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Compensation Plans | 12 Months Ended
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Dec. 31, 2013
Compensation Plans |
Compensation Plans | (16) Compensation Plans Stock Based Compensation On May 11, 2006, the Company's stockholders approved the 2006 Performance Incentive Plan, as amended and restated (the "2006 Incentive Plan"). The 2006 Incentive Plan provides for the granting of stock-based compensation, including stock options, restricted stock and performance restricted stock units to officers, employees and directors in connection with their employment with or services provided to the Company. On April 23, 2009, the Company's stockholders amended the 2006 Incentive Plan. As a result of the amendment, the maximum number of shares reserved for awards under the 2006 Incentive Plan, as amended, is 23.2 million shares. The maximum number of shares available for future awards under the 2006 Incentive Plan is 5.6 million shares at December 31, 2013, of which approximately 3.7 million shares may be issued as restricted stock and performance restricted stock units. Stock Options Stock options are granted with an exercise price per share equal to the closing market price of the company's common stock on the grant date. Stock options generally vest ratably over a four- to five-year period and have a 10-year contractual term. Vesting of certain options may accelerate, as provided in the 2006 Incentive Plan or in the applicable award agreement, upon retirement, a change in control or other specified events. Upon the exercise of options, the participant is required to pay the exercise price of the options being exercised and the related tax withholding obligation. Participants have the ability to elect to have the Company withhold the number of shares to be delivered upon exercise of stock options to pay the related exercise price and tax withholding obligation. The value of the shares withheld is dependent upon the closing market price of the Company's common stock on the date that the relevant transaction occurs. A summary of the stock option activity in 2013 is presented in the following table (dollars and shares in thousands, except per share amounts):
|  | Shares Under Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value |
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
Outstanding as of January 1, 2013 |  |  | 3,127 |  | $ | 31.16 |  |  | 6.9 |  | $ | 43,774 |
Granted |  |  | 499 |  |  | 46.92 |  |  |  |  |  |  |
Exercised |  |  | (1,300 | ) |  | 29.17 |  |  |  |  |  |  |
Forfeited |  |  | (104 | ) |  | 33.29 |  |  |  |  |  |  |
Outstanding as of December 31, 2013 |  |  | 2,222 |  |  | 35.77 |  |  | 5.0 |  |  | 8,870 |
Exercisable as of December 31, 2013 |  |  | 1,281 |  |  | 35.64 |  |  | 3.3 |  |  | 4,924 |
The following table summarizes additional information concerning outstanding and exercisable stock options at December 31, 2013 (shares in thousands):
|  |  |  |  |  | Weighted Average Remaining Contractual Term (Years) |  | Currently Exercisable |
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
|  |  |  | Weighted Average Exercise Price |
Range of Exercise Price |  | Shares Under Options |  | Shares Under Options |  | Weighted Average Exercise Price |
$23.34 - $25.52 |  |  | 456 |  | $ | 23.34 |  |  | 4.1 |  |  | 262 |  | $ | 23.34 |
27.11 - 28.35 |  |  | 342 |  |  | 28.35 |  |  | 4.8 |  |  | 162 |  |  | 28.35 |
31.95 - 46.92 |  |  | 1,424 |  |  | 41.53 |  |  | 5.3 |  |  | 857 |  |  | 40.78 |
|  |  | 2,222 |  |  | 35.77 |  |  | 5.0 |  |  | 1,281 |  |  | 35.64 |
The following table summarizes additional information concerning unvested stock options at December 31, 2013 (shares in thousands):
|  | Shares Under Options |  | Weighted Average Grant Date Fair Value |
--- | --- | --- | --- | --- | ---
Unvested at January 1, 2013 |  |  | 2,588 |  | $ | 4.30 |
Granted |  |  | 499 |  |  | 5.89 |
Vested |  |  | (2,042 | ) |  | 4.30 |
Forfeited |  |  | (104 | ) |  | 4.75 |
Unvested at December 31, 2013 |  |  | 941 |  |  | 5.09 |
The weighted average fair value per share at the date of grant for options awarded during the years ended December 31, 2013, 2012 and 2011 was $5.89, $6.34 and $5.97, respectively. The total vesting date intrinsic value (at vesting) of shares under options vested during the years ended December 31, 2013, 2012 and 2011 was $12 million, $18 million and $16 million, respectively. The total intrinsic value of vested shares under options at December 31, 2013 was $5 million. Proceeds received from options exercised under the 2006 Incentive Plan for the years ended December 31, 2013, 2012 and 2011 were $18 million, $52 million and $31 million, respectively. The total intrinsic value (at exercise) of options exercised during the years ended December 31, 2013, 2012 and 2011 was $25 million, $51 million and $13 million, respectively. The fair value of the stock options granted during the years ended December 31, 2013, 2012 and 2011 was estimated on the date of grant using a Black-Scholes option valuation model that uses the assumptions described below. The risk-free rate is based on the U.S. Treasury yield curve in effect at the grant date. The expected life (estimated period of time outstanding) of the stock options granted was estimated using the historical exercise behavior of employees and turnover rates. For stock options granted in 2013, 2012 and 2011, the expected volatility was based on the average of the Company's: (i) historical volatility of the adjusted closing prices of its common stock for a period equal to the stock option's expected life, ending on the grant date, calculated on a weekly basis and (ii) the implied volatility of traded options on its common stock for a period equal to 30 days ending on the grant date. For stock options granted prior to 2010, the expected volatility was based on the Company's historical volatility of the adjusted closing prices of its common stock for a period equal to the stock option's expected life, ending on the grant date and calculated on a weekly basis. The following table summarizes the Company's stock option valuation assumptions used with respect to stock options awarded in 2013, 2012 and 2011:
|  | 2013 |  | 2012 |  | 2011 |
--- | --- | --- | --- | --- | --- | --- | ---
Risk-free rate |  |  | 0.78 | % |  | 1.09 | % |  | 2.58 | %
Expected life (in years) |  |  | 4.5 |  |  | 5.9 |  |  | 6.5 |
