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Note 10 - Stock Based Compensation

12 Months Ended

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

(10) Stock Based Compensation

2009 Employee Stock Purchase Plan

The 2009 Employee Stock Purchase Plan (the “2009 ESPP”) allows for the issuance of 1,500,000 shares of our Class A common stock. The 2009 ESPP is intended to qualify as an “Employee Stock Purchase Plan” under Section 423 of the Internal Revenue Code of 1986, as amended, and is administered by the Compensation Committee of the Board of Directors.

Eligible employees are entitled to defer up to 10% of their base pay for the purchase of stock, up to $25,000 of fair market value of our Class A common stock annually. The purchase price is equal to 85% of the fair market value at the end of the purchase period. During 2013, a total of 77,005 shares were purchased under the 2009 ESPP at a weighted average price of $49.94 per share, which represented a weighted average discount from the fair market value of $8.81 per share. As of December 31, 2013, 604,288 shares remained available for purchase under the 2009 ESPP.

Compensation expense related to our 2009 ESPP is calculated based on the 15% discount from the per share market price on the date of grant.

2013 Stock Incentive Plan

Our 2013 Stock Incentive Plan, as amended, (the “2013 Plan”) allows for the granting of up to a total of 3.8 million nonqualified stock options and shares of restricted stock to our officers, key employees, directors and consultants. Our plan is administered by the Compensation Committee of the Board of Directors and permits accelerated vesting of outstanding awards upon the occurrence of certain changes in control. As of December 31, 2013, 1,573,080 shares of Class A common stock were available for future grants.

Restricted Stock Units (“RSUs”)

Restricted stock grants vest over a period up to six years from the date of grant. Restricted stock activity under our stock incentive plans was as follows:

	Non-vested stock grants			Weighted average grant date fair value
Balance, December 31, 2012		651,943		$	13.35
Granted		239,324			43.13
Vested		(185,462	)		7.97
Forfeited		(28,447	)		19.12
Balance, December 31, 2013		677,358		$	25.10

In 2013, we granted 77,736 time-vesting RSUs to members of our Board of Directors and employees. Each grant entitles the holder to receive shares of our Class A common stock upon vesting. A quarter of the RSUs vest on each of the four anniversaries of the grant date.

Certain key employees were granted 52,820 performance and time-vesting RSUs in 2013. The RSUs entitled the holder to receive shares based on attaining a target level of adjusted net income per share for 2013. The RSUs are subject to forfeiture, in whole or in part, based on 2013 minimum performance measures and continuation of employment. RSUs that are not forfeited vest over four years from the grant date. The table below summarizes the percentage of granted RSUs earned based on the attainment thresholds:

	Adjusted earnings per share attainment level		% of earned RSUs
Less than minimum	$0.00	or negative		0	%
Minimum	$0.01			30
Median	$3.21			60
Maximum	$3.53			100

The final attainment was calculated as 100% based on the 2013 adjusted net income per share of $4.02. We estimate a total compensation expense of $2.2 million associated with these performance and time-vesting RSUs, of which $0.5 million was recognized in 2013.

Eight senior executives were also granted 108,768 long-term RSUs which vest based on attaining a target level of adjusted net income per share in any fiscal year ending on December 31, 2013 through December 31, 2018, which meets or exceeds specified attainment thresholds. The table below summarizes the percentage of granted RSUs earned based on the attainment thresholds:

If more than one adjusted net income per share attainment threshold is met or exceeded that was not met or exceeded previously, the corresponding vesting percentages for each adjusted net income per share attainment threshold met or exceeded may be added together. Once the adjusted net income per share meets or exceeds any particular threshold and RSUs are vested accordingly, no additional RSUs may vest in connection with adjusted net income per share meeting or exceeding that particular threshold again. Any of these RSUs that do not vest within the six year period would be forfeited.

We estimate a total compensation expense of $4.7 million associated with these long-term RSUs. In 2013, the attainment level of $4.00 per share was achieved based on the 2013 adjusted net income per share of $4.02 and expense associated with the vesting of 33% of the award was recognized in the twelve month period ended December 31, 2013. We recognized $2.4 million in compensation expense associated with this grant in 2013.

Stock Options

Options become exercisable over a period of up to five years from the date of grant with expiration dates up to ten years from the date of grant and at exercise prices of not less than market value, as determined by the Board of Directors. Beginning in 2004, the expiration date of options granted was reduced to six years.

Option activity under our stock incentive plans was as follows:

	Shares subject to options			Weighted average exercise price		Aggregate intrinsic value (millions)		Weighted average remaining contractual term (years)
Balance, December 31, 2012		253,499		$	6.26
Granted		-			-
Forfeited		-			-
Expired		-			-
Exercised		(194,615	)		6.17
Balance, December 31, 2013		58,884		$	6.53	$	3.7		0.7
Exercisable, December 31, 2013		58,884		$	6.53	$	3.7		0.7

We estimate the fair value of stock options using the Black-Scholes valuation model. This valuation model takes into account the exercise price of the award, as well as a variety of significant assumptions. We believe that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of our stock options. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards.

Stock-Based Compensation

Compensation expense related to non-vested stock is based on the intrinsic value on the date of grant as if the stock is vested. We amortize stock-based compensation on a straight-line basis over the vesting period of the individual award with estimated forfeitures considered. Shares to be issued upon the exercise of stock options will come from newly issued shares.

As of December 31, 2013, unrecognized stock-based compensation related to outstanding, but unvested stock options and RSUs was $9.2 million, which will be recognized over the remaining weighted average vesting period of 1.9 years.

Certain information regarding our stock-based compensation was as follows:

Year Ended December 31,	2013		2012		2011
Weighted average grant-date fair value per share of stock options granted	$	-	$	-	$	-
Per share intrinsic value of non-vested stock granted		43.13		23.82		13.58
Weighted average per share discount for compensation expense recognized under the 2009 ESPP		8.81		4.29		2.56
Total intrinsic value of stock options exercised (millions)		8.7		7.2		1.5
Fair value of non-vested stock that vested during the period (millions)		8.4		3.5		0.7
Stock-based compensation recognized in results of operations, as a component of selling, general and administrative expense - excludes compensation expense related to an option granted to one of our executives. See Note 16. (millions)		6.6		3.1		2.3
Tax benefit recognized in Consolidated Statements of Operations (millions)		2.3		1.0		0.7
Cash received from options exercised and shares purchased under all share-based arrangements (millions)		5.2		8.8		5.8
Tax deduction realized related to stock options exercised (millions)		6.5		4.1		0.9

- 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+ Details

Adjusted fiscal earnings

per share

attainment level

% of earned RSUs