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Stock-based Compensation: Incentive Award Plan and Employee Stock Purchase Plan | 12 Months Ended
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Dec. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-based Compensation: Incentive Award Plan and Employee Stock Purchase Plan | Stock-based Compensation: Incentive Award Plan and Employee Stock Purchase Plan. The Company believes that stock-based compensation better aligns the interests of its employees and directors with those of its stockholders versus exclusively providing cash-based compensation. Stock-based compensation provides incentives to retain and motivate executive officers and key employees responsible for driving Company performance and maintaining important relationships that contribute to the growth of the Company. Compensation expense charged to operations related to stock-based compensation, which totaled $14.1 million, $9.5 million, and $6.8 million for each of the years ended December 31, 2013, 2012 and 2011, respectively, is included in the Consolidated Statements of Operations and Comprehensive Income in SG&A expenses. The Company has recognized an income tax benefit of $5.1 million, $3.5 million, and $2.5 million for the years ended December 31, 2013, 2012 and 2011, respectively in the consolidated statements of operations for stock-based compensation arrangements. Effective June 3, 2010, stockholders of the Company approved the adoption of the On Assignment, Inc. 2010 Incentive Award Plan, as amended and restated in June 2013 (the "2010 Plan"), which replaced the Company’s Restated 1987 Stock Option Plan (the "1987 Plan"). The 2010 Plan permits the grant of stock options, including incentive stock options, nonqualified stock options, restricted stock awards, dividend equivalent rights, stock payments, deferred stock, restricted stock units ("RSUs"), performance shares and other incentive awards, stock appreciation rights and cash awards to its employees, directors and consultants. The 2010 Plan allows for stock option awards to be granted with an exercise price equal to the closing market price of the Company’s stock at the date of grant. Stock option awards generally vest over four years of continuous service with the Company and generally have ten-year contractual terms. RSUs generally vest over a three or four year continuous service period, though individual award vesting terms vary within these parameters. Certain stock option awards and RSUs provide for accelerated vesting in the event of a change in control (see Note 7). Options or awards that are canceled or forfeited are added back to the pool of shares available for issuance under the 2010 Plan. As of December 31, 2013, there were 3,726,322 shares available for issuance under the 2010 Plan. Effective May 15, 2012 (amended and restated as of December 13, 2012), the Board of Directors adopted the 2012 Employment Inducement Incentive Award Plan ("2012 Inducement Award Plan"). The 2012 Inducement Award Plan includes terms similar to the 2010 Plan and allows for grants of stock to employees as employment inducement awards pursuant to NYSE rules. The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model that incorporates assumptions disclosed in the table below. Expected volatility is based on historical volatility of the underlying stock for a period consistent with the expected lives of the stock options as the Company believes this is a reasonable representation of future volatility. Additionally, the Company analyzes historical stock option exercise behavior and vesting patterns for RSUs in order to estimate employee turnover rates (i.e. forfeiture rates). The forfeiture rate, set by management, is used to estimate the number of options and awards that will eventually vest and the associated impact on stock-based compensation expense. The expected life, or term, of options granted is derived from historical exercise behavior and represents the period of time that stock option awards are expected to be outstanding. The Company has selected a risk-free rate based on the implied yield available on U.S. Treasury Securities with a maturity equivalent to the options’ expected term. For RSUs, the Company records compensation expense based on the fair market value of the awards on the grant date. The preceding paragraphs describe the general terms of most stock-based incentive awards granted by the Company. However, the Company has granted a discrete set of stock-based awards to its Chief Executive Officer ("CEO") and other corporate officers that differ from those generally stated terms. The impact of these awards is reflected in the detailed disclosures below. All awards are subject to the officer’s continued employment through such vesting dates, however, the vesting of certain awards will accelerate upon the occurrence of a change in control of the Company and/or upon certain qualifying terminations of employment. CEO Awards On March 4, 2013, the CEO was awarded 143,182 RSUs with a grant date fair market value of $3.2 million. The award vests in three equal annual increments on January 4, 2014, January 4, 2015 and January 4, 2016, contingent upon the Company achieving certain performance objectives based on Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization of identifiable intangible assets, but excluding gains, losses or expenses associated with unusual items such as equity-based compensation expense, impairment charges and acquisition related costs) during 2013 and approved by the Compensation Committee. The Company granted discrete stock-based awards to its CEO as follows: (i) a market-based award in 2010 with a grant date fair market value of $0.5 million. The award was expensed over a service perio d