 0.00% | | | | | | | | |
Forfeiture rate | | | — | | | | — | | | 14.00% | | 0.0% - 8.0% | | | | | | | | |
The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the Company’s stock options. The Company used the last day of the month stock price over the last 54 months to calculate and project expected stock price volatility Expected volatility was assumed to equal historical volatility. The estimated expected term of the grant is based on the Company’s historical exercise experience. The Company included a forfeiture component in the pricing model on certain grants to employees, based on historical forfeiture rate for the grantees’ level employees. |
The number of shares reserved and outstanding as of December 31, 2012 have been adjusted to reflect the increase of approximately 312,000 shares that resulted from adjustments resulting from the Special Distribution. The number of shares reserved, outstanding and available for issuance are as follows: |
|
| | | | | | | | | | | | | | | | | | | | |
| | Shares Reserved | | | Shares Underlying | | | Shares Available for Issuance | |
as of December 31, | Outstanding Awards as of | as of December 31, |
| December 31, | |
| | 2013 | | | 2013 | | | 2012 | | | 2013 | | | 2012 | |
Name of Plan | | (in thousands) | | | | |
2005 Stock Option Plan | | | 1,000 | | | | 195 | | | | 195 | | | | — | | | | — | |
2006 Incentive Award Plan: | | | | | | | | | | | | | | | | | | | | |
Stock options | | | 8,000 | | | | 1,338 | | | | 1,710 | | | | — | | | | 67 | |
Restricted stock units and performance share awards | | | | | | | 1,322 | | | | 1,745 | | | | — | | | | — | |
2009 Incentive Award Plan: | | | | | | | | | | | | | | | | | | | | |
Stock options | | | 32,900 | | | | 1,713 | | | | 2,255 | | | | 4,483 | | | | 3,513 | |
Restricted stock units and performance share awards | | | | | | | 9,991 | | | | 9,223 | | | | — | | | | — | |
Adjustment for Special Distribution | | | 312 | | | | 244 | | | | 312 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | 42,212 | | | | 14,803 | | | | 15,440 | | | | 4,483 | | | | 3,580 | |
Restricted stock units not from a plan | | | 1,225 | | | | 17 | | | | 33 | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | 43,437 | | | | 14,820 | | | | 15,473 | | | | 4,483 | | | | 3,580 | |
| | | | | | | | | | | | | | | | | | | | |
Stock Options |
The Company has multiple stock option plans under which options have been granted to employees, including officers and directors of the Company, to purchase shares of the Company at a price not less than the fair market value of the Company’s common stock at the date the options were granted. Each of these plans allows the issuance of incentive stock options, within the meaning of the Code, and other options pursuant to the plan that constitute non-statutory options. Options under the Company’s 2005 Stock Option Plan generally expire five years from the date of grant or at an alternative date as determined by the committee of the Board that administers the plan. Options under the Company’s 2006 Incentive Award Plan and the 2009 Incentive Award Plan generally expire between three and ten years from the date of grant or at an alternative date as determined by the committee of the Board that administers the plan. Options under the Company’s 2005 Stock Option Plan, 2006 Incentive Award Plan and the 2009 Incentive Award Plan are generally exercisable on the grant date or a vesting schedule between one and three years from the grant date as determined by the committee of the Board that administers the plans. |
|
During the calendar years ended December 31, 2013 and 2012, the three months ended December 31, 2011 and the fiscal year ended September 30, 2011, charges associated with stock option grants were recorded as follows: |
|
| | | | | | | | | | | | | | | | | | | | |
| | For the Calendar Years | | | For the Three | | | For the Fiscal | | | | | |
Ended December 31, | Months Ended | Year Ended | | | | |
| December 31, | September 30, | | | | |
| | 2013 | | | 2012 | | | 2011 | | | 2011 | | | | | |
| | | | | (in thousands) | | | | | |
Compensation expense | | $ | 516 | | | $ | 658 | | | $ | 216 | | | $ | 632 | | | | | |
Board compensation expense | | | — | | | | — | | | | — | | | | 129 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total compensation expense | | | 516 | | | | 658 | | | | 216 | | | | 761 | | | | | |
