Note 8 — Employee Benefit Plans

Defined Contribution Plan

We sponsor a defined contribution 401(k) retirement plan covering substantially all of our employees. Our contributions are in the form of cash and, prior to 2014, consisted of a 50% match of each employee’s contribution up to 5% of the employee’s salary. Beginning in 2014, our matching contributions increased to 75% of the first 5% of the employee’s salary. For the years ended December 31, 2014, 2013 and 2012, our costs related to the 401(k) plan totaled $2.2 million, $1.7 million and $1.6 million, respectively.

Employee Stock Purchase Plan

We have an employee stock purchase plan (the “ESPP”). The ESPP has 1.5 million shares authorized for issuance, of which 1.2 million shares were available for issuance as of December 31, 2014. Eligible employees who participate in the ESPP may purchase shares of our common stock through payroll deductions on an after-tax basis over a four-month period beginning on January 1, May 1, and September 1 of each year during the term of the ESPP, subject to certain restrictions and limitations established by the Compensation Committee of our Board of Directors and Section 423 of the Internal Revenue Code. The per share price of common stock purchased under the ESPP is equal to 85% of the lesser of (i) its fair market value on the first trading day of the purchase period or (ii) its fair market value on the last trading day of the purchase period. The total value of the ESPP awards is calculated using the component approach where each award is computed as the sum of 15% of a share of non-vested stock, a call option on 85% of a share of non-vested stock, and a put option on 15% of a share of non-vested stock. For the years ended December 31, 2014 and 2013, share-based compensation expense with respect to the ESPP was $1.0 million and $0.8 million, respectively.

Long-Term Incentive Stock-Based Plan

We currently have one active long-term incentive stock-based plan, the 2005 Long-Term Incentive Plan, as amended and restated effective May 9, 2012 (the “2005 Incentive Plan”). In May 2012, the shareholders approved an amendment to and restatement of the 2005 Incentive Plan to: (i) authorize 4.3 million additional shares for issuance pursuant to our equity incentive compensation strategy, (ii) authorize incentive stock options, stock appreciation rights, cash awards and performance awards to be made pursuant to the 2005 Incentive Plan, and (iii) include performance criteria for awards that may be made contingent upon the achievement of one or more performance measures, as well as limits on individual awards, in accordance with the requirements for performance-based compensation under Section 162(m) of the Internal Revenue Code. As of December 31, 2014, there were 6.2 million shares available for issuance under the 2005 Incentive Plan, which includes a maximum of 2.0 million shares that may be granted as incentive stock options.

The 2005 Incentive Plan is administered by the Compensation Committee of Helix’s Board of Directors. The Compensation Committee also determines the type of award to be made to each participant and, as set forth in the related award agreement, the terms, conditions and limitations applicable to each award. The Compensation Committee may grant stock options, restricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”) and cash awards. Prior to 2012, awards granted to employees under the incentive plans vested 20% per year over a five-year period. Commencing in 2012, awards granted under the 2005 Incentive Plan have a vesting period of three years (or 33% per year).

The following grants of share-based awards were made in 2014 under the 2005 Incentive Plan:


Date of Grant	Shares		Grant Date Fair Value Per Share	Vesting Period

January 2, 2014 (1)	73,609	$	23.18	33% per year over three years
January 2, 2014 (2)	73,609	$	26.79	100% on January 1, 2017
January 2, 2014 (3)	2,724	$	23.18	100% on January 1, 2016
April 1, 2014 (3)	4,051	$	22.98	100% on January 1, 2016
July 1, 2014 (3)	3,397	$	26.31	100% on January 1, 2016
October 1, 2014 (3)	3,882	$	22.06	100% on January 1, 2016
December 4, 2014 (4)	51,792	$	23.17	33% per year over three years

(1) Reflects the grant of restricted stock to our executive officers.

(2) Reflects the grant of PSUs to our executive officers.

(3) Reflects the grant of restricted stock to certain members of our Board of Directors who have made an election to take their quarterly fees in stock in lieu of cash.

(4) Reflects annual equity grants to each independent member of our Board of Directors.

In January 2015, we granted our executive officers and selected management employees 293,029 shares of restricted stock under the 2005 Incentive Plan. The market value of the restricted shares was $21.67 per share or $6.3 million and the shares vest 33% per year for a three-year period. Separately, we issued our executive officers and selected management employees 293,029 PSUs under the 2005 Incentive Plan.

Compensation cost for restricted stock is the product of grant date fair value of each share and the number of shares granted and is recognized over the respective vesting periods on a straight-line basis. Forfeitures on restricted stock totaled approximately 8% based on our most recent five-year average of historical forfeiture rates. Tax deduction benefits for an award in excess of recognized compensation cost is reported as a financing cash flow rather than as an operating cash flow. Stock-based compensation that is based solely on service conditions is recognized on a straight-line basis over the vesting period of the related shares.

For the years ended December 31, 2014, 2013 and 2012, $10.4 million, $8.8 million, $7.7 million, respectively, was recognized as stock-based compensation expense related to restricted stock, PSUs and RSUs.

Restricted Stock

We grant restricted stock to members of our Board of Directors, executive officers and selected management employees. The following table summarizes information about our restricted stock during the years ended December 31, 2014, 2013 and 2012:


	2014			2013			2012
			Grant Date			Grant Date			Grant Date
	Shares		Fair Value (1)	Shares		Fair Value (1)	Shares		Fair Value (1)

Awards outstanding at beginning of year	771,942	$	13.62	1,191,402	$	14.14	1,263,218	$	14.80
Granted	139,455		23.22	168,468		21.63	349,430		16.30
Vested (2) (3)	(356,437)		11.27	(502,022)		17.50	(400,180)		18.07
Forfeited	-		-	(85,906)		13.79	(21,066)		15.00
Awards outstanding at end of year (3)	554,960	$	17.54	771,942	$	13.62	1,191,402	$	14.14

(1) Represents the weighted average grant date fair value, which is based on the quoted market price of our common stock on the business day prior to the date of grant.

