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Restricted Stock Units and Long Term Incentive Plan
3 Months Ended
Mar. 31, 2013
Restricted Stock Units and Long Term Incentive Plan  
Restricted Stock Units and Long Term Incentive Plan

6. Restricted Stock Units and Long Term Incentive Plan

 

Restricted Stock Units

 

The Company recorded $71,000 and $46,000 of compensation expense associated with restricted stock units (“RSUs”) during the three months ended March 31, 2012 and 2013, respectively, which have been included in selling, general and administrative expense on the accompanying condensed consolidated statements of operations.

 

The closing price of a share of the Company’s Common Stock, which is used to calculate the year end RSU liability, was $1.85 and $2.05 on December 31, 2012, and March 31, 2013, respectively. As of December 31, 2012 and March 31, 2013, there was unrecognized compensation cost, related to non-vested RSUs granted to the Company’s directors, in the amount of $99,000 and $80,000, respectively, using the aforementioned stock prices. Actual compensation costs recognized in future periods may vary based upon fluctuations in stock price and forfeitures.

 

The Company issued cash settlements related to the RSUs of $0 during the three months ended March 31, 2012 and 2013, respectively.

 

Long Term Incentive Plan

 

In the first quarter of 2010, the Company entered Long Term Incentive Compensation Agreements (“LTI Agreements”) granting incentive compensation ranging from $25,000 to $536,000.  The 50% Employment Award vested and was settled in cash on August 31, 2012, in the amount of $1.2 million.  A portion of the Performance Award vested on December 31, 2012, and was settled during the first quarter of 2013 in the amount of $640,000; the remainder did not vest.

 

In the second quarter of 2011, the Company entered LTI Agreements granting incentive compensation ranging from $23,000 to $550,000.  The 50% Employment Award will vest on August 31, 2013, subject to continued employment, and be settled in cash within 30 days thereafter.  The 50% Performance Award will vest on December 31, 2013, subject to achieving financial performance criteria, and be settled in cash the later of 30 days thereafter or 15 days after the Company issues its audited financials for 2013, but by no later than March 15, 2014. All vesting is also subject to earlier pro rata settlement as provided in each LTI Agreement.

 

In the first quarter of 2012, the Company entered LTI Agreements granting incentive compensation ranging from $22,000 to $652,000.  The 50% Employment Award will vest on August 31, 2014, subject to continued employment, and be settled in cash within 30 days thereafter.  The 50% Performance Award will vest on December 31, 2014, subject to achieving financial performance criteria, and be settled in cash the later of 30 days thereafter or 15 days after the Company issues its audited financials for 2014, but by no later than March 15, 2015. All vesting is also subject to earlier pro rata settlement as provided in each LTI Agreement.

 

In the first quarter of 2013, the Company entered LTI Agreements granting incentive compensation ranging from $20,000 to $680,000.  The 40% Employment Award, subject to continued employment, and the 60% Performance Award, subject to achievement of the financial performance criteria, will vest on December 31, 2015, and be settled in cash the later of 30 days thereafter or 15 days after the Company issues its audited financials for 2015, but by no later than March 15, 2016. All vesting is also subject to earlier pro rata settlement as provided in each LTI Agreement.

 

During the third quarter of 2012, the Company entered LTI agreements granting incentive compensation in the amount of $20,000 to each independent director that will vest on August 16, 2013, subject to continued membership on the board and as achievement of the financial performance criteria for the 2012 fiscal year. On December 31, 2012, the performance criteria were achieved.  As each independent director must continue to perform service through August 16, 2013, as a condition of vesting, the Company has, and will continue, recognizing expense over the service period. All vesting is also subject to earlier pro rata settlement as provided in each LTI Agreement.

 

Additionally, the Company entered LTI agreements granting incentive compensation in the amount of $50,000 to each independent director that will vest on December 31, 2014, subject continued membership on the board and achievement of the financial, and be settled in cash the later of 30 days thereafter or 15 days after the Company issues its audited financials for 2014, but by no later than March 15, 2015. Finally, the Company entered LTI agreements granting incentive compensation in the amount of $50,000 to each independent director in March 2013 that will vest on December 31, 2015, subject to continued membership on the board and achievement of the financial performance criteria, and be settled in cash the later of 30 days thereafter or 15 days after the Company issues its audited financials for 2015, but by no later than March 15, 2016.  All vesting is also subject to earlier pro rata settlement as provided in each LTI Agreement.

 

Vesting of the 2011, 2012 and 2013 LTI Performance Awards will be determined in accordance with the Company performance criteria concerning adjusted EBITDA and cash flow and subject to earlier pro rata settlement as provided in each LTI Agreement.

 

In recognition of these LTI Agreements, the accompanying condensed consolidated statements of operations include $561,000 and $737,000 among selling, general and administrative expense for the three months ended March 31, 2012 and 2013, respectively. Additionally, the $3.6 million and $3.7 million liabilities for these LTI Agreements was included in accounts payable and accrued liabilities in the accompanying condensed consolidated balance sheets at December 31, 2012, and March 31, 2013, respectively.