Consulting expense | | | 18 | | | | 22 | | | | 9 | | | | 30 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total expense | | $ | 534 | | | $ | 680 | | | $ | 225 | | | $ | 791 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Option transactions during the calendar years ended December 31, 2013 and 2012, the three months ended December 31, 2011 and the fiscal year ended September 30, 2011 are summarized as follows: |
| | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Weighted | | | Aggregate | | | | | | | | | |
Shares | Average | Intrinsic | | | | | | | | |
| Exercise | Value | | | | | | | | |
| Price | | | | | | | | | |
Outstanding at September 30, 2010 | | | 2,407,000 | | | $ | 2.9 | | | | | | | | | | | | | |
Granted | | | 3,217,000 | | | | 0.96 | | | | | | | | | | | | | |
Exercised | | | — | | | | | | | | | | | | | | | | | |
Canceled / Expired | | | (689,000 | ) | | | 2.06 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at September 30, 2011 | | | 4,935,000 | | | | 1.75 | | | | | | | | | | | | | |
Granted | | | 50,000 | | | | 1.58 | | | | | | | | | | | | | |
Exercised | | | (32,000 | ) | | | 0.95 | | | | | | | | | | | | | |
Canceled / Expired | | | (281,000 | ) | | | 3.67 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2011 | | | 4,672,000 | | | | 1.64 | | | | | | | | | | | | | |
Granted | | | — | | | | — | | | | | | | | | | | | | |
Exercised | | | (276,000 | ) | | | 1.1 | | | | | | | | | | | | | |
Canceled / Expired | | | (236,000 | ) | | | 1.89 | | | | | | | | | | | | | |
Adjustment for Special Distribution | | | 312,000 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2012 | | | 4,472,000 | | | | 1.67 | | | $ | 5,848,000 | | | | | | | | | |
Granted | | | — | | | | — | | | | | | | | | | | | | |
Exercised | | | (711,000 | ) | | | 1.03 | | | | | | | | | | | | | |
Canceled / Expired | | | (271,000 | ) | | | 2.4 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | | | 3,490,000 | | | $ | 1.59 | | | $ | 2,144,448 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Options exercisable at December 31, 2013 | | | 3,436,000 | | | $ | 1.6 | | | $ | 2,110,045 | | | | | | | | | |
Options exercisable at December 31, 2012 | | | 3,485,000 | | | $ | 1.73 | | | | | | | | | | | | | |
Options exercisable at December 31, 2011 | | | 2,739,000 | | | $ | 2.11 | | | | | | | | | | | | | |
Options exercisable at September 30, 2011 | | | 2,116,000 | | | $ | 2.81 | | | | | | | | | | | | | |
Weighted average fair value of options granted during the three months ended December 31, 2011 | | | | | | $ | 1.32 | | | | | | | | | | | | | |
Weighted average fair value of options granted during the fiscal year ended September 30, 2011 | | | | | | $ | 0.78 | | | | | | | | | | | | | |
|
The aggregate intrinsic value was calculated based on the difference between the Company’s stock price on December 31, 2013 and the exercise price of the outstanding shares, multiplied by the number of shares underlying outstanding awards as of December 31, 2013. The total intrinsic values of options exercised during the calendar years ended December 31, 2013 and 2012, the three months ended December 31, 2011 and the fiscal year ended September 30, 2011 were $0.9 million, $0.3 million, $21,000 and $0, respectively. |
As of December 31, 2013, there was $25,460 of total unrecognized compensation cost related to nonvested share-based compensation arrangements from previously granted stock options. This cost is expected to be recognized over a weighted-average period of 0.75 years. |
The following information summarizes stock options outstanding and exercisable at December 31, 2013: |
|
| | | | | | | | | | | | | | | | | | | | |
| | Outstanding | | | | | | Exercisable | |
| | | | | Weighted Average | | | Weighted | | | | | | Weighted | |
| | | | | Remaining | | | Average | | | | | | Average | |
| | Number | | | Contractual Life | | | Exercise | | | Number | | | Exercise | |
Range of Exercise Prices | | Outstanding | | | in Years | | | Price | | | Exercisable | | | Price | |
$0.56-$0.92 | | | 2,193,000 | | | | 6.6 | | | $ | 0.88 | | | | 2,166,000 | | | $ | 0.88 | |
$0.96-$1.00 | | | 27,000 | | | | 7.49 | | | | 0.96 | | | | 18,000 | | | | 0.96 | |
$1.12-$1.51 | | | 493,000 | | | | 2.72 | | | | 1.31 | | | | 475,000 | | | | 1.3 | |
$2.07-$2.50 | | | 32,000 | | | | 2.31 | | | | 2.07 | | | | 32,000 | | | | 2.07 | |
$3.50-$3.50 | | | 21,000 | | | | 2.95 | | | | 3.5 | | | | 21,000 | | | | 3.5 | |
$3.87-$4.00 | | | 724,000 | | | | 2.55 | | | | 3.88 | | | | 724,000 | | | | 3.88 | |
| | | | | | | | | | | | | | | | | | | | |