(2) Total fair value of restricted stock and RSUs that vested during the years ended December 31, 2014, 2013 and 2012 was $8.2 million, $11.0 million and $6.7 million, respectively.

(3) The vested and year-end amounts in 2014 each include 33,760 shares of RSUs with the grant date fair value of $15.80 per share. In December 2013, management elected to pay out the January 2014 vesting of these RSUs in cash. As a result, we recorded a $1.3 million liability associated with these RSUs at December 31, 2013 and an additional liability of $0.2 million during 2014. We paid $0.8 million of this liability in January 2014 and $0.7 million in January 2015.

Future compensation expense associated with unvested restricted stock and RSUs at December 31, 2014, 2013, and 2012 totaled approximately $5.7 million, $7.5 million and $11.2 million, respectively. The weighted average vesting period related to unvested restricted stock and RSUs at December 31, 2014 was approximately 1.2 years.

Performance Stock Units

Since 2012, we have issued PSUs to our executive officers. We also issued PSUs to selected management employees in January 2015. The PSUs provide for an award based on the performance of our common stock over a three-year period with the maximum amount of the award being 200% of the original awarded PSUs and the minimum amount being zero. The PSUs vest 100% on the three-year anniversary date of the grant. The vested PSUs may be settled in either cash or shares of our common stock at the discretion of the Compensation Committee of our Board of Directors.

We issued 73,609 PSUs in 2014 with a grant date fair value of $26.79 per unit, 89,329 PSUs in 2013 with a grant date fair value of $27.50 per unit and 132,910 PSUs in 2012 with a grant date fair value of $23.68 per unit. The estimated fair value of the PSUs on grant date was determined using a Monte Carlo simulation model. Until December 2014, the PSUs were being treated as an equity award. Accordingly, compensation expense associated with the PSUs was fixed, as represented by the number of PSUs multiplied by their respective grant date fair value. The fixed amount was being amortized on a straight-line basis over the three-year vesting period. In connection with the vesting of the 2012 PSU awards (which occurred in early January 2015), the decision was made by the Compensation Committee of Helix’s Board of Directors to settle these PSUs with a cash payment rather than an equivalent number of shares of our common stock, which was the default provision of the PSU awards. Accordingly, PSUs are now accounted for as a liability plan. In connection with this determination, we recorded a $7.9 million liability and an additional $3.3 million compensation charge to reflect the estimated fair value of unvested PSUs as of December 31, 2014. We paid $4.5 million of this liability to cash settle the 2012 grant of PSUs when they vested in January 2015.

Stock Options

There have been no stock options granted since 2004. At December 31, 2011, we had 192,800 stock options outstanding at a weighted average exercise price of $10.52 per share. During 2012, 140,000 of these awards were exercised at a weighted average exercise price of $9.24 per share. The remaining 52,800 stock options were exercised in 2013 at a weighted average price of $13.91 per share. There were no stock option awards remaining at December 31, 2013. The aggregate intrinsic value of the stock options exercised during the years ended December 31, 2013 and 2012 was approximately $0.5 million and $1.3 million, respectively. The aggregate intrinsic value of options exercisable at December 31, 2012 was approximately $0.4 million.

Long-Term Incentive Cash Plans

We also have certain long-term incentive cash plans (the “LTI Cash Plans”) that provide long-term cash-based compensation to eligible employees. Cash awards historically have been both fixed sum amounts payable (for non-executive management only) as well as cash awards indexed to our common stock with the payment amount at each vesting date fluctuating based on the performance of our common stock (for both executive and non-executive management). Payment amounts are measured based on the calculated ratio of the average stock price during the applicable measurement period over the original base price determined by the Compensation Committee of our Board of Directors at the time of the award. The maximum amount payable under these share-based cash awards is twice the original targeted award and if the average price during the measurement period is less than 75% of the base price, no payout will be made at the applicable anniversary date. Cash payments under the LTI Cash Plans are made each year on the anniversary date of the award. Cash awards granted since 2012 have a vesting period of three years while those granted prior to 2012 have a vesting period of five years. The LTI Cash Plans are considered liability plans and as such are re-measured to fair value each reporting period with corresponding changes in the liability amount being reflected in our results of operations.

The cash awards granted under the LTI Cash Plans to our executive officers and selected management employees totaled $8.9 million in 2014, $8.4 million in 2013 and $4.2 million in 2012. Total compensation expense associated with the cash awards issued pursuant to the LTI Cash Plans was $7.2 million ($3.6 million related to our executive officers), $9.1 million ($5.3 million related to our executive officers) and $8.7 million ($7.3 million related to our executive officers), respectively, for the years ended December 31, 2014, 2013 and 2012. The liability balance for the cash awards issued under the LTI Cash Plans was $12.8 million at December 31, 2014 and $14.8 million at December 31, 2013, including $7.9 million at December 31, 2014 and $11.1 million at December 31, 2013 associated with the cash awards issued to our executive officers under the LTI Cash Plans. During 2014, 2013 and 2012, we paid $9.2 million, $7.1 million and $5.5 million of the liability associated with the LTI Cash Plans. In January 2015, we paid $8.9 million of the liability balance as of December 31, 2014. No long-term incentive cash awards were granted in January 2015.