Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2014 |
Stock-Based Compensation | ' |
7 | Stock-Based Compensation | | | | | | | | | | | |
As of September 30, 2014, the Company had three active stock-based compensation plans: the 2011 Omnibus Incentive Plan (the “Omnibus Plan”), the Equity Plan for Non-Employee Directors (the “Equity Plan”) and the Stock Appreciation Rights Plan (the “SARs Plan”). Outstanding awards previously issued under inactive or suspended plans will continue to vest and remain exercisable in accordance with the terms of the respective plans. On April 29, 2014, the Company’s shareholders approved an increase of 850,000 shares to be issued under the Omnibus Plan. As of September 30, 2014, there were 904,318 shares, 69,088 shares and 114,363 shares reserved for issuance pursuant to future awards under the Omnibus Plan, the Equity Plan and the SARs Plan, respectively. |
The Company’s stock-based compensation cost for the thirteen weeks ended October 1, 2013 and September 30, 2014 was approximately $0.3 million and $0.6 million, respectively. The Company’s stock-based compensation costs for the thirty-nine weeks ended October 1, 2013 and September 30, 2014 was $1.4 million and $2.1 million, respectively. These costs are normally included in general and administrative expenses. For the thirteen weeks and thirty-nine weeks ended September 30, 2014, the Company recorded $0.2 million and $0.9 million, respectively, in stock based compensation costs as “Management transition and related reorganization expenses” as these costs are direct and incremental to the departure of certain members of management. Compensation cost for stock options and stock appreciation rights (“SARs”) granted is based on the fair value of each award, measured by applying the Black-Scholes model on the date of grant, using the following assumptions: |
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| | 13 weeks ended | | | 39 weeks ended |
| | October 1, | | | September 30, | | | October 1, | | September 30, |
2013 | 2014 | 2013 | 2014 |
Expected life of options and SARs from date of grant | | | 3.25 years | | | | 3.25 years | | | 3.25 - 6.0 years | | 2.75 - 6.0 years |
Risk-free interest rate | | | 0.64 | % | | | 0.97 | % | | 0.34% - 1.46% | | 0.69% - 1.84% |
Volatility | | | 30 | % | | | 29 | % | | 30% - 32% | | 28% - 29% |
Assumed dividend yield | | | 2.85 | % | | | 2.58 | % | | 2.85% - 3.48% | | 2.58% - 3.21% |
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Stock Option and SARs Activity |
Stock option and SARs transactions under all plans during the thirty-nine weeks ended September 30, 2014 were as follows: |
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| | Number of | | | Weighted | | | Weighted Average | |
Options | Average | Remaining Life |
and SARs | Exercise Price | (Years) |
Outstanding, December 31, 2013 | | | 1,214,424 | | | $ | 11.46 | | | | | |
Granted | | | 127,083 | | | | 14.55 | | | | | |
Exercised | | | (580,339 | ) | | | 10.86 | | | | | |
Forfeited/Cancelled | | | (89,587 | ) | | | 13.4 | | | | | |
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Outstanding, September 30, 2014 | | | 671,581 | | | $ | 12.31 | | | | 5.72 | |
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Exercisable and vested, September 30, 2014 | | | 419,747 | | | $ | 11.06 | | | | 4.36 | |
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The aggregate intrinsic value of stock options exercised during the thirty-nine weeks ended September 30, 2014 was $2.7 million. |
As of September 30, 2014, the Company had approximately $0.3 million of total unrecognized compensation cost related to stock option and SARs awards granted under its plans, which will be recognized over a weighted average period of 1.22 years. |
Restricted Stock Units |
Stock-based compensation cost for restricted stock units (“RSUs”) is measured based on the closing fair market value of the Company’s common stock on the date of grant. Transactions during the thirty-nine weeks ended September 30, 2014 were as follows: |
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| | Number of | | | Weighted Average | | | Aggregate | |
Shares | Grant Date | Intrinsic Value |
| Fair Value | |
Non-vested rights, December 31, 2013 | | | 156,356 | | | $ | 14.33 | | | | | |
Granted | | | 230,289 | | | | 14.68 | | | | | |
Vested | | | (116,189 | ) | | | 14.47 | | | | | |
Forfeited | | | (34,930 | ) | | | 14.19 | | | | | |
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Non-vested rights, September 30, 2014 | | | 235,526 | | | $ | 14.62 | | | $ | 4,748,204 | |
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On September 15, 2014, the Company granted performance share units (“PSUs”) with a grant date fair value of $250,000 to Frank C. Paci, its new President and Chief Executive Officer (“CEO”) (See Note 8). The PSUs cliff vest three years from the date of grant. The number of PSUs that actually vest will be determined based on the achievement of certain earnings per share thresholds set forth in the award agreement and may range from 0% to 150% of the target grant. PSUs that do not vest based on failure to satisfy the stated performance criteria are forfeited. In addition to the satisfaction of the performance requirement for the PSUs, vesting is dependent upon continued services with forfeiture of all unvested PSUs upon termination. The PSUs are settled in shares of common stock. The fair value of PSUs is based on the closing price of the Company’s common stock on the grant date. As of September 30, 2014, 17,883 PSUs, which are not yet vested, are subject to future financial conditions. The Company recognizes compensation costs for PSUs over the requisite service period when conditions for achievement become probable. |
As of September 30, 2014, the Company had approximately $2.3 million of total unrecognized compensation cost related to RSUs and PSUs, which will be recognized over a weighted average period of 1.73 years. |