| | | 3,490,000 | | | | 5.16 | | | $ | 1.6 | | | | 3,436,000 | | | $ | 1.6 | |
| | | | | | | | | | | | | | | | | | | | |
Warrants |
During fiscal 2005, the Company issued a warrant to Management Resource Center, Inc, an entity controlled by D. Hunt Ramsbottom, the Company’s President and CEO. During the last quarter of fiscal 2005, Mr. Ramsbottom assigned the warrant to East Cliff Advisors, LLC, an entity controlled by Mr. Ramsbottom. The warrant is for the purchase of 3.5 million shares of the Company’s common stock at an exercise price of $1.82 per share. The warrant has vested or will vest in the following incremental amounts upon such time as the Company’s stock reaches the stated closing prices for 12 consecutive trading days: 10% at $2.10 (vested); 15% at $2.75 (vested); 20% at $3.50 (vested); 25% at $4.25 (vested); and 30% at $5.25 (not vested). The Company recognizes compensation expense as the warrants vest, as the total number of shares to be granted under the warrant was not known on the grant date. In fiscal 2005, the Company accounted for the warrant under guidance for accounting for stock issued to employees due to the employer-employee relationship between the Company and Mr. Ramsbottom. Under the guidance applicable at the time, compensation cost would be recognized for stock based compensation granted to employees only when the exercise price of the Company’s stock options granted is less than the market price of the underlying common stock on the date of grant. |
The original warrants covered 2,082,500 shares that had vested and 1,050,000 shares that had not vested. East Cliff Advisors assigned 262,500 unvested warrants to a third party and continued to hold 787,500 unvested warrants. In January 2009, the vesting terms and expiration for the warrants held by East Cliff Advisors, LLC were amended. As amended, with respect to the unvested warrants representing 787,500 shares, half of these warrants vested on December 31, 2011. The exercise price of the warrants remained at $1.82 per share. The expiration date for this half of the warrants was extended from August 4, 2010 to December 31, 2012. The warrants were excised during the calendar year ended December 31, 2012. The other 393,750 unvested warrants and the original vested 2,082,500 warrants expired on December 31, 2011. |
|
During the calendar years ended December 31, 2013 and 2012, the three months ended December 31, 2011 and the fiscal year ended September 30, 2011, charges associated with grants of warrants were recorded as follows: |
|
| | | | | | | | | | | | | | | | | | | | |
| | For the Calendar | | | For the Three | | | For the Fiscal | | | | | |
Years Ended | Months Ended | Year Ended | | | | |
December 31, | December 31, | September 30, | | | | |
| | 2013 | | | 2012 | | | 2011 | | | 2011 | | | | | |
| | | | | | | | (in thousands) | | | | | |
Compensation expense | | $ | — | | | $ | — | | | $ | 6 | | | $ | 26 | | | | | |
Board compensation expense | | | — | | | | — | | | | — | | | | — | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total compensation expense | | $ | — | | | $ | — | | | $ | 6 | | | $ | 26 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Warrant transactions during the calendar years ended December 31, 2013 and 2012, the three months ended December 31, 2011 and the fiscal year ended September 30, 2011 are summarized as follows: |
|
| | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Weighted | | | | | | | | | | | | | |
Shares | Average | | | | | | | | | | | | |
| Exercise | | | | | | | | | | | | |
| Price | | | | | | | | | | | | |
Outstanding at September 30, 2010 | | | 12,596,000 | | | $ | 1.89 | | | | | | | | | | | | | |
Granted | | | 1,980,000 | | | | 0.99 | | | | | | | | | | | | | |
Exercised | | | — | | | | — | | | | | | | | | | | | | |
Canceled / Expired | | | — | | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at September 30, 2011 | | | 14,576,000 | | | $ | 1.77 | | | | | | | | | | | | | |
Granted | | | — | | | | — | | | | | | | | | | | | | |
Vested | | | 394,000 | | | | 1.82 | | | | | | | | | | | | | |
Exercised | | | (2,464,000 | ) | | | 0.91 | | | | | | | | | | | | | |
Canceled / Expired | | | (2,082,000 | ) | | | 1.82 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2011 | | | 10,424,000 | | | $ | 1.96 | | | | | | | | | | | | | |
Granted | | | — | | | | — | | | | | | | | | | | | | |
Vested | | | — | | | | — | | | | | | | | | | | | | |
Exercised | | | (5,156,000 | ) | | | 1.27 | | | | | | | | | | | | | |
