Annual report pursuant to Section 13 and 15(d)

SHARE-BASED COMPENSATION

v2.4.0.8
SHARE-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION
Share Incentive Plans. In 2013, the Company adopted the Era Group Inc. 2013 Employee Stock Purchase Plan (“ESPP”) under which the Company may offer up to a maximum of 300,000 shares of the Company’s 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 ESPP for six-month offering periods. The ESPP is 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 the Company may amend or terminate the ESPP at any time; however, no increase in the number of shares of Common Stock reserved for issuance under the ESPP may be made without stockholder approval. The ESPP has a term of ten years.
In 2013, the Company adopted the Era Group Inc. 2012 Incentive Plan (“2012 Plan”) under which a maximum of 4,000,000 shares of the Company’s common stock are reserved for issuance. Awards granted under the 2012 Plan may be in the form of stock options, stock appreciation rights, shares of restricted stock, other share-based awards (payable in cash or common stock) or performance awards, or any combination thereof, and may be made to outside directors, employees or consultants. As of December 31, 2013, 3,364,998 shares remained available for grant under the 2012 Plan.
Share Award Transactions. Transactions in connection with the Company’s share-based compensation plans during the year ended December 31, 2013 were as follows:
Director stock awards granted
45,510

Restricted stock awards granted
224,850

Restricted stock awards canceled
3,700

Stock option activities:
 
Outstanding as of December 31, 2012
—

Converted stock options
169,058

Granted
200,000

Exercised
(40,302
)
Forfeited
(716
)
Expired
—

Outstanding as of December 31, 2013
328,040


Total share-based compensation expense, which includes stock options, restricted stock and ESPP purchases, totaled $2.0 million for the year ended December 31, 2013. A portion of the restricted stock awards are performance-based. The Company has assessed the probability of meeting the criteria and has recorded the appropriate expense. As of December 31, 2013, the Company had approximately $5.8 million in total unrecognized compensation costs.
During the year ended December 31, 2013, the Company awarded 264,760, net, shares of restricted stock at an average grant date fair value of $21.28 per share, granted 200,000 stock options and converted 37,900 options to purchase SEACOR common stock held by Company employees and directors prior to the Spin-off into 169,058 options to purchase Era Group common stock. The fair value used for the converted stock options was evaluated before and after the Spin-off and there was no change. The following table shows the assumptions used to compute the share-based compensation expense for stock options granted during the year ended December 31, 2013:
Risk free interest rate
 
0.81
%
Expected life (years)
 
5

Volatility
 
50
%
Dividend yield
 
—
%
Weighted average exercise price of options granted
 
$19.05 per option

Weighted average grant-date fair value of options granted
 
$7.87 per option


During the year ended December 31, 2013, the number of shares and the weighted average grant price of restricted stock and restricted stock unit transactions were as follows:
 
 
Number of Shares
 
Weighted Average Grant Price
Nonvested as of December 31, 2012
 
—

 
$
—

Granted
 
270,360

 
$
21.28

Vested
 
(1,900
)
 
$
21.69

Forfeited
 
(3,700
)
 
$
20.48

Nonvested as of December 31, 2013
 
264,760

 
$
21.29


During the year ended December 31, 2013, the number of shares, the weighted average grant date fair value and the weighted average exercise price on stock option transactions were as follows:
 
 
Nonvested Options
 
Vested/Exercisable Options
 
Total Options
 
 
Number of Shares
 
Weighted Average Grant Date Fair Value
 
Number of Shares
 
Weighted Average Exercise Price
 
Number of Shares
 
Weighted Average Exercise Price
Outstanding as of December 31, 2012
 
—

 
$
—

 
—

 
$
—

 
—

 
$
—

Granted
 
235,452

 
$
9.59

 
133,606

 
$
15.28

 
369,058

 
$
18.52

Vested
 
(34,896
)
 
$
6.07

 
34,896

 
$
17.32

 
—

 
$
—

Exercised
 
—

 
$
—

 
(40,302
)
 
$
14.31

 
(40,302
)
 
$
14.31

Expired
 
—

 
$
—

 
—

 
$
—

 
—

 
$
—

Forfeited
 
—

 
$
—

 
(716
)
 
$
14.62

 
(716
)
 
$
14.62

Outstanding as of December 31, 2013
 
200,556

 
$
10.21

 
127,484

 
$
16.14

 
328,040

 
$
19.05


During the year ended December 31, 2013, the aggregate intrinsic value of exercised stock options was $0.4 million. As of December 31, 2013, the weighted average remaining contractual term for total outstanding stock options and vested/exercisable stock options was 7.92 years. As of December 31, 2013, the aggregate intrinsic value of all options outstanding and all vested/exercisable options outstanding was $6.2 million.