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Incentive Plan
3 Months Ended
Mar. 31, 2015
Incentive Plan [Abstract]  
Incentive Plan

8. Incentive Plan

During the three months ended March 31, 2015 and 2014, compensation expense related to share-based arrangements was approximately $4.0 million and $3.4 million, respectively. For compensation expense recognized during the three months ended March 31, 2015 and 2014, Basic recognized a tax benefit of approximately $1.4 million and $799,000, respectively.

 As of March 31, 2015, there was approximately $25.5 million of total unrecognized compensation related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 2.5 years. The total fair value of share-based awards vested during the three months ended March 31, 2015 and 2014 was approximately $4.8 million and $20.3 million, respectively. During the three months ended March 31, 2015 and 2014 there was no excess tax benefit due to the net operating loss carryforwards (“NOL”). If there was no NOL, there would have been no excess tax benefit at March 31, 2015 and there would have been an excess tax benefit of approximately $4.2 million at March 31, 2014.  

Stock Option Awards

The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. Options granted under the Plan expire 10 years from the date they are granted, and generally vest over a three- to five-year service period.

The following table reflects the summary of stock options outstanding at March 31, 2015 and the changes during the three months then ended:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

 

Remaining

 

Aggregate

 

 

Number of

 

Weighted

 

Contractual

 

Intrinsic

 

 

Options

 

Average

 

Term

 

Value

 

 

Granted

 

Exercise Price

 

(Years)

 

(000's)

Non-statutory stock options:

 

 

 

 

 

 

 

 

 

 

Outstanding, beginning of period

 

280,000 

 

$

19.05 

 

 

 

 

 

       Options granted

 

 —

 

 

 —

 

 

 

 

 

       Options forfeited

 

 —

 

 

 —

 

 

 

 

 

       Options exercised

 

(103,750)

 

 

6.98 

 

 

 

 

 

       Options expired

 

 —

 

 

 —

 

 

 

 

 

  Outstanding, end of period

 

176,250 

 

$

26.15 

 

1.08 

 

$

 —

  Exercisable, end of period

 

176,250 

 

$

26.15 

 

1.08 

 

$

 —

  Vested or expected to vest, end of period

 

176,250 

 

$

26.15 

 

1.08 

 

$

 —

 

The total intrinsic value of share options exercised during the three months ended March 31, 2015 and 2014 was approximately $37,000 and $1.4 million, respectively.

Cash received from share option exercises under the Plan was approximately $724,000 and $4.1 million for the three months ended March 31, 2015 and 2014, respectively. During the three months ended March 31, 2015 and 2014, there was no excess tax benefit due to the NOL. If there was no NOL, there would have been no excess tax benefit at March 31, 2015 and there would have been an excess tax benefit of approximately $265,000 at March 31, 2014.  

Basic has a history of issuing treasury and newly issued shares to satisfy share option exercises.

Restricted Stock Awards

 A summary of the status of Basic’s non-vested share grants at March 31, 2015 and changes during the three months ended March 31, 2015 is presented in the following table:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average

 

 

Number of

 

Grant Date Fair

Nonvested Shares

 

Shares

 

Value Per Share

Nonvested at beginning of period

 

2,193,671 

 

$

19.56 

Granted during period

 

724,501 

 

 

1.82 

Vested during period

 

(815,935)

 

 

16.88 

Forfeited during period

 

(4,083)

 

 

20.40 

Nonvested at end of period

 

2,098,154 

 

$

14.47 

 

Phantom Stock Awards

On March 18,  2015, the Compensation Committee of Basic’s Board of Directors approved grants of performance-based phantom stock awards to certain members of management. The performance-based phantom stock awards are tied to Basic’s achievement of total stockholder return (“TSR”) relative to the TSR of a peer group of energy services companies over the performance period (defined as the one-year calculation period starting on the 20th NYSE trading day prior to and including the last NYSE trading day of 2014 and ending on the last NYSE trading day of 2015). The number of phantom shares to be issued will range from 0% to 150% of the 704,089 target number of phantom shares, depending on the performance noted above. Any phantom shares earned at the end of the performance period will then remain subject to vesting in one-third increments on March 15, 2016, 2017 and 2018 (subject to accelerated vesting in certain circumstances). As of March 31, 2015, Basic estimated that 100% of the target number of performance-based awards will be earned.  The Compensation Committee also approved grants of phantom restricted stock awards to certain key employees. The number of phantom shares issued was 654,500. These grants remain subject to vesting over a three-year period, with the first portion vesting March 15, 2016.