Stock-Based Compensation (Notes) | 6 Months Ended |
Jun. 30, 2014 |
Share-based Compensation [Abstract] | ' |
Stock-Based Compensation [Text Block] | ' |
Stock-Based Compensation |
Our 2011 Management Incentive Plan (the Plan) was designed to attract, retain and motivate key employees. Awards granted under the Plan are settled in shares of Class A common stock. At the beginning of each year, the Plan provides that the number of shares available for issuance automatically increases by an amount equal to 1.5% of the total number of shares of Class A and Class B common stock outstanding on December 31st of the previous year. On January 2, 2014, 557,894 additional shares were made available for issuance under the Plan. Through June 30, 2014, the remaining aggregate number of shares of our common stock authorized for issuance under the Plan was 4,068,523. Through June 30, 2014, there were 4,707,168 shares of our Class A common stock that were issued and remain outstanding as a result of equity awards granted under the Plan. The Plan expires in May 2021. |
The Plan is administered by the compensation committee of our Board of Directors, along with its delegates. Subject to the express provisions of the Plan, the committee has the Board of Directors’ authority to administer and interpret the Plan, including the discretion to determine the exercise price, vesting schedule, contractual life and the number of shares to be issued. |
Stock Compensation Expense—For the three months ended June 30, 2014 and 2013, we recorded $1.0 million and $1.4 million of stock-based compensation expense, respectively. For the six months ended June 30, 2014 and 2013, we recorded $2.2 million and $2.8 million of stock-based compensation expense, respectively. No compensation expense of employees with stock awards, including stock-based compensation expense, was capitalized during the periods. For the six months ended June 30, 2014 and 2013, the total recognized tax deficiency from the exercise of stock options, vested cancellations and the vesting of restricted stock was $1.9 million and $1.3 million, respectively. |
Stock Options—We typically issue options that vest over three years in equal annual installments beginning on the first anniversary of the date of grant. Under the terms of the Plan, the contractual life of the option grants may not exceed eight years. During the six months ended June 30, 2014 and 2013, we issued options that expire five years from the date of grant. |
Fair Value Determination—We have used the Black-Scholes-Merton option pricing model to determine fair value of our awards on the date of grant. We will reconsider the use of the Black-Scholes-Merton model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that cannot be reasonably estimated under this model. |
The following weighted-average assumptions were used for option grants during the six months ended June 30, 2014 and 2013: |
Volatility—The expected volatility of the options granted was estimated based upon historical volatility of the Company’s share price through weekly observations of the Company’s trading history. |
Expected Term—The expected term of options granted to employees during the six months ended June 30, 2014 and 2013 was determined from historical exercises of the grantee population. For all grants valued during the six months ended June 30, 2014 and 2013, the options had graded vesting over three years in equal annual installments beginning on the first anniversary of the date of grant and a contractual term of five years. |
Risk-free Interest Rate—The yield on zero-coupon U.S. Treasury strips was used to extrapolate a forward-yield curve. This “term structure” of future interest rates was then input into a numeric model to provide the equivalent risk-free rate to be used in the Black-Scholes-Merton model based on the expected term of the underlying grants. |
Dividend Yield—The Black-Scholes-Merton valuation model requires an expected dividend yield as an input. We have calculated our expected dividend yield based on an expected annual cash dividend of $0.84 per share. |
The following table summarizes weighted-average assumptions used in our calculations of fair value for the six months ended June 30, 2014 and 2013: |
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| Six months ended | | | | | | | |
June 30, | | | | | | | |
| 2014 | | 2013 | | | | | | | |
Volatility | 29.88 | % | | 32.45 | % | | | | | | | |
Expected life of options | 3 years | | | 3 years | | | | | | | | |
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Risk-free interest rate | 0.85 | % | | 0.44 | % | | | | | | | |
Dividend yield | 3 | % | | 3 | % | | | | | | | |
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Stock Option Activity—During the six months ended June 30, 2014, we granted stock options to purchase 492,004 shares of Class A common stock at a weighted-average exercise price of $29.17 per share, which reflects the fair market value of the shares on the date of grant. The weighted-average fair value of options granted during the six months ended June 30, 2014 and 2013, as determined under the Black-Scholes-Merton valuation model, was $4.90 and $4.81, respectively. These options vest over three years in equal annual installments beginning on the first anniversary of the date of the grant and have a contractual term of five years. Option grants that vested during the six months ended June 30, 2014 and 2013 had a combined fair value of $2.6 million and $3.9 million, respectively. |