Canceled / Expired | | | (4,018,000 | ) | | | 3.28 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2012 | | | 1,250,000 | | | $ | 0.57 | | | | | | | | | | | | | |
Granted | | | — | | | | — | | | | | | | | | | | | | |
Vested | | | — | | | | — | | | | | | | | | | | | | |
Exercised | | | — | | | | — | | | | | | | | | | | | | |
Canceled / Expired | | | — | | | | — | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | | | 1,250,000 | | | $ | 0.57 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Warrants exercisable at December 31, 2013 | | | 1,250,000 | | | $ | 0.57 | | | | | | | | | | | | | |
Warrants exercisable at December 31, 2012 | | | 1,250,000 | | | $ | 0.57 | | | | | | | | | | | | | |
Warrants exercisable at December 31, 2011 | | | 10,424,000 | | | $ | 1.96 | | | | | | | | | | | | | |
Warrants exercisable at September 30, 2011 | | | 14,576,000 | | | $ | 1.77 | | | | | | | | | | | | | |
Weighted average fair value of warrants granted during the fiscal year ended September 30, 2011 | | | | | | $ | 0.64 | | | | | | | | | | | | | |
|
As of December 31, 2013, there was no unrecognized compensation cost related to share-based compensation arrangements from previously granted warrants. |
The following information summarizes warrants outstanding and exercisable at December 31, 2013: |
|
| | | | | | | | | | | | | | | | | | | | |
| | Outstanding | | | Exercisable | |
| | | | | Weighted Average | | | Weighted | | | | | | Weighted | |
| | | | | Remaining | | | Average | | | | | | Average | |
| | Number | | | Contractual Life | | | Exercise | | | Number | | | Exercise | |
Range of Exercise Prices | | Outstanding | | | in Years | | | Price | | | Exercisable | | | Price | |
$0.57 | | | 1,250,000 | | | | 9.25 | | | $ | 0.57 | | | | 1,250,000 | | | $ | 0.57 | |
Restricted Stock Units and Performance Share Awards |
The Company issues Restricted Stock Units (“RSUs”) which are equity-based instruments that may be settled in shares of common stock of the Company. In the calendar years ended December 31, 2013 and 2012, the three months ended December 31, 2011 and the fiscal year ended September 30, 2011, the Company issued RSUs and Performance Share Awards to certain employees and directors as long-term incentives. |
Most RSU agreements vest with the passage of time and include a three-year vesting period such that one-third will vest on each annual anniversary date of the commencement date of the agreement. Other RSU agreements contain vesting provisions based on performance against certain specific goals. The vesting of all RSUs is contingent on continued employment of the grantee. The vesting of various RSUs are subject to partial or complete acceleration under certain circumstances, including termination without cause, end of employment for good reason or upon a change in control (in each case as defined in the agreement). In certain agreements, if the Company fails to offer to renew an employment agreement on competitive terms or if a termination occurs which would entitle the grantee to severance during the period of three months prior and two years after a change in control, the vesting of the restricted stock unit grant will accelerate. |
The compensation expense incurred by the Company for RSUs is based on the closing market price of the Company’s common stock on the date of grant and is amortized ratably on a straight-line basis over the requisite service period and charged to selling, general and administrative expense with a corresponding increase to additional paid-in capital. The compensation expense incurred by the Company for Performance Share Awards is based on the Monte Carlo valuation model. For the 2013 Performance Share Awards, the key assumptions used in the Monte Carlo valuation model were an expected volatility of 57.51%, a risk-free rate of interest of 0.64% and a dividend yield of 0.00%. |
During the calendar years ended December 31, 2013 and 2012, the three months ended December 31, 2011 and the fiscal year ended September 30, 2011, charges associated with RSUs and Performance Share Award grants were recorded as follows: |
|
| | | | | | | | | | | | | | | | | | | | |
| | For the Calendar | | | For the Three | | | For the Fiscal | | | | | |
Years Ended | Months Ended | Year Ended | | | | |
December 31, | December 31, | September 30, | | | | |
| | 2013 | | | 2012 | | | 2011 | | | 2011 | | | | | |
| | (in thousands) | | | | | |
Compensation expense | | $ | 4,803 | | | $ | 6,699 | | | $ | 793 | | | $ | 405 | | | | | |
