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Stock Based Compensation | 9 Months Ended
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Sep. 30, 2013
Stock-Based Compensation [Abstract] |
Stock-Based Compensation | Note 2 – Stock-Based Compensation The Benchmark Electronics, Inc. 2000 Stock Awards Plan (the 2000 Plan) and the Benchmark Electronics, Inc. 2010 Omnibus Incentive Compensation Plan (the 2010 Plan) authorize the Company, upon recommendation of the compensation committee of the Board of Directors, to grant a variety of types of awards, including stock options, restricted shares, restricted stock units, stock appreciation rights, performance compensation awards, phantom stock awards and deferred share units, or any combination thereof, to any director, officer, employee or consultant (including any prospective director, officer, employee or consultant) of the Company. Stock options are granted to employees with an exercise price equal to the market price of the Company's common shares on the date of grant, generally vest over a four-year period from the date of grant and have a term of ten years. Restricted shares, restricted stock units and phantom stock awards granted to employees generally vest over a four-year period from the date of grant, subject to the continued employment of the employee by the Company. The 2000 Plan expired on February 16, 2010 and no additional grants can be made under that plan. The 2010 Plan was approved by the Company's shareholders on May 18, 2010. Members of the Board of Directors who are not employees of the Company hold awards under the Benchmark Electronics, Inc. 2002 Stock Option Plan for Non-Employee Directors (the 2002 Plan). Stock options were granted pursuant to the 2002 Plan upon the occurrence of the non-employee director's election or re-election to the Board of Directors. All awards under the 2002 Plan were fully vested upon the date of grant and have a term of ten years. The 2002 Plan was approved by the Company's shareholders on May 14, 2002 and expired February 26, 2012. No additional grants may be made under the 2002 Plan. Non-employee directors are currently eligible to receive equity awards under the 2010 Plan. Beginning in 2011, awards under the 2010 Plan to non-employee directors were in the form of restricted stock units, which vest in equal quarterly installments over a one-year period, starting from the grant date. As of September 30, 2013, 2.2 million additional common shares are available for issuance under the Company's existing plans. All share-based payments to employees, including grants of employee stock options, are recognized in the financial statements based on their fair values. The total compensation cost recognized for stock-based awards was $1.9 million and $5.3 million for the three and nine months ended September 30, 2013 respectively, and $1.7 million and $4.7 million for the three and nine months ended September 30, 2012, respectively. The total income tax benefit recognized in the income statement for stock-based awards was $0.6 million and $1.5 million for the three and nine months ended September 30, 2013, respectively, and $0.8 million and $1.6 million for the three and nine months ended September 30, 2012, respectively. The compensation expense for stock-based awards includes an estimate for forfeitures and is recognized over the vesting period of the awards using the straight-line method. Cash flows from the tax benefits resulting from tax deductions in excess of the compensation cost recognized for stock-based awards (excess tax benefits) are classified as cash flows from financing activities. Awards of restricted shares, restricted stock units, performance based restricted stock units and phantom stock are valued at the closing market price of the Company's common shares on the date of grant. For performance based restricted stock unit awards, compensation expense is based on the probability that the performance goals will be achieved, which is monitored by management throughout the requisite service period. If it becomes probable, based on the Company's expectation of performance during the measurement period, that more or less than the previous estimate of the awarded shares will vest, an adjustment to stock-based compensation expense will be recognized as a change in accounting estimate. As of September 30, 2013, the unrecognized compensation cost and remaining weighted-average amortization related to stock-based awards are as follows:
|  |  |  |  |  |  | Phantom |  | Performance
|  |  |  |  |  |  | Stock and |  | Based
|  |  |  |  |  |  | Restricted |  | Restricted
|  | Stock |  | Restricted |  | Stock |  | Stock
(in thousands) |  | Options |  |  | Shares |  |  | Units |  |  | Units(1)
Unrecognized compensation cost | $ | 4,433 |  | $ | 2,611 |  | $ | 4,512 |  | $ | 1,842
Remaining weighted-average |  |  |  |  |  |  |  |  |  |  |
amortization period | 1.7 years |  | 1.8 years |  | 2.9 years |  | 2.5 years
(1) Based on the probable achievement of the performance goals identified in each award.
