Equity Transactions and Stock-Based Compensation Plans

Equity Transactions

In May 2012, we filed a registration statement that permits us to sell equity or debt in one or more offerings up to a total dollar amount of $300 million. As of December 31, 2014, the entire $300 million under the shelf registration statement is available for equity or debt offerings. In the future, we may consider equity or debt offerings, as appropriate, to meet our liquidity needs.

Stock-based Compensation Plans

We have stock-based award plans that are administered by the Compensation Committee of our Board of Directors, which selects persons eligible to receive awards and determines the number of stock options, restricted stock, or restricted stock units subject to each award and the terms, conditions and other provisions of the awards. At December 31, 2014, the total shares available for future grants to employees and directors under existing plans were 2,303,381, of which no more than 1,669,117 may be granted in the form of restricted stock or restricted stock unit awards.

We grant stock option and restricted stock awards with vesting based on time of service conditions. We also grant restricted stock unit awards with vesting based on time of service conditions, and in certain cases, subject to performance and market conditions. We recognize compensation cost for stock option, restricted stock and restricted stock unit awards based on the fair value estimated in accordance with ASC Topic 718, Compensation—Stock Compensation. For our awards with graded vesting, we recognize compensation expense on a straight-line basis over the service period for each separately vesting portion of the award as if the award was, in substance, multiple awards.

The following table summarizes the compensation expense recognized for stock option, restricted stock and restricted stock unit awards during the years ended December 31, 2014, 2013 and 2012 (amounts in thousands):



	Year ended December 31,
	2014		2013		2012
Stock option awards	$	1,275	$	1,771	$	2,962
Restricted stock awards	548		576		628
Restricted stock unit awards	5,794		4,024		3,729
	$	7,617	$	6,371	$	7,319

Stock Options

We grant stock option awards which generally become exercisable over a three-year period and expire ten years after the date of grant. Our stock-based compensation plans require that all stock option awards have an exercise price that is not less than the fair market value of our common stock on the date of grant. We issue shares of our common stock when vested stock option awards are exercised.

We estimate the fair value of each option grant on the date of grant using a Black-Scholes option pricing model. The following table summarizes the assumptions used in the Black-Scholes option pricing model based on a weighted-average calculation for the years ended December 31, 2014, 2013 and 2012:



	Year ended December 31,
	2014		2013		2012
Expected volatility	66	%	66	%	70	%
Risk-free interest rates	1.7	%	1.0	%	0.8	%
Expected life in years	5.49		5.53		5.12
Grant-date fair value	$4.87		$4.36		$5.02

The assumptions used in the Black-Scholes option pricing model are based on multiple factors, including historical exercise patterns of homogeneous groups with respect to exercise and post-vesting employment termination behaviors, expected future exercising patterns for these same homogeneous groups and volatility of our stock price. As we have not declared dividends since we became a public company, we did not use a dividend yield. In each case, the actual value that will be realized, if any, will depend on the future performance of our common stock and overall stock market conditions. There is no assurance the value an optionee actually realizes will be at or near the value we have estimated using the Black-Scholes options-pricing model.

The following table represents stock option activity from December 31, 2012 through December 31, 2014:



	Number of Shares	Weighted-Average Exercise Price Per Share	Weighted-Average Remaining Contract Life in Years
Outstanding stock options as of December 31, 2012	5,649,991	$10.09
Granted	220,656	7.58
Forfeited	(67,500)	16.02
Exercised	(270,934)	4.67
Outstanding stock options as of December 31, 2013	5,532,213	$10.18
Granted	221,440	8.44
Forfeited	(155,100)	14.82
Exercised	(928,777)	9.01
Outstanding stock options as of December 31, 2014	4,669,776	$10.18	4.7
Stock options exercisable as of December 31, 2014	4,124,506	$10.42	4.2

At December 31, 2014, the aggregate intrinsic value of stock options outstanding was $1.4 million and the aggregate intrinsic value of stock options exercisable was $1.4 million. Intrinsic value is the difference between the exercise price of a stock option and the closing market price of our common stock, which was $5.54 on December 31, 2014.

The following table summarizes our nonvested stock option activity from December 31, 2012 through December 31, 2014:



	Number of Shares	Weighted-Average Grant-Date Fair Value Per Share
Nonvested stock options as of December 31, 2012	1,130,844	$4.89
Granted	220,656	4.36
Vested	(594,459)	4.88
Nonvested stock options as of December 31, 2013	757,041	$4.74
Granted	221,440	4.87
Vested	(433,211)	4.77
Nonvested stock options as of December 31, 2014	545,270	$4.77

At December 31, 2014, there was $0.6 million of unrecognized compensation cost relating to stock options which is expected to be recognized over a weighted-average period of 0.6 years.

