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Long-Term Cash Incentive Plan
12 Months Ended
Dec. 31, 2012
Long-Term Cash Incentive Plan
Long-Term Cash Incentive Plan
On January 24, 2013, the Company’s Compensation, Nominating and Corporate Governance Committee (the “Committee”) approved a Long-Term Cash Incentive Plan Award (the “2013 LTIP”) to provide a long-term cash bonus opportunity to certain members of the Company’s management. The 2013 LTIP was approved by the Committee pursuant to the authority set forth in the Long Term Incentive Plan approved by the Board on May 15, 2007. The total cumulative payment for all participants (the “Eligible Payment”) is based upon certain performance conditions being met over a three year period ending December 31, 2015.
The Committee has responsibility for administering the 2013 LTIP and may use its reasonable discretion to adjust the performance criteria or Eligible Payments to take into account the impact of any major or unforeseen transaction or events. The Company’s executive officers are not participants in the 2013 LTIP. The Eligible Payment will be paid in cash upon completion of the Company’s annual audit for the 2015 fiscal year and upon satisfaction of the vesting conditions as outlined in the 2013 LTIP and, including employer costs, is currently estimated to be approximately $5.8 million.
On May 11, 2010, the Company’s Board of Directors approved a Long-Term Cash Incentive Plan (the “2010 LTIP”) to provide a long-term cash bonus opportunity to certain members of the Company’s management. Such Board approval was upon recommendation of the Committee. One participant in the 2010 LTIP was promoted to Chief Financial Officer in 2012. No other executive officers were participants in the 2010 LTIP. As of December 31, 2012 and 2011, the Company had accrued compensation expense and payroll benefits of approximately $2.6 million and $1.8 million, respectively, for the 2010 LTIP including approximately $0.8 million and $1.1 million in the years ended December 31, 2012 and 2011. On January 24, 2013, the Committee approved payments under the 2010 LTIP of approximately $2.3 million to the participants.
The Company is accounting for both LTIP awards in accordance with FASB ASC 718. The amount accrued for the 2010 LTIP reflected the Committee’s evaluation of the 2010 LTIP based on forecasts and other information presented to the Committee and were subject to performance in line with forecasts and final evaluation and determination by the Committee.