The Company did not issue any stock options during the three months ended September 30, 2013. During the nine months ended September 30, 2013, the Company issued 348 thousand stock options. The Company issued 1 thousand and 431 thousand stock options during the three and nine months ended September 30, 2012, respectively. The weighted-average assumptions used to value the options granted during the three and nine months ended September 30, 2013 and 2012, were as follows:
|  |  | Three Months Ended |  | Nine Months Ended
|  |  | September 30, |  | September 30,
|  |  | 2013 |  | 2012 |  | 2013 |  | 2012
Expected term of options |  |  | N/A |  | 6.0 years |  | 7.4 years |  | 6.3 years
Expected volatility |  |  | N/A |  | 42% |  | 42% |  | 42%
Risk-free interest rate |  |  | N/A |  | 1.114% |  | 1.396% |  | 1.305%
Dividend yield |  |  | N/A |  | zero |  | zero |  | zero
The expected term of the options represents the estimated period of time until exercise and is based on historical experience, giving consideration to the contractual terms, vesting schedules and expectations of future plan participant behavior. Separate groups of plan participants that have similar historical exercise behavior are considered separately for valuation purposes. Expected stock price volatility is based on the historical volatility of the Company's common shares. The risk-free interest rate is based on the U.S. Treasury zero-coupon rates in effect at the time of grant with an equivalent remaining term. The dividend yield reflects that the Company has not paid any cash dividends since inception and does not anticipate paying cash dividends in the foreseeable future. The weighted-average fair value per option granted during the nine months ended September 30, 2013 was $7.87. The total cash received as a result of stock option exercises for the nine months ended September 30, 2013 and 2012 was approximately $10.4 million and $3.5 million, respectively. The actual tax benefit realized as a result of stock option exercises and the vesting of other share-based awards during the nine months ended September 30, 2013 and 2012 was $1.8 million and $0.9 million, respectively. For the nine months ended September 30, 2013 and 2012, the total intrinsic value of stock options exercised was $2.9 million and $1.2 million, respectively. The Company issued performance based restricted stock unit awards to employees during the nine months ended September 30, 2013 and 2012. The number of performance based restricted stock unit awards that will ultimately be earned will not be determined until the end of the performance periods, which are December 31, 2015 and 2016, and may vary from as low as zero to as high as three times the target number depending on the level of achievement of certain performance goals. The level of achievement of these goals is based upon the audited financial results of the Company for the last full calendar year within the performance period (the years ending December 31, 2015 and 2016). The performance goals consist of certain levels of achievement using the following financial metrics: revenue growth, operating income margin expansion, and return on invested capital. If the performance goals are not met based on the Company's financial results, the applicable performance based restricted stock unit awards will not vest and will be forfeited.
The following table summarizes the activities relating to the Company’s stock options:
|  |  |  |  |  |  | Weighted- |  |
|  |  |  |  | Weighted- |  | Average |  |
|  |  |  |  | Average |  | Remaining |  | Aggregate
|  | Number of |  |  | Exercise |  | Contractual |  | Intrinsic
(in thousands, except per share data) |  | Options |  |  | Price |  | Term (Years) |  | Value
Outstanding as of December 31, 2012 |  | 4,240 |  | $ | 19.88 |  |  |  |
Granted |  | 348 |  | $ | 17.37 |  |  |  |
Exercised |  | (666) |  | $ | 15.61 |  |  |  |
Forfeited or expired |  | (213) |  | $ | 20.03 |  |  |  |
Outstanding as of September 30, 2013 |  | 3,709 |  | $ | 20.40 |  | 4.44 | $ | 11,883
Exercisable as of September 30, 2013 |  | 2,879 |  | $ | 21.31 |  | 3.30 | $ | 7,200
The aggregate intrinsic value in the table above is before income taxes and is calculated as the
difference between the exercise price of the underlying options and the Company’s closing stock
price as of the last business day of the period ended September 30, 2013 for options that had
exercise prices that were below the closing price.
The following table summarizes the activities related to the Company’s restricted shares:
|  |  |  |  | Weighted-
|  |  |  |  | Average
|  |  |  |  | Grant Date
(in thousands, except per share data) |  | Shares |  |  | Fair Value
Non-vested shares outstanding as of December 31, 2012 |  | 340 |  | $ | 16.81
Vested |  | (80) |  | $ | 16.89
Forfeited |  | (38) |  | $ | 16.35
Non-vested shares outstanding as of September 30, 2013 |  | 222 |  | $ | 16.86
The following table summarizes the activities related to the Company’s time based restricted
stock units and phantom stock awards:
|  |  |  |  | Weighted-
|  |  |  |  | Average
|  |  |  |  | Grant Date
(in thousands, except per share data) |  | Shares |  |  | Fair Value
Non-vested shares outstanding as of December 31, 2012 |  | 103 |  | $ | 16.70
Granted |  | 271 |  | $ | 17.54
Vested |  | (51) |  | $ | 16.47
Forfeited |  | (7) |  | $ | 17.31
Non-vested shares outstanding as of September 30, 2013 |  | 316 |  | $ | 17.45
The following table summarizes the activities related to the Company’s performance based
restricted stock unit awards: |  |  |  |  |
|  |  |  |  | Weighted-
|  |  |  |  | Average
|  |  |  |  | Grant Date
(in thousands, except per share data) |  | Shares |  |  | Fair Value
Non-vested shares outstanding as of December 31, 2012 |  | 164 |  | $ | 16.39
Granted(1) |  | 76 |  | $ | 17.37
Forfeited |  | (25) |  | $ | 16.03
Non-vested shares outstanding as of September 30, 2013 |  | 215 |  | $ | 16.78
(1)Represents target number of shares that can vest based on the achievement of the
performance goals. |  |  |  |  |

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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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