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Stock-Based Compensation
12 Months Ended
Dec. 31, 2012
Stock-Based Compensation [Abstract]  
Stock-Based Compensation
[11] Stock-Based Compensation
 
a) Tutor Perini Corporation Long-Term Incentive Plan

The Company is authorized to grant up to 6,900,000 stock-based compensation awards to key executives, employees and directors of the Company under the Tutor Perini Corporation Long-Term Incentive Plan (the "Plan"). The Plan allows stock-based compensation awards to be granted in a variety of forms, including stock options, stock appreciation rights, restricted stock awards, unrestricted stock awards, deferred stock awards and dividend equivalent rights. The terms and conditions of the awards granted are established by the Compensation Committee of the Company's Board of Directors who also administers the Plan.

A total of 434,399 shares of common stock are available for future grant under the Plan at December 31, 2012.

Restricted Stock Awards

Restricted stock awards generally vest subject to the satisfaction of service requirements or the satisfaction of both service requirements and achievement of certain performance targets. Upon vesting, each award is exchanged for one share of the Company's common stock. The grant date fair values of these awards are determined based on the closing price of the Company's common stock on either the award date (if subject only to service conditions), or the date that the Compensation Committee establishes the applicable performance target (if subject to performance conditions). The related compensation expense is amortized over the applicable requisite service period. As of December 31, 2012, the Compensation Committee has approved the grant of an aggregate of 4,875,833 restricted stock awards to eligible participants.

The restricted stock awards granted in 2012, 2011 and 2010 had weighted-average grant date fair values of $14.39, $19.03 and $20.44, respectively. The grant date fair value is determined based on the closing price of the Company's common stock on the date of grant.

The following table presents the compensation expense recognized related to the restricted stock awards which is included in general and administrative expenses in the Consolidated Statements of Operations:

   
Year ended December 31,
 
   
2012
  
2011
  
2010
 
   
(in millions)
 
Restricted Stock Compensation Expense
 $7.1  $5.7  $9.5 
Related Income Tax Benefit
 $1.5  $2.5  $3.6 

As of December 31, 2012, there was $4.8 million of unrecognized compensation expense related to the unvested restricted stock awards which, absent significant forfeitures in the future, is expected to be recognized over a weighted-average period of approximately 2.5 years.

During 2012, the Compensation Committee established the 2012 performance targets for 220,000 restricted stock units awarded in 2009 and 2010, and for 73,333 restricted stock units awarded in 2012. During 2012, the Compensation Committee approved the award of 783,333 new restricted stock units.

A summary of restricted stock awards activity during the year ended December 31, 2012 is as follows:

         
Aggregate
 
      
Weighted Average
  
Intrinsic
 
   
Number
  
Grant Date
  
Value
 
   
of Shares
  
Fair Value
  
(in thousands)
 
Total Granted and Unvested - January 1, 2012
  1,185,832  $19.65  $14,633 
Vested
  (208,332) $24.36  $2,627 
Granted
  293,333  $14.39  $4,019 
Forfeited
  (129,167) $13.60   - 
Total Granted and Unvested
  1,141,666  $18.12  $15,641 
Approved for grant
  888,335  
(a)
  $12,170 
Total Awarded and Unvested – December 31, 2012
  2,030,001  
n.a.
  $27,811 
 
(a)
Grant date fair value cannot be determined currently because the related performance targets for future years have not yet been established by the Compensation Committee.

The outstanding unvested restricted stock awards at December 31, 2012 are scheduled to vest as follows, subject where applicable to the achievement of performance targets. As described above, certain performance targets have not yet been established.

   
Number
 
Vesting Date
 
of Awards
 
     
2013
  896,666 
2014
  408,335 
2015
  150,000 
2016
  165,000 
2017
  410,000 
Total
  2,030,001 

Approximately 245,000 of the unvested restricted stock awards will vest based on the satisfaction of service requirements and 1,785,001 will vest based on the satisfaction of both service requirements and the achievement of pre-tax income performance targets.

Stock Options

Stock option awards generally vest subject to the satisfaction of service requirements or the satisfaction of both service requirements and achievement of certain performance targets. The grant date fair values of these awards are determined based on the Black-Scholes option price model on either the award date (if subject only to service conditions), or the date that the Compensation Committee establishes the applicable performance target (if subject to performance conditions). The related compensation expense is amortized over the applicable requisite service period. The exercise price of the options is equal to the closing price of the Company's common stock on the date the awards were approved by the Compensation Committee, and the awards expire ten years from the award date. As of December 31, 2012, the Compensation Committee has approved an aggregate of 2,365,465 stock option awards to eligible participants.