In January 2015, our Board of Directors approved the grant of stock options representing 338,638 shares of common stock to officers and employees that will vest over a three-year period.

Restricted Stock

Historically, we have generally granted restricted stock awards that vest over a three-year period with a fair value based on the closing price of our common stock on the date of the grant. However, beginning in 2013, we began granting restricted stock awards with a vesting period of one year. When restricted stock awards are granted, or when restricted stock unit awards are converted to restricted stock, shares of our common stock are considered issued, but subject to certain restrictions.

The following table summarizes our restricted stock activity from December 31, 2012 through December 31, 2014:



	Number of Shares	Weighted-Average Grant-Date Fair Value per Share
Nonvested restricted stock as of December 31, 2012	142,820	$8.67
Granted	61,248	7.51
Vested	(98,864)	8.47
Nonvested restricted stock as of December 31, 2013	105,204	$8.18
Granted	32,100	14.33
Vested	(88,620)	8.20
Nonvested restricted stock as of December 31, 2014	48,684	$12.20

At December 31, 2014, there was $0.2 million of unrecognized compensation cost relating to restricted stock awards which is expected to be recognized over a weighted-average period of 0.4 years.

Restricted Stock Units

We grant restricted stock unit awards with vesting based on time of service conditions only (“time-based RSUs”), and we grant restricted stock unit awards with vesting based on time of service, which are also subject to performance and market conditions (“performance-based RSUs”). Shares of our common stock are issued to recipients of restricted stock units only when they have satisfied the applicable vesting conditions.

Our time-based RSUs generally vest over a three-year period, with fair values based on the closing price of our common stock on the date of grant.

Our performance-based RSUs generally cliff vest after 39 months from the date of grant and are granted at a target number of issuable shares, for which the final number of shares of common stock is adjusted based on our actual achievement levels that are measured against predetermined performance conditions. The number of shares of common stock awarded will be based upon the Company’s achievement in certain performance conditions, as compared to a predefined peer group, over the performance period, generally three years.

Approximately one-third of the performance-based RSUs granted during 2011, 2012 and 2013, and half of the performance-based RSUs granted during 2014, are subject to a market condition based on total shareholder return, and therefore the fair value of these awards is measured using a Monte Carlo simulation model. Compensation expense for awards with a market condition is reduced only for estimated forfeitures; no adjustment to expense is otherwise made, regardless of the number of shares issued. The remaining performance-based RSUs are subject to performance conditions, based on EBITDA and return on capital employed, and therefore the fair value is based on the closing price of our common stock on the date of grant, applied to the estimated number of shares that will be awarded. Compensation expense ultimately recognized for awards with performance conditions will be equal to the fair value of the restricted stock unit award based on the actual outcome of the service and performance conditions.

In April 2014, we determined that 116.6% of the target number of shares granted during 2011 were actually earned based on the Company’s achievement of certain performance measures, as compared to the predefined peer group, over the performance period from January 1, 2011 through December 31, 2013, resulting in an additional 22,091 shares being issued. The performance-based RSUs granted during 2011 vested and were converted to common stock at the end of April 2014.

As of December 31, 2014, we estimated that our actual achievement level for the performance-based RSUs granted during 2012, 2013 and 2014 will be approximately 117%, 100% and 110% of the predetermined performance conditions, respectively. Therefore, the outstanding 861,812 restricted stock units would be adjusted to represent 922,845 shares of our common stock if these achievement levels are maintained through the applicable performance periods.

The following table summarizes our restricted stock unit activity from December 31, 2012 through December 31, 2014:



	Time-Based Award		Performance-Based Award
	Number of Time-Based Award Units	Weighted-Average Grant-Date Fair Value per Unit	Number of Performance-Based Award Units		Weighted-Average Grant-Date Fair Value per Unit
Nonvested restricted stock units as of December 31, 2012	531,526	$9.16	355,051		$9.99
Granted	406,027	7.59	346,731		8.34
Vested	(254,629)	9.82	—		—
Forfeited	(55,212)	8.60	(28,020)		8.81
Nonvested restricted stock units as of December 31, 2013	627,712	$7.93	673,762		$9.19
Granted	360,665	8.64	400,503		9.67
Achieved performance adjustment	—	—	22,091		10.23
Vested	(267,430)	8.16	(155,647	)	10.23
Forfeited	(45,868)	8.07	(78,897	)	9.30
Nonvested restricted stock units as of December 31, 2014	675,079	$8.21	861,812		$9.24

At December 31, 2014, there was $5.0 million of unrecognized compensation cost relating to restricted stock unit awards which is expected to be recognized over a weighted-average period of 1.1 years.

In January 2015, our Board of Directors approved the grant of restricted stock units representing 581,192 shares of common stock to officers and employees that will vest over a three-year period.