Deferred Compensation Agreements and Stock-Based Compensation
|
12 Months Ended |
---|---|
Dec. 31, 2013
|
|
Deferred Compensation Agreements and Stock-Based Compensation | |
Deferred Compensation Agreements and Stock-Based Compensation | Note 19—Deferred Compensation Agreements and Stock-Based Compensation
Primoris Long-Term Retention Plan — The Company adopted a long-term incentive plan for certain senior managers and executives. The voluntary plan provides for the deferral of one half of the participant’s annual earned bonus for one year. Except in the case of death, disability or involuntary separation from service, the deferred compensation is vested to the participant only if actively employed by the Company on the payment date of bonus amounts the following year. The amount of compensation deferred under this plan is calculated each year. Total deferred compensation liability under this plan as of December 31, 2013 and 2012 was $4,984 and $4,298, respectively.
Participants in the long term incentive plan may elect to purchase Company common stock at a discounted amount. For bonuses earned in 2013 and 2012, the participants could purchase up to one sixth of their bonus amount, calculated as 75% of the average market closing prices in December 2013 and 2012, respectively. The 25% discount is treated as compensation to the participant.
JCG Stakeholder Incentive Plan — In December 2013 and 2012, JCG maintained a deferred compensation plan for senior management employees. The plan provided for annual vesting over a five-year period. Once vested and upon a triggering event, such as termination, death or disability, the deferred benefit amount plus interest is paid in equal monthly installments over three years. The amount of compensation deferred under the plan is calculated each year. Total deferred compensation liability under this plan at December 31, 2013 and 2012 was $1,755 and $1,737, respectively.
Stock-based compensation — In July 2008, the shareholders approved and the Company adopted the Primoris Services Corporation 2008 Long-term Incentive Equity Plan, which was replaced by the Primoris Services Corporation 2013 Long-term Incentive Equity Plan (“Equity Plan”), after approval by the shareholders and adoption by the Company on May 3, 2013.
As part of the quarterly compensation of the non-employee members of the Board of Directors, the Company issued 21,590 shares of common stock during 2013 and 27,675 shares of common stock during 2012 under the Equity Plan. The shares were fully vested upon issuance and have a one-year trading restriction.
On May 3, 2013, the Board of Directors granted 100,000 Restricted Stock Units (“Units”) under the Equity Plan. Commencing annually on May 10, 2014 and ending April 30, 2017, the Units will vest in four equal installments for services provided, subject to earlier acceleration, termination, cancellation or forfeiture as provided in the underlying Primoris Restricted Stock Unit agreement (“RSU Award Agreement”). Each Unit represents the right to receive one share of the Company’s common stock when vested.
Under guidance of ASC Topic 718 “Compensation — Stock Compensation”, stock-based compensation cost is measured at the date of grant (utilizing the prior-day closing price), based on the calculated fair value of the stock-based award, and is recognized as expense over the employee’s requisite service period (generally the vesting period of the award).
The fair value of the Units was based on the closing market price of our common stock on the day prior to the date of the grant, or $21.98 per Unit. Stock compensation expense for the Units is being amortized using the straight-line method over the service period. For the year ended December 31, 2013 the Company recognized $366 in compensation expense. At December 31, 2013, approximately $1.83 million of unrecognized compensation expense remains for the Units which will be recognized over the next 3.3 years through April 30, 2017.
Vested Units accrue “Dividend Equivalents” (as defined in the Equity Plan) which will be accrued as additional Units. At December 31, 2013, there were no accrued Dividend Equivalent Units.
|