STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2015

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

6. STOCKHOLDERS’ EQUITY

Restricted Stock

The Company has two stock incentive plans:  a Long-Term Incentive Plan (the “LTIP”) and a Non-Employee Directors Restricted Stock Plan (the “Non-Employee Directors Plan”).

Under the LTIP, certain employees received awards of restricted shares of common stock based on service and performance.  The number of shares granted to each employee is based on the fair market value of a share of common stock on the date of grant.

The service-based restricted shares granted during 2012 vest ratably on the grant date and the first through fourth anniversaries of the grant date. The service-based restricted shares granted during 2014 vest ratably on the grant date and the first through third anniversaries of the grant date.
                                                 

On June 2, 2014 and December 18, 2014, performance-based shares were granted which vest over three years based upon the attainment of (i) a specified operating income margin during any one or more of the fiscal years in the period beginning January 1, 2015 and ending December 31, 2017 and (ii) the attainment of earnings before interest, taxes, depreciation and amortization targets during each of the fiscal years ended December 31, 2015 through 2017.  There is no vesting period on the right to vote or the right to receive dividends on any of the restricted shares.

On April 29, 2013, performance-based shares were granted which vest over four years based upon the attainment of (i) a specified operating income margin during any one or more of the fiscal years in the period beginning January 1, 2013 and ending December 31, 2016 and (ii) the attainment of earnings before interest, taxes, depreciation and amortization targets during each of the fiscal years ended December 31, 2013 through 2016.  There is no vesting period on the right to vote or the right to receive dividends on any of the restricted shares.

Pursuant to the Non-Employee Directors Plan, each non-employee director of the Company receives an annual award of restricted shares of common stock on the date of the Company’s annual meeting of shareholders.  The number of shares granted to each non-employee director is based on the fair market value of a share of common stock on that date.  The restricted shares vest on the first anniversary of the grant date; however, there is no vesting period on the right to vote or the right to receive dividends on these restricted shares.

For the nine months ended September 30, 2015 and 2014, the Company completed a net share settlement for 49,075 and 27,682 restricted shares, respectively, on behalf of certain employees that participate in the LTIP upon the vesting of the restricted shares pursuant to the terms of the LTIP.  The net share settlement was in connection with income taxes incurred on restricted shares that vested and were transferred to the employee during 2015 and/or 2014, creating taxable income for the employee.   At the employees’ request, the Company will pay these taxes on behalf of the employees in exchange for the employee’s return of an equivalent value of restricted shares to the Company.  These transactions resulted in a decrease of approximately $0.1 million for each of the nine months ended September 30, 2015 and 2014, respectively, to equity on the consolidated balance sheets as the cash payment of the taxes effectively was a repurchase of the restricted shares granted in previous years.

The following is a summary of transactions pertaining to restricted stock:

	Shares			Weighted Average Grant Date Fair Value Per Share
Nonvested restricted stock outstanding at December 31, 2014		925,819		$	5.04
Canceled		(340,940	)		5.00
Awards		234,651			2.28
Vested		(254,046	)		5.36
Nonvested restricted stock outstanding at September 30, 2015		565,484			3.77

The restricted stock expense for the three months ended September 30, 2015 and 2014 was $0.1 million and $0.8 million, respectively.  The restricted stock expense for the nine months ended September 30, 2015 and 2014 was $0.9 million and $2.4 million, respectively.  The unrecognized restricted stock expense as of September 30, 2015 and December 31, 2014 was $1.6 million and $4.5 million, respectively.  As of September 30, 2015, outstanding restricted shares under the LTIP had aggregate intrinsic value of $0.3 million.

Stock Options

The fair value of the stock options used to compute stock-based compensation is the estimated present value at the date of grant using the Black-Scholes option pricing model.  The following is a summary of transactions pertaining to stock options:

	Shares			Weighted Average  Exercise Price  Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value  (in thousands)
Outstanding at December 31, 2014		424,167		$	13.65	4.18 years	$	-
Canceled		(151,500	)		16.22			-
Outstanding at September 30, 2015		272,667			12.22	4.30 years		-
Vested or expected to vest		272,667			12.22	4.30 years		-
Exercisable as of September 30, 2015		272,667			12.22	4.30 years		-

As of September 30, 2015, there was no unrecognized pre-tax compensation expense.

The following table presents a summary of stock options outstanding:

	At September 30, 2015
	Stock Options Outstanding						Stock Options Exercisable
Range of Exercise Prices	Shares		Contractual Weighted Average Life (years)		Weighted Average Price		Shares		Weighted Average Exercise Price
$4.00-$13.99		192,667		4.69	$	9.39		192,667	$	9.39
$14.00-$19.99		49,000		2.40		18.02		49,000		18.02
$20.00-$25.00		31,000		4.85		20.62		31,000		20.62
		272,667		4.30		12.22		272,667		12.22