Stock-Based Compensation

3 Months Ended

Mar. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

We recognize stock-based compensation expense in Selling, general & administrative expenses based on the fair value of the awards issued. Stock-based compensation for the three months ended March 31, 2014 and 2013 is as follows (in thousands):

	Three Months Ended March 31,
	2014		2013
Stock-based compensation expense	$	1,764	$	2,034

Stock Options

Stock option awards, other than awards under our 2012-2014 Long Term Incentive Plan ("LTI Plan"), are generally granted with an exercise price equal to the market price of our common stock at the date of grant, a four-year vesting schedule, and a term of 10 years.

Under the LTI Plan, we made grants of performance based options and awards during the first quarter of 2014, which will vest in one year based on the Company's achievement of return on net assets targets established by our Board of Directors at the beginning of each year. These awards are granted with an exercise price equal to the market price of our common stock at the date of grant and have a term of 10 years. The fair value of each grant was estimated on the date of grant using the Black-Scholes-Merton option pricing model utilizing an expected volatility of 53.3%, a risk-free rate of 1.7%, a dividend yield of zero, and an expected term of 5.4 years. The weighted-average grant date fair value of the options is $13.09 per share.

A summary of our time based stock option activity for the three months ended March 31, 2014 is as follows (in thousands):

	Shares
Options outstanding at beginning of period	1,573
Options granted	—
Options exercised	(433	)
Options forfeited	(47	)
Options expired	(2	)
Options outstanding at end of period	1,091

Changes in outstanding performance based stock options during the three months ended March 31, 2014 were as follows (in thousands):

	Shares
Options outstanding at beginning of period	1,239
Options granted	42
Options exercised	(108	)
Options forfeited	(179	)
Options expired	—
Options outstanding at end of period	994

Restricted Stock Units

Restricted Stock Units ("RSU") are generally granted with a four-year vesting schedule.

A summary of our time-based unvested RSU activity for the three months ended March 31, 2014 is as follows (in thousands):

	Shares
Balance at beginning of period	230
RSUs granted	26
RSUs vested	(18	)
RSUs forfeited	(15	)
Balance at end of period	223

Changes in the unvested performance based RSUs during the three months ended March 31, 2014 were as follows (in thousands):

	Shares
Balance at beginning of period	1,344
RSUs granted	49
RSUs vested	—
RSUs settled in cash	(418	)
RSUs forfeited	(476	)
Balance at end of period	499

During the first quarter of 2014, Performance Stock Options (“PSOs”) and Performance Stock Units (“PSUs”) vested in accordance with performance targets for fiscal 2013. At that time, the Board of Directors authorized the settlement of the PSUs in cash at a value equal to the fair market value of the equity instrument on the vest date. Due to the settlement, $11.2 million was deducted from Additional paid-in capital and paid in cash in lieu of the issuance of shares. Our statement of cash flows represents this transaction as “Settlement of performance stock units.” All compensation expense related to these awards was recognized during the performance period ending December 31, 2013.