Board compensation expense | | | 202 | | | | 190 | | | | 50 | | | | 75 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Total compensation expense | | $ | 5,005 | | | $ | 6,889 | | | $ | 843 | | | $ | 480 | | | | | |
| | | | | | | | | | | | | | | | | | | | |
|
RSU and Performance Share Award transactions during the calendar year ended December 31, 2013 and 2012, the three months ended December 31, 2011 and the fiscal year ended September 30, 2011 are summarized as follows: |
|
| | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Weighted | | | Aggregate | | | | | | | | | |
Shares | Average | Intrinsic | | | | | | | | |
| Grant Date | Value | | | | | | | | |
| Fair Value | | | | | | | | | |
Outstanding at September 30, 2010 | | | 7,560,000 | | | | 1.3 | | | | | | | | | | | | | |
Granted | | | 2,195,000 | | | | 0.98 | | | | | | | | | | | | | |
Vested and Settled in Shares | | | (1,212,000 | ) | | | 1.35 | | | | | | | | | | | | | |
Vested and Surrendered for Withholding Taxes Payable | | | (578,000 | ) | | | 1.33 | | | | | | | | | | | | | |
Canceled / Expired | | | (1,342,000 | ) | | | 1.3 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at September 30, 2011 | | | 6,623,000 | | | | 1.18 | | | | | | | | | | | | | |
Granted | | | 6,468,000 | | | | 1.5 | | | | | | | | | | | | | |
Vested and Settled in Shares | | | (739,000 | ) | | | 1.08 | | | | | | | | | | | | | |
Vested and Surrendered for Withholding Taxes Payable | | | (371,000 | ) | | | 1.09 | | | | | | | | | | | | | |
Canceled / Expired | | | (93,000 | ) | | | 1.12 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2011 | | | 11,888,000 | | | | 1.37 | | | | | | | | | | | | | |
Granted | | | 3,099,000 | | | | 2.55 | | | | | | | | | | | | | |
Vested and Settled in Shares | | | (2,080,000 | ) | | | 1.35 | | | | | | | | | | | | | |
Vested and Surrendered for Withholding Taxes Payable | | | (975,000 | ) | | | 1.4 | | | | | | | | | | | | | |
Canceled / Expired | | | (931,000 | ) | | | 1.37 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2012 | | | 11,001,000 | | | | 1.71 | | | $ | 28,934,000 | | | | | | | | | |
Granted | | | 4,999,000 | | | | 1.66 | | | | | | | | | | | | | |
Vested and Settled in Shares | | | (2,680,000 | ) | | | 1.49 | | | | | | | | | | | | | |
Vested and Surrendered for Withholding Taxes Payable | | | (1,812,000 | ) | | | 1.37 | | | | | | | | | | | | | |
Canceled / Expired | | | (178,000 | ) | | | 2.18 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | | | 11,330,000 | | | | 1.76 | | | $ | 23,793,000 | | | | | | | | | |
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Of the 11,330,000 RSUs and Performance Share Awards outstanding at December 31, 2013, 1,322,000 and 9,991,000 were granted pursuant to the Company’s 2006 Incentive Award Plan and 2009 Incentive Award Plan, respectively. The other 17,000 RSUs were not granted pursuant to a stock option plan but were “inducement grants.” Of the 11,001,000 RSUs and Performance Share Awards outstanding at December 31, 2012, 1,745,000 and 9,223,000 were granted pursuant to the Company’s 2006 Incentive Award Plan and 2009 Incentive Award Plan, respectively. Of the 11,888,000 RSUs and Performance Share Awards outstanding at December 31, 2011, 2,567,000 and 8,963,000 were granted pursuant to the Company’s 2006 Incentive Award Plan and 2009 Incentive Award Plan, respectively. The other 358,000 RSUs were not granted pursuant to a stock option plan but were “inducement grants.” Of the 6,623,000 RSUs and Performance Share Awards outstanding at September 30, 2011, 1,812,000 and 4,228,000 were granted pursuant to the Company’s 2006 Incentive Award Plan and 2009 Incentive Award Plan, respectively. The other 583,000 RSUs were not granted pursuant to a stock option plan but were “inducement grants.” |
As of December 31, 2013, there was $8.0 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements from previously granted RSUs and Performance Share Awards. That cost is expected to be recognized over a weighted-average period of 1.9 years. |
The grant date fair value of RSUs and Performance Share Awards that vested during the calendar year ended December 31, 2013 and 2012, the three months ended December 31, 2011 and the fiscal year ended September 30, 2011 was $3.9 million, $4.2 million, $1.2 million and $2.4 million, respectively. |
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Stock Grants |