Expected volatility |  |  | 28.9 | % |  | 32.7 | % |  | 31.8 | %
Expected dividend yield |  |  | 5.8 | % |  | 5.9 | % |  | 6.1 | %
Restricted Stock and Performance Restricted Stock Units Under the 2006 Incentive Plan, restricted stock and performance restricted stock units generally have a contractual life or vest over a three- to five-year period. The vesting of certain restricted shares and units may accelerate, as provided in the 2006 Incentive Plan or in the applicable award agreement, upon retirement, a change in control or other specified events. When vested, each performance restricted stock unit is convertible into one share of common stock. The restricted stock and performance restricted stock units are valued on the grant date based on the closing market price of the Company's common stock on that date. Generally, the Company recognizes the fair value of the awards over the applicable vesting period as compensation expense. Upon any exercise or payment of restricted shares or units, the participant is required to pay the related tax withholding obligation. Participants generally have the flexibility to elect to have the Company reduce the number of shares to be delivered to pay the related tax withholding obligation. The value of the shares withheld is dependent on the closing market price of the Company's common stock on the date that the relevant transaction occurs. During 2013, 2012 and 2011, the Company withheld 242,000, 361,000 and 136,000 shares, respectively, to offset tax withholding obligations with respect to the restricted stock and restricted stock unit awards. The following table summarizes additional information concerning restricted stock and restricted stock units at December 31, 2013 (units and shares in thousands):
|  | Restricted Stock Units |  | Weighted Average Grant Date Fair Value |  | Restricted Shares |  | Weighted Average Grant Date Fair Value |
--- | --- | --- | --- | --- | --- | --- | --- | --- | ---
Unvested at January 1, 2013 |  |  | 1,220 |  | $ | 35.16 |  |  | 145 |  | $ | 27.24 |
Granted |  |  | 502 |  |  | 45.96 |  |  | 144 |  |  | 41.77 |
Vested |  |  | (471 | ) |  | 36.58 |  |  | (43 | ) |  | 31.65 |
Forfeited |  |  | (43 | ) |  | 41.79 |  |  | (20 | ) |  | 26.84 |
Unvested at December 31, 2013 |  |  | 1,208 |  |  | 38.82 |  |  | 226 |  |  | 35.70 |
At December 31, 2013, the weighted average remaining vesting period of restricted stock units and restricted stock was two years. The total fair values (at vesting) of restricted stock and restricted stock units which vested for the years ended December 31, 2013, 2012 and 2011 were $22 million, $39 million and $14 million, respectively. As the Company pays dividends on its outstanding common stock, holders of restricted stock awards are generally entitled to any dividends on the underlying restricted shares, and holders of restricted stock units generally have the right to a cash payment equal to the dividends that would be paid on a number of shares of Company common stock equal to the number of outstanding units subject to the award. On August 14, 2006, the Company granted 219,000 restricted stock units to the Company's former Chairman and Chief Executive Officer. The restricted stock units vest over a period of 10 years beginning in 2012, subject to accelerated vesting in certain circumstances as provided in the applicable award agreement and the Company's employment agreement with its former Chief Executive Officer. Each vested unit will be convertible, upon payment of the award, into one share of common stock. Additionally, as the Company pays dividends on its outstanding common stock, the original award will be credited with additional restricted stock units as dividend equivalents (in lieu of receiving a cash payment). Generally, the dividend equivalent restricted stock units will be subject to the same vesting and other conditions as applied to the grant. The Company's Board of Directors terminated its former Chairman, Chief Executive Officer and President on October 2, 2013. As a result of the termination, general and administrative expenses for the year ended December 31, 2013 include charges of $27 million related to: (i) the acceleration of $17 million of deferred compensation for restricted stock units and options that vested upon termination; and (ii) severance payments and other costs of approximately $10 million. In 2012, the Company implemented a clawback policy that is retroactive to prior years pursuant to which its Board of Directors or Compensation Committee shall, in such circumstances as they determine to be appropriate, require reimbursement or cancellation of all or a portion of any short or long-term cash or equity incentive awards or payments to an officer (or former officer, as the case may be) of the Company where: (1) the amount of, or number of shares included in, any such payment or award was determined based on the achievement of financial results that were subsequently the subject of an accounting restatement due to noncompliance with any financial reporting requirement under the securities laws; and (2) a lesser payment or award of cash or shares would have been made to the individual based upon the restated financial results; and (3) the payment or award of cash or shares was received by the individual prior to or during the 12-month period following the first public issuance or filing of the financial results that were subsequently restated. Total share-based compensation expense recognized during the years ended December 31, 2013, 2012 and 2011 was $40 million, $23 million and $20 million, respectively. As of December 31, 2013, there was $28 million of deferred compensation cost associated with future employee services, related to unvested share-based compensation arrangements granted under the Company's incentive plans, which is expected to be recognized over a weighted average period of three years. Employee Benefit Plan The Company maintains a 401(k) and profit sharing plan that allows for eligible participants to defer compensation, subject to certain limitations imposed by the Code. The Company provides a matching contribution of up to 4% of each participant's eligible compensation. During 2013, 2012 and 2011, the Company's matching contributions were approximately $0.8 million for each year.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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