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SHARE-BASED BENEFIT PLANS
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Dec. 31, 2014
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| Share-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHARE-BASED BENEFIT PLANS |
13. SHARE-BASED BENEFIT PLANS
Compensation Cost. We recognized stock compensation expense of $0.5 million and $0.6 million for the years ended December 31, 2014 and 2013, respectively. Share-based compensation expense is included in selling, general and administrative expense. Costs associated with accelerating the vesting of shares associated with the termination of Mr. Hilliou’s and Mr. Miller’s employment is included in board and executive transition costs. As of December 31, 2014, there was approximately $0.5 million of total unrecognized compensation cost related to unvested stock options granted by the Company. This unrecognized compensation cost is expected to be recognized over a weighted-average period of 4 years.
The fair value of the stock option grants was $0.5 million, with a weighted-average value of $1.25 per share, and an amortization period of 4 years.
Restricted Stock. Restricted stock is valued at the closing price of our stock without discount on the date issuance is approved. On June 1, 2011, our compensation committee approved the issuance of 660,000 shares ($3.88 per share), 600,000 vested on June 1, 2013 with the remaining as follows: 20,001 vested on June 1, 2012; 20,001 vested on June 1, 2013; and 19,998 vested on June 1, 2014.
On January 15, 2013, our compensation committee approved the issuance of 50,000 additional shares of restricted stock ($3.22 per share) vesting over three years as follows: 16,667 on January 15, 2014; 16,667 on January 15, 2015; and 16,666 on January 15, 2016.
On June 5, 2013, our compensation committee approved the issuance of 15,000 additional shares of restricted stock ($2.86 per share) vesting over three years as follows: 5,000 on June 1, 2014; 5,000 on June 1, 2015; and 5,000 on June 1, 2016.
On January 1, 2014, our compensation committee approved the issuance of 120,000 additional shares (60,000 each to Messrs. Hilliou and Miller, respectively) of restricted stock ($2.78 per share) vesting over two years as follows: 60,000 on January 1, 2015 and 60,000 on January 1, 2016.
As discussed in Note 9, in conjunction with the Settlement Agreement on November 28, 2014, the remaining 163,333 shares of unvested restricted stock vested as of such date. There are 11,000 shares of common stock available for future issuance under the Company’s Amended and Restated 2006 Incentive Compensation Plan (the “2006 Plan”), which expires on January 1, 2016.
Vesting is contingent upon certain conditions, including continuous service of the individual recipients. Unvested stock grants made in connection with our 2006 Plan are viewed as a series of individual awards and the related share-based compensation expense is amortized into compensation expense on a straight-line basis as services are provided over the vesting period, and reported as a reduction of stockholders’ equity.
The following table summarizes our restricted stock activity relative to share-based compensation for 2014 and 2013:
Stock Options. On November 28, 2014, the Company entered into an Employment Agreement with Mr. Lee pursuant to which Mr. Lee serves as the Company’s Chief Executive Officer. In connection with entering into the Employment Agreement, we granted Mr. Lee nonqualified stock options, outside of the 2006 Plan, covering 943,834 shares of Company common stock, with a per share exercise price equal to the closing price per share on the grant date. There were insufficient shares available for grant under the 2006 Plan. The stock options qualify as an “employee inducement award” and will vest with respect to 25% of the shares on November 28, 2015, and will continue to vest with respect to an additional 1/48th of the shares on each monthly anniversary thereafter, subject to Mr. Lee’s continued service through the applicable vesting date. The stock options will vest in full on a change in control of the Company. The Company intends to file a registration statement on SEC Form S-8 to register the shares issuable upon exercise of the nonqualified stock options. As of December 31, 2014, all of Mr. Lee’s stock options remain outstanding. There were no stock options granted in the year ended December 31, 2013.
Upon Mr. Lee’s termination of employment due to death or disability, he (or his estate) will be entitled to accelerated vesting of all outstanding stock options held on the termination date with respect to such number of shares underlying each stock option that would have vested over the one-year period immediately following the termination date had the stock options continued to vest in accordance with its term. If Mr. Lee’s employment is terminated by the Company without “cause” or by Mr. Lee for “good reason” (each, as defined in the Employment Agreement), then Mr. Lee will be entitled to receive full accelerated vesting of all outstanding Company stock options held on the termination dates.
The following table summarizes information related to our common stock options awarded to Mr. Lee on November 28, 2014, all of which remain unvested as of December 31, 2014:
The aggregate intrinsic value of options outstanding was $0.2 million at December 31, 2014, and there was no aggregate intrinsic value of options exercisable at December 31, 2014. The aggregate intrinsic value represents the total pre-tax intrinsic value that would have been realized by the option holders had all option holders exercised their options on the applicable date. The intrinsic value of a stock option is the excess of our closing stock price on that date over the exercise price, multiplied by the number of in-the-money options.
We estimated the fair value of each stock option award on the grant date using the Black-Scholes valuation model incorporating the assumptions noted in the following table. Option valuation models require the input of highly subjective assumptions, and changes in assumptions used can materially affect the fair value estimate. Option valuation assumptions for options granted during the year ended December 31, 2014 were as follows:
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