Incentive, Retirement and Deferred Compensation Plans

Annual Incentive Plan. In June 2013, the Compensation Committee of the Company’s Board (the “Compensation Committee”) approved an annual incentive plan effective June 2013 for all employees and discontinued the Company’s then existing cash bonus program with final payments under the program of approximately $10.9 million made in July 2013. For certain members of management, the annual incentive plan incorporates objective performance criteria, individual performance goals and competitive target award levels for the 2014 performance year with payout percentages ranging from 0% to 200% of specified target levels based on actual performance. As of December 31, 2014, the Company had accrued approximately $21.1 million for the 2014 annual incentive for all employees, including an accrual for an annual incentive for specified members of management based on actual performance compared to target levels specified in the annual incentive plan.

Performance Units. The Company periodically grants performance units to certain members of senior management under the Company’s existing long-term incentive plan which vest over a performance period of approximately three years with cash settlement, if any, occurring at the end of the performance period. The value, and ultimate cash settlement, of the performance units is determined based upon the Company’s total shareholder return relative to that of a predetermined peer group over a specific performance period. If performance exceeds established minimum thresholds, cash settlement could range from $50 to $200 per unit. If minimum target thresholds are not met, the cash settlement is reduced to zero.

The performance units are valued for accounting purposes using a Monte Carlo simulation based on certain assumptions, including (i) a volatility assumption based on the historical realized price volatility of the Company’s common stock and the common stock of the predetermined peer group and (ii) a risk-free interest rate based on the U.S. Treasury bond yields for a term commensurate with the approximate remaining vesting period for each grant. As of December 31, 2014 and 2013, the Company’s liability associated with performance units totaled $0.7 million and $1.8 million, respectively, which represents the fair value of the performance units for which requisite service has been completed. The liability will continue to be adjusted in future periods based upon changes in fair value of the performance units and the portion of requisite service completed. The following table presents a summary of the fair value of the performance units and the related assumptions for all outstanding units as of December 31, 2014 and 2013.



	December 31,
	2014						2013
Expected price volatility range	26.6	%	-	86.6		%	27.0	%	-	44.8		%
Weighted-average risk-free interest rate				0.5		%				0.4		%
Weighted-average fair value per unit				$	13.85					$	97.06

Performance unit activity for the years ended December 31, 2014 and 2013 was as follows:



	December 31,
	2014		2013
Outstanding at January 1	31,142		—
Granted	47,015		31,142
Forfeited /canceled	(12,060	)	—
Outstanding at December 31	66,097		31,142

Performance period ending December 31, 2015
Vested	9,208		12,178
Unvested	18,874		18,964
Performance period ending December 31, 2016
Vested	12,671		—
Unvested	25,344		—

For the years ended December 31, 2014 and 2013, the Company recognized equity compensation expense of $(1.0) million and $1.6 million, respectively, net of amounts capitalized of $(0.05) million and $0.2 million, respectively, related to performance units. Based upon the fair value per unit as of December 31, 2014, the total fair value of the performance units that vested during the year ended December 31, 2014 and 2013 was $0.3 million and $0.1 million, respectively. No payments for performance units were made in the years ended December 31, 2014 and 2013. As of December 31, 2014, there was approximately $0.3 million of unrecognized compensation cost related to unvested performance units, which is expected to be recognized over a weighted average period of 1.6 years.

In addition to performance units, the Company’s incentive plan permits cash incentive awards as well as the grant of stock options, stock appreciation rights, restricted stock units and any other form of award based on the value (or the increase in value) of shares of the common stock of the Company.

Deferred Compensation Plans. The Company maintains a 401(k) retirement plan for its employees. Under the plan, eligible employees may elect to defer a portion of their earnings up to the maximum allowed by regulations promulgated by the Internal Revenue Service (“IRS”). The Company made matching contributions to the plan through cash purchases of Company stock equal to 100% on the first 10% employee deferred wages for the year ended December 31, 2014 and 100% on the first 15% of employee deferred wages for the years ended December 31, 2013 and 2012. Retirement plan expense for the years ended December 31, 2014, 2013 and 2012 was approximately $8.7 million, $11.0 million and $11.4 million, respectively.

The Company maintains a non-qualified deferred compensation plan that allows eligible highly compensated employees to elect to defer income exceeding the IRS annual limitations on qualified 401(k) retirement plans. The Company made matching contributions on non-qualified contributions up to a maximum of 10% of employee compensation for the year ended December 31, 2014 and 15% of employee compensation for the years ended December 31, 2013 and 2012. For the years ended December 31, 2014, 2013 and 2012, employer contributions of cash purchases of Company stock were approximately $2.0 million, $2.7 million and $3.5 million, respectively. Any assets placed in trust by the Company to fund future obligations of the Company’s non-qualified deferred compensation plan are subject to the claims of creditors in the event of insolvency or bankruptcy, and participants are general creditors of the Company as to their own deferred compensation in, and the Company’s contributions to, the plan.