of 2.6 years and the number of shares were determined by dividing $0.5 million by the closing price of the Company stock on February 1, 2013, contingent upon the achievement of defined market targets, which were met, (ii) a performance based award on March 8, 2011, which had a grant date fair market value of $1.0 million and was expensed over a service period of 9.9 months, the financial performance objectives were met by the Company during the 12-month period ending December 31, 2011, and 24,654 shares vested on December 31, 2012, and 16,772 shares vested on February 1, 2014, (iii) a performance based award on March 23, 2012, which had a grant date fair market value of $1.5 million and was expensed over a service period of 9.3 months, the performance objectives were met by the Company during the 12-month period ending December 31, 2012 and 24,654 shares vested on December 31, 2012, 16,772 shares vested on February 1, 2014 and the remaining number of shares will be determined by dividing $0.5 million by the closing price of the Company’s stock on February 1, 2015, and (i v) a performance-based award on March 4, 2013, which had a grant date fair market value of $1.0 million and was expensed over a service period of 10.1 months, the performance objectives were met by the Company during the 12-month period ending December 31, 2013, with 16,233 shares vesting on February 1, 2014 and the remaining number of shares will be determined by dividing $0.5 million by the closing price of the Company’s stock on February 1, 2015. The Company classifies these awards as liab ility awards until the number of shares is determined. The liability of $2.5 million related to these awards is included in other accrued expenses and other long-term liabilities in the accompanying Consolidated Balance Sheets as of December 31, 2013. On December 31, 2012, the CEO was awarded 39,448 RSUs with a grant date fair market value of $0.8 million, contingent upon the Company meeting certain financial performance objectives based on adjusted EBITDA approved by the Compensation Committee over the 12-month period ending December 31, 2013 and continued employment through January 1, 2014. On March 5, 2012, the CEO was awarded 45,372 performance-based RSUs with a grant date fair market value of $0.6 million, of which 22,686 shares vested on December 31, 2012 and 22,686 shares vested on January 4, 2014. On March 8, 2011, the CEO was awarded 58,754 performance-based RSUs with a grant date fair market value of $0.6 million, of which 29,377 shares vested on January 1, 2012 and 29,377 shares vested on December 31, 2012. On March 17, 2010, the CEO was granted 67,568 performance-based RSUs, with a grant-date fair value of $0.5 million, of which 33,784 shares vested on February 1, 2011 and 33,784 shares vested on February 1, 2012. On November 4, 2009, the Company entered into an employment agreement with the CEO that provided for three annual stock award grants with grant-date values of $0.8 million each, based on performance objectives for 2010 through 2012 that vested on February 1, 2011, January 1, 2012, and December 31, 2012, respectively. The grant-date fair value of the awards are expensed over the vesting term, based on an estimate of the percentage achievement of the applicable performance targets. All awards were subject to the CEO’s continued employment through applicable vesting dates. All awards may vest on an accelerated basis in part or in full upon the occurrence of certain events. Other Executive Officer Awards The Company records stock-based compensation expense over the vesting period of the awards based on the probability that the performance objectives will be met and that the executives will maintain their employment through the respective vesting dates. On March 4, 2013 the Company granted performance-based RSUs to certain other executive officers with an aggregate grant-date fair value of $1.0 million, which vested on January 2, 2014, as certain performance objectives were obtained and certified by the Compensation Committee. On June 1, 2013, the Company granted performance-based RSUs to certain executive officers. The aggregate grant-date fair value of these grants was $0.1 million, which vested on January 2, 2014, as certain performance objectives were obtained and certified by the Compensation Committee. On June 21, 2013, the Company granted performance-based RSUs to certain executive officers with an aggregate grant-date fair value of $0.3 million, which will vest on May 31, 2014, subject to continued employment, attaining certain performance objectives and certification by the Compensation Committee. On March 5, 2012, the Company granted performance-based RSUs to certain executive officers with an aggregate grant-date fair value of $0.8 million, which vested on December 31, 2012, as certain performance objectives were attained and certified by the Compensation Committee. On May 15, 2012, the Company granted performance-based RSUs to certain executive officers in conjunction with the acquisition of Apex. The aggregate grant-date fair value of these grants was $0.2 million, a portion of which vested on May 31, 2013, based on the percentage achievement of certain performance objectives and certified by the Compensation Committee. On March 8, 2011, the Company granted performance-based RSUs to certain executive officers with an aggregate grant-date fair value of $0.7 million, which vested on January 3, 2012, as certain performance objectives were attained and certified by the Compensation Committee. Stock Options The following table displays the weighted average assumptions that have been applied to estimate the fair value of stock option awards on the date of grant. During 2013, the Company did not grant any stock option awards.
