Annual report pursuant to Section 13 and 15(d)

Share Based Compensation

v3.8.0.1
Share Based Compensation
12 Months Ended
Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share Based Compensation
14.
SHARE BASED COMPENSATION
Share Incentive Plans. SEACOR’s stockholders approved the 2014 Share Incentive Plan to provide for the grant of options to purchase shares of Common Stock, stock appreciation rights, restricted stock, stock awards, performance awards and restricted stock units to non-employee directors, key officers and employees of the Company. The 2014 Share Incentive Plan superseded the 2007 Share Incentive Plan, the 2003 Non-Employee Director Share Incentive Plan and the 2003 Share Incentive Plan (collectively including all predecessor plans, the “Share Incentive Plans”). The Compensation Committee of the Board of Directors administers the Share Incentive Plans. A total of 6,650,000 shares of Common Stock have been authorized for grant under the Share Incentive Plans. All shares issued pursuant to such grants are newly issued shares of Common Stock. The exercise price per share of options granted cannot be less than 100% of the fair market value of Common Stock at the date of grant under the Share Incentive Plans. Grants to date have been limited to stock awards, restricted stock, restricted stock units and options to purchase shares of Common Stock.
Restricted stock and restricted stock units typically vest from one to five years after date of grant and options to purchase shares of Common Stock typically vest and become exercisable from one to five years after date of grant. Options to purchase shares of Common Stock granted under the Share Incentive Plans expire no later than the tenth anniversary of the date of grant. In the event of a participant’s death, retirement, termination by the Company without cause or a change in control of the Company, as defined in the Share Incentive Plans, restricted stock and restricted stock units vest immediately and options to purchase shares of Common Stock vest and become immediately exercisable.
Employee Stock Purchase Plans. SEACOR’s stockholders approved the 2009 Employee Stock Purchase Plan with a term of ten years (collectively including all predecessor plans, the “Employee Stock Purchase Plans”) to permit the Company to offer Common Stock for purchase by eligible employees at a price equal to 85% of the lesser of (i) the fair market value of Common Stock on the first day of the offering period or (ii) the fair market value of Common Stock on the last day of the offering period. Common Stock is made available for purchase under the Employee Stock Purchase Plans for six-month offering periods. The Employee Stock Purchase Plans are intended to comply with Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”), but is not intended to be subject to Section 401(a) of the Code or the Employee Retirement Income Security Act of 1974. The Board of Directors of SEACOR may amend or terminate the Employee Stock Purchase Plans at any time; however, no increase in the number of shares of Common Stock reserved for issuance under the Employee Stock Purchase Plans may be made without stockholder approval. A total of 600,000 shares of Common Stock have been approved for purchase under the Employee Stock Purchase Plans with all shares issued from those held in treasury.
Share Award Transactions. The following transactions have occurred in connection with the Company’s share based compensation plans during the years ended December 31:
 
2017
 
2016
 
2015
Restricted stock awards granted
153,100

 
137,258

 
135,150

Restricted stock awards forfeited
(2,444
)
 
(2,867
)
 

Director stock awards granted
1,750

 
3,125

 
3,375

Restricted Stock Unit Activities:
 
 
 
 
 
Shares released from Deferred Compensation Plan

 

 
(217
)
Stock Option Activities:
 
 
 
 
 
Outstanding as of the beginning of year
1,639,865

 
1,690,899

 
1,546,508

Granted(1)
1,013,893

 
197,550

 
192,350

Exercised
(562,587
)
 
(113,820
)
 
(40,461
)
Forfeited
(3,374
)
 
(18,760
)
 

Expired
(541,783
)
 
(116,004
)
 
(7,498
)
Outstanding as of the end of year
1,546,014

 
1,639,865

 
1,690,899

Employee Stock Purchase Plans shares issued
36,552

 
41,924

 
39,384

Shares available for issuance under Share Incentive and Employee Stock Purchase Plans as of the end of year(2)
896,265

 
522,341

 
764,567

______________________
(1)
On June 2, 2017, the Company granted 846,353 stock options to existing option holders under make-whole provisions upon the Spin-off.
(2)
Shares available for future grants and ESPP purchases were adjusted on June 2, 2017 to reflect the Spin-off in accordance with make-whole provisions of the plans.
During the years ended December 31, 2017, 2016 and 2015, the Company recognized $32.5 million, $14.1 million and $14.9 million, respectively, of compensation expense related to stock awards, stock options, employee stock purchase plans purchases and restricted stock (collectively referred to as “share awards”). During 2017, compensation expense related to stock awards included $16.6 million associated with the Spin-off and the accelerated vesting of incentive share awards in advance of changes in the U.S. federal income tax code. As of December 31, 2017, the Company had approximately $4.7 million in total unrecognized compensation costs of which $2.2 million and $1.3 million are expected to be recognized in 2018 and 2019, respectively, with the remaining balance recognized through 2022.
The weighted average values of grants under the Company’s Share Incentive Plans were $37.20, $31.31 and $41.09 for the years ended December 31, 2017, 2016 and 2015, respectively. The fair value of each option granted during the years ended December 31, 2017, 2016 and 2015, is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: (a) no dividend yield, (b) weighted average expected volatility of 25.5%, 26.5% and 25.2%, respectively, (c) weighted average discount rates of 1.92%, 1.59% and 1.79%, respectively, and (d) expected lives of 5.59 years, 6.25 years and 6.03 years, respectively.
During the year ended December 31, 2017, the number of shares and the weighted average grant price of restricted stock transactions were as follows:
 
Restricted Stock
 
Number of
Shares
 
Weighted
Average
Grant Price
Nonvested as of December 31, 2016
380,812

 
$
67.92

Granted
153,100

 
$
63.60

Vested(1)
(531,468
)
 
$
49.14

Forfeited(1)
(2,444
)
 
$
43.99

Nonvested as of December 31, 2017

 
$


______________________
(1)
During the year ended December 31, 2017, the weighted average grant prices of restricted stock outstanding at the time of the Spin-off were reduced based on a ratio of the relative market value of the Company’s share price immediately prior to and after the effective date of the Spin-off.
During the years ended December 31, 2017, 2016 and 2015, the total grant date fair value of restricted stock that vested was $26.1 million, $10.8 million and $10.8 million, respectively.
During the year ended December 31, 2017, the number of shares and the weighted average exercise price on stock option transactions were as follows:
 
Total Options
 
Number of
Shares
 
Weighted
Average
Exercise Price
Outstanding, as of December 31, 2016
1,639,865

 
$
63.09

Granted(1)
1,013,893

 
$
41.69

Exercised(1)
(562,587
)
 
$
37.60

Forfeited(1)
(3,374
)
 
$
40.90

Expired(1)
(541,783
)
 
$
47.04

Outstanding, as of December 31, 2017(1)
1,546,014

 
$
39.73

Outstanding and Exercisable, as of December 31, 2017(1)
1,031,581

 
$
39.32

______________________
(1)
During the year ended December 31, 2017, the weighted average exercise prices of stock options outstanding at the time of the Spin-off were reduced based on a ratio of the relative market value of the Company’s share price immediately prior to and after the effective date of the Spin-off.
During the years ended December 31, 2017, 2016 and 2015, the aggregate intrinsic value of exercised stock options was $5.6 million, $1.4 million and $1.0 million, respectively. As of December 31, 2017, the weighted average remaining contractual term for total outstanding stock options and vested/exercisable stock options was 5.36 and 4.05 years, respectively. As of December 31, 2017, the aggregate intrinsic value of all options outstanding and all vested/exercisable options outstanding was $11.8 million and $8.4 million, respectively.