Share-Based Compensation Arrangements

3 Months Ended

Mar. 31, 2014

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

Share-Based Compensation Arrangements

Share-Based Compensation Arrangements

We may grant Stock Appreciation Rights ("SARs") and phantom shares under our Long-Term Incentive Cash Award Plan. As both the SARs and the phantom shares under this plan are settled in cash rather than by issuing equity instruments, we record an expense with a corresponding liability on our balance sheet. The expense is based on the fair value of the awards on the last day of the reporting period and represents an amortization of that fair value over the vesting period of the awards.

Starting in 2011, we awarded performance based phantom shares to make our equity incentives reflect our performance during the respective calendar year. These performance phantom shares vest one-third each year over a 3 year period. In 2013 and 2012, 23,642 and 435,866, respectively, performance based phantom shares were issued based on our calendar year financial results.

In the first quarter of 2014, our Board of Directors adopted the 2014 Omnibus Incentive Plan, which was approved by our shareholders at our April 30, 2014 Annual Shareholders Meeting. Under this plan, we will be able to award share-based compensation that does not have to be settled in cash. As a result of this new plan, no share-based compensation was granted during the first quarter of 2014.

Our liability with regard to our outstanding, cash settled, share-based awards is re-measured in each quarterly reporting period. The fair value of the phantom shares is based on the closing stock price on our Class A common stock on the last day of the period. At March 31, 2014 and December 31, 2013, the closing stock price on our Class A common stock was $6.90 and $9.05 respectively.

We measure the fair value of each SAR based on the closing stock price of Class A common stock on the last day of the period using a Black-Scholes valuation model. The fair value of each SAR was estimated as of March 31, 2014 and 2013 using the following assumptions:

	March 31, 2014		March 31, 2013
Risk-free interest rate	0.12%-0.78%		0.24%-0.48%
Dividend yield	0.0	%	0.0	%
Expected life (years)	0.9-2.8 years		1.9-3.8 years
Volatility	61.77	%	64.99	%

Compensation expense related to outstanding share-based compensation awards for the three months ended March 31,2014 and 2013, was $0.3 million and $1.4 million, respectively. The balance of the fair value that has not yet been recorded as expense is considered an unrecognized liability. The total unrecognized compensation liability as calculated at March 31, 2014 and December 31, 2013 was $0.2 million and $1.7 million, respectively. Total cash paid under this plan for the three months ended March 31,2014 and 2013 was $0.8 million and $1.6 million, respectively.

In addition to the awards to our employees, we grant deferred stock units ("DSUs") to our non-employee directors under our Outside Directors' Deferred Stock Unit Plan. These awards are fully vested when made. We measure the fair value of outstanding DSUs based upon the closing stock price of our Class A Common Stock on the last day of the reporting period. We pay out the DSUs to a director after the earlier of a Company Change in Control, as defined in the plan, or the date when he or she ceases to be a non-employee director for any reason. Since the DSUs are settled in cash rather than by issuing equity instruments, we record an expense with a corresponding liability on our Consolidated Balance Sheets. Total (income) expense related to the DSUs for the three months ended March 31, 2014 and 2013 was $(0.1) million and $0.4 million, respectively. We recorded a liability of $0.4 million and $1.2 million as of March 31, 2014 and December 31, 2013, respectively. Total cash paid for DSUs for the three months ended March 31, 2014 and 2013 was $0.7 million and $0.2 million, respectively. The 2014 Omnibus Incentive Plan will allow us to grant restricted stock units that do not need to be settled in cash instead of deferred stock units to our non-employee directors.