Annual report pursuant to Section 13 and 15(d)

Stock-Based Compensation

v2.4.0.8
Stock-Based Compensation
12 Months Ended
Dec. 31, 2013
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stock-Based Compensation
14. Stock-Based Compensation:

OHCP HM Acquisition Corp. 2010 Stock Option Plan:

Effective May 28, 2010, Holdco established the OHCP HM Acquisition Corp. 2010 Stock Option Plan, as amended (the “Option Plan”), pursuant to which Holdco may grant options for up to an aggregate of 49,239 shares of its common stock. The Option Plan is administered by a committee of the Holdco board of directors. Such committee determines the terms of each option grant under the Option Plan, except that the exercise price of any granted option may not be lower than the fair market value of one share of common stock of Holdco as of the date of grant.

Under the Option Plan, Holdco granted 32,284 options in 2010, 1,030 options in 2011, 7,375 options in 2012, and 8,550 options in 2013. The options were granted with an exercise price which was equal to the grant date fair value of the underlying securities. As of December 31, 2013, options for a total of 4,733 shares have been canceled and options for 183 shares have been exercised.

 

Option holders are not required by the terms of the Option Agreement or the Stockholders Agreement to hold the shares for any period of time following exercise. Liability classification is required because this arrangement permits the holders to put the shares back without being exposed to the risks and rewards of the shares for a reasonable period of time. Consistent with past practice, the Company has elected to use the intrinsic value method to value the options. The stock option liability was $9,618 and $714 as of December 31, 2013 and 2012, respectively.

Stock options granted to management under the Option Plan are divided into three equal vesting tranches. The first tranche is a service-based award which vests ratably over five years, subject to the optionee’s continued employment with the Company on each vesting date. The Company will recognize compensation costs for the portion of the awards that are service based on a straight-line basis over the requisite service period for the entire award. The second tranche is performance-based and vests ratably over five years (if granted prior to 2013) or four years (if granted during 2013), subject to both the optionee’s continued employment on each vesting date and the achievement of Company performance targets. Again, compensation costs will be recognized for the performance based awards over the requisite service period for each of the five or four, as applicable, separate vesting service periods. However, if achievement of the applicable performance target is not probable, no compensation cost will be recorded. The third tranche of each stock option grant is outcome-based and depends on OHCP receiving a certain rate of return upon a change in control, provided that the optionee is still employed by the Company at the time of such change in control. This provision would be viewed as having a performance condition due to the change in control requirement and that condition would only be probable at the time that the change in control occurred, and accordingly, the Company will not recognize compensation expense for the third tranche until a change in control is deemed to be probable.

The Company has elected to use the intrinsic value method to value the options at the end of each reporting period. The intrinsic value of the common shares exceeded the exercise price of the options at December 31, 2013, and therefore, compensation expense of $9,006 was recorded in the accompanying consolidated statements of comprehensive loss for the year ended December 31, 2013. The intrinsic value of the common shares exceeded the exercise price of the options at December 31, 2012, and therefore, compensation expense of $714 was recorded in the accompanying consolidated statements of comprehensive loss for the year ended December 31, 2012. The intrinsic value of the common shares was equal to the exercise price at December 31, 2011, and therefore, no compensation expense was recorded in the accompanying consolidated statements of comprehensive loss for the year ended December 31, 2011.

OHCP HM Acquisition Corp. Deferred Stock Unit Plan U.S.:

Effective December 31, 2013, Holdco established the OHCP HM Acquisition Corp. Deferred Stock Unit Plan U.S. for Senior Officers (the “DSU Plan”). The DSU Plan permits an eligible executive to elect to have a short-term incentive award to be paid in the form of deferred stock units, which are bookkeeping entries equivalent in value to one share of Holdco common stock. The number of deferred stock units to be credited to a DSU Plan participant’s account is determined by dividing the amount of the participant’s short-term incentive award to be deferred into deferred stock units by the Fair Market Value (as defined in the Option Plan) of a share of common stock on December 31st of the calendar year in which occurred the end of the performance period to which the short-term incentive award applies. Deferred stock units are redeemable and the value thereof payable upon the termination of employment or death of DSU Plan participant.

Under the DSU Plan, Holdco granted 780 deferred stock units in 2013.