The following table summarizes stock option activity for the year ended December 31, 2013 and the six months ended June 30, 2014: |
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| Number of Shares | | Weighted Average Exercise Price | | Aggregate Intrinsic Value | | |
(in thousands) | | |
Stock options at December 31, 2012 | 3,421,196 | | | $ | 38.61 | | | $ | 626 | | | |
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Granted | 957,525 | | | $ | 27.42 | | | | | |
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Exercised | (79,567 | ) | | $ | 22.75 | | | $ | 400 | | | |
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Cancelled and expired | (899,034 | ) | | $ | 39.84 | | | | | |
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Stock options at December 31, 2013 | 3,400,120 | | | $ | 35.51 | | | $ | 4,488 | | | |
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Granted | 492,004 | | | $ | 29.17 | | | | | |
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Exercised | (53,025 | ) | | $ | 24.61 | | | $ | 261 | | | |
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Cancelled and expired | (502,277 | ) | | $ | 40.61 | | | | | |
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Stock options at June 30, 2014 | 3,336,822 | | | $ | 33.98 | | | $ | 3,661 | | | |
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The following table summarizes non-vested stock options for the six months ended June 30, 2014: |
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| Number of Shares | | Weighted Average Fair Value | | | | | | |
Non-vested stock options at December 31, 2013 | 1,567,945 | | | $ | 5.51 | | | | | | | |
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Granted | 492,004 | | | $ | 4.9 | | | | | | | |
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Vested | (354,501 | ) | | $ | 7.22 | | | | | | | |
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Cancelled | (82,987 | ) | | $ | 5.16 | | | | | | | |
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Non-vested stock options at June 30, 2014 | 1,622,461 | | | $ | 4.97 | | | | | | | |
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The following table includes information concerning stock options exercisable and stock options expected to vest at June 30, 2014: |
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| Number of Shares | | Weighted Average Remaining Contractual Life | | Weighted Average Exercise Price | | Aggregate Intrinsic Value |
(years) | (in thousands) |
Stock options exercisable | 1,714,361 | | | 2 | | $ | 39.26 | | | $ | 1,151 | |
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Stock options expected to vest | 1,428,837 | | | 4 | | $ | 28.4 | | | $ | 33,359 | |
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Stock options exercisable and expected to vest | 3,143,198 | | | | | | | |
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Unrecognized compensation expense related to outstanding stock options expected to vest as of June 30, 2014 was $5.5 million, which is expected to be recognized over a weighted-average period of 1.9 years and will be adjusted for any future changes in estimated forfeitures. |
Restricted Stock—Under the Plan, we have issued restricted stock. A restricted stock award is an issuance of shares that cannot be sold or transferred by the recipient until the vesting period lapses. Restricted shares issued to employees vest over three years in equal annual installments beginning on the first anniversary of the grant date, contingent upon employment with the Company on the vesting dates. Restricted shares issued to members of our Board of Directors vest in one year. The related compensation expense is recognized over the service period and is based on the grant date fair value of the stock and the number of shares expected to vest. |
Restricted Stock Activity—The following table summarizes the restricted stock activity during the year ended December 31, 2013 and the six months ended June 30, 2014: |
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| Number of Shares | | Grant Date Fair Value | | | | | | |
(in thousands) | | | | | | |
Non-vested restricted stock at December 31, 2012 | 27,333 | | | | | | | | | |
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Granted | 24,000 | | | $ | 664 | | | | | | | |
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Vested | (30,333 | ) | | $ | 825 | | | | | | | |
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Forfeited | — | | | | | | | | | |
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Non-vested restricted stock at December 31, 2013 | 21,000 | | | | | | | | | |
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Granted | 21,000 | | | $ | 643 | | | | | | | |
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Vested | (21,000 | ) | | $ | 581 | | | | | | | |
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Forfeited | — | | | | | | | | | |
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Non-vested restricted stock at June 30, 2014 | 21,000 | | | | | | | | | |
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