The stock option awards granted in 2012, 2011 and 2010 had weighted-average grant date fair values of $5.65, $9.31 and $9.79, respectively. The grant date fair value is determined based on the Black-Scholes option pricing model as discussed below.
 

The following table presents the compensation expense recognized related to stock option grants which is included in general and administrative expenses in the Consolidated Statements of Operations:

   
Year ended December 31,
 
   
2012
  
2011
  
2010
 
   
(in millions)
 
Stock Option Compensation Expense
 $2.4  $3.1  $3.3 
Related Income Tax Benefit
 $1.0  $1.3  $1.3 

As of December 31, 2012, there was $ 1.9 million of unrecognized compensation expense related to the outstanding stock option grants which, absent significant forfeitures in the future, is expected to be recognized over a weighted-average period of approximately 2.5 years.

During 2012, the Compensation Committee established the 2012 performance targets for 150,000 stock options awarded in 2009, and for 15,000 options awarded in 2012. During 2012, the Compensation Committee approved the award of 695,000 new stock options.

A summary of stock option activity during the year ended December 31, 2012 is as follows:

      
Weighted Average
 
   
Number
  
Grant Date
  
Exercise
 
   
of Shares
  
Value
  
Price
 
Total Granted and Outstanding - January 1, 2012
  1,225,465  $10.11  $18.45 
Granted
  165,000  $5.65  $19.51 
Forfeited
  (75,000) $7.20   - 
Total Granted and Outstanding
  1,315,465  $9.72  $18.91 
Approved for grant
  830,000  
(a)
  $12.80 
Total Awarded and Outstanding – December 31, 2012
  2,145,465  
n.a.
  $16.55 
              
(a) Grant date fair value cannot be determined currently because the related performance targets for future years have not yet been established by the Compensation Committee.

There were 490,465 options that have vested and were exercisable at December 31, 2012 at a weighted average exercise price of $19.79 per share.

Of the remaining options outstanding, approximately 592,500 will vest based on the satisfaction of service requirements and 1,062,500 will vest based on the satisfaction of both service requirements and the achievement of performance targets.

At December 31, 2012, the outstanding options of 1,315,465 had an intrinsic value of $0.4 million and a weighted-average remaining contractual life of 6.6 years.

The following table details the key assumptions used in estimating the grant date fair values of stock option awards granted during 2012, 2011 and 2010 based on the Black-Scholes option pricing model:

   
Grant dates established during
 
   
2012
  
2011
  
2010
 
Awarded during
 
2012
  
2009 (1)
  
2011
  
2011
  
2011
  
2009 (1)
  
2009 (1)
 
                       
Number of options
 15,000  150,000  140,000  30,000  40,465  150,000  150,000 
Risk-free interest rate
 1.12%  0.88%  1.13%  1.25%  0.89%  2.74%  2.65% 
Expected life of options (years)
 
7.3
  
4.4
  
6.0
  
6.5
  
5.0
  
6.5
  
5.7
 
Expected volatility of underlying stock
 50.59%  53.89%  49.86%  48.70%  51.62%  46.94%  48.38% 
Expected quarterly dividends (per share)
 -   -   -   -   -   -   - 
 
(1)
During 2009, the Compensation Committee approved the award of 750,000 stock options that vest in five equal annual installments from 2010 to 2014 subject to the achievement of pre-tax income performance targets established by the Compensation Committee. The Compensation Committee has established the performance targets for fiscal years 2010, 2011 and 2012, and these tranches were deemed granted for accounting purposes.
 
(b) Special Equity Incentive Plan
The Company was authorized to grant up to 3,000,000 non-qualified stock options to key executives, employees and directors of the Company under the Special Equity Incentive Plan (the "Special Equity Plan"). No options were granted under the Special Equity Plan in 2010. In accordance with its provisions, the Special Equity Plan terminated on May 25, 2010; however, it continued to govern any then outstanding unexercised and unexpired options. During 2010, 15,000 options were exercised with an intrinsic value of $0.2 million and a weighted average exercise price of $4.50 per share. As of December 31, 2010, there were no outstanding options under the Special Equity Plan.