Annual report pursuant to Section 13 and 15(d)

SHARE-BASED COMPENSATION

v2.4.1.9
SHARE-BASED COMPENSATION
 12 Months Ended
Dec. 31, 2014
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. 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. Era Group’s board of directors determines, for each award, whether to issue new shares or shares from the Company’s treasury account. As of December 31, 2014 and 2013, 3,216,798 and 3,364,998 shares, respectively, remained available for grant under the 2012 Plan.
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 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. As of December 31, 2014 and 2013, 246,914 and 300,000 shares, respectively, remained available for issuance under the ESPP.
Total share-based compensation expense, which includes stock options, restricted stock and ESPP purchases, was $5.8 million and $2.0 million for the years ended December 31, 2014 and 2013, respectively. 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, 2014, the Company had approximately $4.2 million in total unrecognized compensation costs.
Restricted Stock Awards. During the year ended December 31, 2014, the number of shares and the weighted average grant price of restricted stock award transactions were as follows:
 
 
2014
 
 
Number of Shares
 
Weighted Average Grant Price
Non-vested as of December 31, 2013
 
264,760

 
$
21.29

Restricted stock awards granted:
 
 
 
 
Non-employee directors
 
14,364

 
$
29.24

Employees
 
112,686

 
$
29.23

Vested
 
(187,040
)
 
$
22.12

Forfeited
 
(8,850
)
 
$
24.86

Non-vested as of December 31, 2014
 
195,920

 
$
25.48


During the years ended December 31, 2014 and 2013, the Company awarded 127,050 and 270,360 shares, respectively, of restricted stock at a weighted average grant date fair value of $29.23 and $21.28, respectively. The total fair value of shares vested during the years ended December 31, 2014 and 2013, determined using the closing price on the grant date, was $4.1 million and $0.1 million, respectively, including $1.6 million related to the accelerated vesting of shares during 2014 for the Company’s former Chief Executive Officer.
Stock Option Grants. During the year ended December 31, 2014, the number of shares, the weighted average grant date fair value and the weighted average exercise price on stock option transactions were as follows:
 
 
Non-vested 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, 2013
 
200,556

 
$
10.21

 
127,484

 
$
16.14

 
328,040

 
$
19.05

Granted
 
45,000

 
$
10.86

 
—

 
$
—

 
45,000

 
$
29.24

Vested
 
(168,056
)
 
$
9.36

 
168,056

 
$
22.02

 
—

 
$
—

Exercised
 
—

 
$
—

 
(15,892
)
 
$
20.15

 
(15,892
)
 
$
20.15

Expired
 
—

 
$
—

 
(15,000
)
 
$
26.23

 
(15,000
)
 
$
26.23

Forfeited
 
—

 
$
—

 
—

 
$
—

 
—

 
$
—

Outstanding as of December 31, 2014
 
77,500

 
$
9.54

 
264,648

 
$
19.06

 
342,148

 
$
20.02


During the years ended December 31, 2014 and 2013, the weighted average grant date fair value of stock options granted was $10.86 and $9.59, respectively, and the aggregate intrinsic value of exercised stock options was $0.2 million and $0.4 million, respectively. As of December 31, 2014, the weighted average remaining contractual term for total outstanding stock options and vested/exercisable stock options was 4.48 years and 3.29 years, respectively. As of December 31, 2014, the aggregate intrinsic value of total outstanding stock options and vested/exercisable stock options outstanding was $0.7 million.
The Company uses a Black-Scholes option pricing model to estimate the fair value of stock options. The following table shows the assumptions used to compute the share-based compensation expense for stock options granted during the years ended December 31, 2014 and 2013:
 
 
2014
 
2013
Risk free interest rate
 
1.75
%
 
0.81
%
Expected life (years)
 
5

 
5

Volatility
 
39.62
%
 
50.00
%
Dividend yield
 
—
%
 
—
%
Weighted average exercise price of options granted (per option)
 
$
29.24

 
$
19.05

Weighted average grant-date fair value of options granted (per option)
 
$
10.86

 
$
7.87