|  | Year Ended December 31,
|  | 2012 |  | 2011
Dividend yield |  | — |  |  | — |
Risk-free interest rate |  | 1.19 | % |  | 0.92 | %
Expected volatility |  | 64.15 | % |  | 75.67 | %
Expected lives |  | 7.3 years |  |  | 3.6 years |
The following summarizes pricing and term information for options outstanding as of December 31, 2013:
|  | Options Outstanding |  |  | Options Exercisable |
|  |  |  |  |  | Number Outstanding at |  | Weighted Average Remaining Contractual Life (years) |  | Weighted Average Exercise Price |  | Number Exercisable at |  | Weighted Average Exercise Price
Range of Exercise Prices |  | December 31, 2013 |  |  |  | December 31, 2013 |
$ | 4.44 |  |  | ─ |  | $ | 8.26 |  |  | 255,250 |  |  | 4.8 |  |  | $ | 6.62 |  |  |  | 214,351 |  |  |  | $ | 6.34 |  |
8.38 |  |  | ─ |  | 11.39 |  |  | 272,121 |  |  | 5.1 |  |  | 10.90 |  |  |  | 196,831 |  |  |  | 11.08 |  |
11.56 |  |  | ─ |  | 12.90 |  |  | 213,724 |  |  | 3.1 |  |  | 12.39 |  |  |  | 213,724 |  |  |  | 12.39 |  |
13.31 |  |  | ─ |  | 13.58 |  |  | 43,850 |  |  | 3.3 |  |  | 13.32 |  |  |  | 43,006 |  |  |  | 13.31 |  |
16.51 |  |  | ─ |  | 16.51 |  |  | 75,000 |  |  | 8.7 |  |  | 16.51 |  |  |  | 23,437 |  |  |  | 16.51 |  |
$ | 4.44 |  |  | ─ |  | $ | 16.51 |  |  | 859,945 |  |  | 4.8 |  |  | $ | 10.61 |  |  |  | 691,349 |  |  |  | $ | 10.34 |  |
The following table is a summary of stock option activity under the Plan as of December 31, 2013 and changes for the year then ended:
|  | Incentive Stock Options |  | Non- Qualified Stock Options |  | Weighted Average Exercise Price Per Share |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value
Outstanding at January 1, 2013 |  | 129,423 |  | 1,156,937 |  | $ | 9.83 |  |  |  | 5.6 |  |  | $ | 13,442,000 |
Exercised |  | (59,806) |  | (333,377) |  | $ | 8.13 |  |  |  |  |  |  |  |
Canceled |  | (201) |  | (33,031) |  | $ | 9.65 |  |  |  |  |  |  |  |
Outstanding at December 31, 2013 |  | 69,416 |  | 790,529 |  | $ | 10.61 |  |  |  | 4.8 |  |  | $ | 20,903,000 |
Vested and Expected to Vest at December 31, 2013 |  | 69,416 |  | 772,942 |  | $ | 10.56 |  |  |  | 4.7 |  |  | $ | 20,521,000 |
Exercisable at December 31, 2013 |  | 69,386 |  | 621,963 |  | $ | 10.34 |  |  |  | 4.0 |  |  | $ | 16,995,000 |
There were no non-employee director stock options outstanding during the year ended December 31, 2013. The weighted-average grant-date fair value of options granted during the years ended December 31, 2012 and 2011 was $10.34, and $5.04 per option, respectively. The total intrinsic value of options exercised during the years ended December 31, 2013, 2012 and 2011 was $7.6 million, $9.7 million, and $1.3 million. As of December 31, 2013 there was unrecognized compensation expense of $0.9 million related to unvested stock options based on options that are expected to vest. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 1.97 years. Restricted Stock Units and Restricted Stock Awards A summary of the status of the Company’s unvested RSUs as of December 31, 2013 and changes during the year then ended are presented below:
|  | Restricted Stock Units / Awards |  | Weighted Average Grant-Date Fair Value Per Unit / Award
Unvested RSUs outstanding at January 1, 2013 |  | 1,390,834 |  |  |  | $ | 14.31 |  |
Granted |  | 621,262 |  |  |  | 26.77 |  |
Market value share count adjustment for liability awards |  | (55,664 | ) |  |  | 34.92 |  |
Vested |  | (538,525 | ) |  |  | 14.76 |  |
Forfeited |  | (50,669 | ) |  |  | 15.75 |  |
Unvested RSUs outstanding at December 31, 2013 |  | 1,367,238 |  |  |  | $ | 18.90 |  |
Unvested and expected to vest RSUs outstanding at December 31, 2013 |  | 1,201,190 |  |  |  | $ | 19.12 |  |
