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Stock-Based Compensation and Other Employee Benefit Plans
12 Months Ended
Dec. 31, 2014
Share-based Compensation [Abstract]  
Stock-Based Compensation and Other Employee Benefit Plans
Note 12 – Stock-Based Compensation and Other Employee Benefit Plans
The Company has stock-based compensation plans, under which stock options, restricted stock awards and restricted stock units are reserved for issuance. The MasTec, Inc. 2013 Incentive Plan (the “2013 Incentive Plan”), which became effective in May 2013, permits a total of approximately 7,391,000 shares of the Company’s common stock to be issued, including approximately 5,291,000 shares that remained available under prior plans that terminated upon adoption of the 2013 Incentive Plan. In addition, the Company has certain employee stock purchase plans under which shares of the Company’s common stock are available for purchase by eligible employees. The MasTec, Inc. Bargaining Units Employee Stock Purchase Plan (the “2013 Bargaining Units ESPP”), which became effective on July 1, 2013, permits the issuance of up to 1,000,000 new shares of MasTec, Inc. common stock to eligible employees. The MasTec, Inc. 2011 Employee Stock Purchase Plan (the “2011 ESPP” and, together with the 2013 Bargaining Units ESPP, the “ESPPs”) also provides for the issuance of up to 1,000,000 shares of MasTec, Inc. common stock for eligible employees. Under all stock-based compensation plans in effect as of December 31, 2014, there were approximately 5,513,000 shares available for future grant.
Restricted Shares
MasTec grants restricted stock awards and restricted stock units (together restricted shares), which are valued based on the closing share price of MasTec common stock on the date of grant. During the restriction period, holders of restricted stock awards are entitled to vote the shares. Total unearned compensation related to restricted shares as of December 31, 2014 was approximately $24.7 million, which is expected to be recognized over a weighted average period of approximately 2 years. The intrinsic value, or fair value, of restricted shares that vested, which is based on the market price on the date of vesting, totaled $17.5 million, $2.2 million and $7.3 million, respectively, for the years ended December 31, 2014, 2013 and 2012. During the year ended December 31, 2013, the Company entered into an agreement with the previous owners of EC Source Services, LLC (“EC Source”) to establish an incentive program for its employees and granted 350,000 restricted share awards, all of which vested on December 31, 2014. The former owners of EC Source contributed cash and shares of MasTec common stock to the Company in connection with this program.
Activity, restricted shares:
Restricted
Shares
 
Per Share
Weighted Average  
Grant Date
Fair Value
Non-vested restricted shares, as of December 31, 2012
782,281

 
$
19.10

Granted
431,346

 
31.04

Vested
(68,122
)
 
18.83

Canceled/forfeited
(21,960
)
 
14.93

Non-vested restricted shares, as of December 31, 2013
1,123,545

 
$
23.78

Granted
972,754

 
26.88

Vested
(659,212
)
 
25.27

Canceled/forfeited
(22,442
)
 
17.38

Non-vested restricted shares, as of December 31, 2014
1,414,645

 
$
25.32



Stock Options
The Company has granted options to purchase its common stock to employees and members of the Board of Directors and affiliates under various stock option plans at not less than the fair market value of the underlying stock on the date of grant. All outstanding stock options are fully vested.
Activity, stock options:
Stock 
Options
 
Per Share Weighted Average 
Exercise Price
 
Weighted Average
Remaining
Contractual Life
 (in years)
 
Aggregate Intrinsic
Value (a)  
(in millions)
Options outstanding and exercisable as of December 31, 2012
1,043,825

 
$
10.50

 
2.33
 
$
15.1

Exercised
(513,254
)
 
10.04

 
 
 
 
Canceled/forfeited
(35,000
)
 
7.74

 
 
 
 
Options outstanding and exercisable as of December 31, 2013
495,571

 
$
11.17

 
1.96
 
$
10.7

Exercised
(210,900
)
 
9.97

 
 
 
 
Canceled/forfeited

 
 
 
 
 
 
Options outstanding and exercisable as of December 31, 2014
284,671

 
$
12.06

 
1.29
 
$
3.0

(a)
Amount represents the difference between the exercise price and the closing share price of the Company’s stock on the last trading day of the corresponding period, multiplied by the number of in-the-money options.
The total intrinsic value of options exercised during the years ended December 31, 2014, 2013 and 2012, which is based on the difference between the exercise price and the closing share price of the Company’s stock as of the date of exercise, totaled $6.5 million, $10.6 million and $5.1 million, respectively. Proceeds from options exercised during the years ended December 31, 2014, 2013 and 2012 totaled $0.8 million, $3.9 million and $3.7 million, respectively.
Employee Stock Purchase Plans
The following table provides details pertaining to the Company’s ESPPs for the periods indicated:
 
For the Years Ended December 31,
 
2014
 
2013
 
2012
Cash proceeds (in millions)
$
3.3

 
$
6.4

 
$
1.3

Common shares issued
136,918

 
454,523

 
90,614

Weighted average price per share
$
24.33

 
$
14.19

 
$
14.37

Weighted average per share grant date fair value
$
5.81

 
$
5.60

 
$
4.19


Non-Cash Stock-Based Compensation Expense
Details of non-cash stock-based compensation expense and related tax benefits for the periods indicated were as follows (in millions):
 
For the Years Ended December 31,
 
2014
 
2013
 
2012
Non-cash stock-based compensation expense
$
15.9

 
$
12.9

 
$
4.4

Income Tax Effects:
 
 
 
 
 
Income tax benefit from non-cash stock-based compensation
$
8.7

 
$
9.7

 
$
2.5

Excess tax benefit from non-cash stock-based compensation (a)
$
3.7

 
$
4.3

 
$
0.8

(a)
Excess tax benefits, which represent cash flows from tax deductions in excess of the tax effect of compensation expense associated with exercised stock options and vested restricted shares, are classified as financing cash flows in the Company’s consolidated statements of cash flows.
401(k) Plan. MasTec has a 401(k) plan covering all eligible employees. Subject to certain dollar limits, eligible employees may contribute up to 75% of their pre-tax annual compensation to the 401(k) plan. The Company’s matching contribution is equal to 100% of the first 3% of the employee’s salary and 50% of the next 2% of the employee’s salary, up to a maximum 4% employer match. Discretionary matching contributions, which are payable 50% in shares of MasTec common stock and 50% in cash, were paid quarterly for the years ended December 31, 2014 and 2013 and annually for the year ended December 31, 2012. During the years ended December 31, 2014, 2013 and 2012, matching contributions totaled approximately $7.9 million, $5.9 million and $2.1 million, respectively.
Deferred Compensation Plan. MasTec offers a deferred compensation plan to its highly compensated employees. These employees are allowed to contribute a percentage of their pre-tax annual compensation to the deferred compensation plan. Deferred compensation plan assets of $6.1 million and related deferred compensation plan liabilities of $5.9 million associated with this plan were included within other long-term assets and other long-term liabilities, respectively, as of December 31, 2014. As of December 31, 2013, deferred compensation plan assets and related liabilities associated with this plan totaled $4.4 million and $4.3 million, respectively.