During the calendar year ended December 31, 2013, the Company issued a total of 178,400 shares of stock to its directors, which were fully vested at date of grant. This resulted in stock-based compensation expense of $401,400 for the shares granted to the directors. During the calendar year ended December 31, 2012, the Company issued a total of 259,400 shares of stock which were fully vested at date of grant. Of this amount, 234,400 shares, which were evenly distributed, were granted to the directors and 25,000 shares were granted to a consultant. This resulted in stock-based compensation expense of $401,000 and $52,000 for the shares granted to the directors and consultant, respectively. During the three months ended December 31, 2011, the Company did not issue any grants of stock. During the fiscal year ended September 30, 2011, the Company issued a total of 465,000 shares of stock which were fully vested at date of grant. Of this amount, 440,000 shares, which were evenly distributed, were granted to the directors and 25,000 shares were granted to a consultant. This resulted in stock-based compensation expense of $400,000 and $32,000 for the shares granted to the directors and consultant, respectively. |
2011 LTIP |
Some grants under the 2011 LTIP are marked-to market at each reporting date. During the calendar years ended December 31, 2013 and 2012 and the three months ended December 31, 2011, charges associated with all equity-based grants issued by RNP under the 2011 LTIP were recorded as follows: |
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| | For the Calendar Years | | | For the Three Months | | | | | | | | | |
Ended December 31, | Ended December 31, | | | | | | | | |
| | 2013 | | | 2012 | | | 2011 | | | | | | | | | |
| | (in thousands) | | | | | | | | | |
Stock based compensation expense | | $ | 1,460 | | | $ | 2,827 | | | $ | 63 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Phantom unit transactions during the calendar years ended December 31, 2013 and 2012 and the three months ended December 31, 2011 are summarized as follows: |
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| | | | | | | | | | | | | | | | | | | | |
| | Number of | | | Weighted | | | Aggregate | | | | | | | | | |
Shares | Average | Intrinsic | | | | | | | | |
| Grant Date | Value | | | | | | | | |
| Fair Value | | | | | | | | | |
Granted | | | 163,388 | | | $ | 18.4 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2011 | | | 163,388 | | | | 18.4 | | | | | | | | | | | | | |
Granted | | | 54,059 | | | | 34.86 | | | | | | | | | | | | | |
Vested and Settled in Shares | | | (42,350 | ) | | | (15.68 | ) | | | | | | | | | | | | |
Vested and Surrendered for Withholding Taxes Payable | | | (20,040 | ) | | | (18.40 | ) | | | | | | | | | | | | |
Canceled / Expired | | | (119 | ) | | | (18.40 | ) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2012 | | | 154,938 | | | $ | 23.78 | | | $ | 5,839,626 | | | | | | | | | |
Granted | | | 116,508 | | | | 18.71 | | | | | | | | | | | | | |
Vested and Settled in Shares | | | (49,409 | ) | | | (23.42 | ) | | | | | | | | | | | | |
Vested and Surrendered for Withholding Taxes Payable | | | (27,127 | ) | | | (21.75 | ) | | | | | | | | | | | | |
Canceled / Expired | | | (1,278 | ) | | | (35.14 | ) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | | | 193,632 | | | $ | 20.97 | | | $ | 3,407,929 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
During the calendar year ended December 31, 2013, RNP issued 116,508 unit-settled phantom units (which entitle the holder to distribution rights during the vesting period) covering RNP’s common units. 108,218 of the phantom units are time-vested awards that vest in three equal annual installments. 2,780 of the phantom units were time-vested awards issued to the directors that vested on the one-year anniversary of the Offering. The phantom unit grants resulted in unit-based compensation expense of $1.2 million for the calendar year ended December 31, 2013. |
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As of December 31, 2013, there was $3.0 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements from previously granted phantom units. That cost is expected to be recognized over a weighted-average period of 2.2 years. |
During the calendar year ended December 31, 2013, RNP issued a total of 5,510 common units which were fully vested at date of grant. The common units were issued to the directors and resulted in unit-based compensation expense of $0.3 million. |