The number of shares vested in the table above includes 168,954 shares surrendered by the employees to the Company for payment of minimum tax withholding obligations. Shares of stock withheld for purposes of satisfying minimum tax withholding obligations are again available for issuance under the Plan. The table above includes 59,942 performance-based RSU grants to certain Apex employees on May 15, 2013. The awards vest, if the performance objective is attained, in 12 equal installments beginning on April 1, 2014 and on each quarterly anniversary thereafter, subject to continued employment through each vesting date. Additionally, the table above includes 26,064 RSUs that were awarded to non-employee directors on August 1, 2013, of which 13,032 shares vested immediately upon issuance and the remaining shares will vest on August 1, 2014. The weighted average grant-date fair value of these awards was $30.69. There was unrecognized compensation expense of $212,391 as of December 31, 2013 related to these RSUs that will be recorded over the remaining term of seven months. The weighted-average grant-date fair value of RSUs granted during the years ended December 31, 2013, 2012 and 2011 was $26.17, $16.01 and $9.18 per award, respectively. The total intrinsic value of RSUs vested during the years ended December 31, 2013, 2012 and 2011 was $15.0 million, $13.7 million and $6.4 million, respectively. As of December 31, 2013, there was unrecognized compensation expense of $15.5 million related to unvested RSUs based on awards that are expected to vest. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 2.0 years. Employee Stock Purchase Plan Effective June 3, 2010, the date of stockholder approval of the On Assignment 2010 Employee Stock Purchase Plan (the ESPP), the Company reinstated the employee stock purchase program for issuance of up to 3,500,000 shares of common stock with the first offering periods. The ESPP allows eligible employees to purchase common stock of the Company, through payroll deductions, at 85 percent of the lower of the market price on the first day or the last day of semi-annual purchase periods. The ESPP is intended to qualify as an “employee stock purchase plan” under IRS Code Section 423. Eligible employees may contribute up to a certain percentage set by the plan administrator of their eligible earnings toward the purchase of the stock (subject to certain IRS limitations). In accordance with the ESPP, shares of common stock are transferred to participating employees at the conclusion of each six month enrollment period, which now end on the last business day of the month in March and September each year. The Company issued 203,200, 154,934, and 187,036 shares of common stock in 2013, 2012, and 2011 respectively, under the ESPP. Compensation expense of shares purchased under the ESPP is measured based on a Black-Scholes option-pricing model. The model accounts for the discount from market value and applies an expected life in line with each six month purchase period. The weighted average fair value of stock purchased under the ESPP was $7.16, $3.53, and $2.10 for the years ended December 31, 2013, 2012, and 2011, respectively. The stock-based compensation expense related to the ESPP was $1.2 million in 2013, $0.8 million in 2012 and $0.4 million in 2011.

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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 Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: 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 6: 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 7: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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