|6 Months Ended|
Jun. 30, 2012
|Equity-Based Compensation [Abstract]|
Stock Incentive Plans
On May 19, 2011, Quanta’s stockholders approved the Quanta Services, Inc. 2011 Omnibus Equity Incentive Plan (the 2011 Plan). The 2011 Plan provides for the award of non-qualified stock options, incentive (qualified) stock options (ISOs), stock appreciation rights, restricted stock, restricted stock units, stock bonus awards, performance compensation awards (including cash bonus awards) or any combination of the foregoing. The purpose of the 2011 Plan is to provide participants with additional performance incentives by increasing their proprietary interest in Quanta. Employees, directors, officers, consultants or advisors of Quanta or its affiliates are eligible to participate in the 2011 Plan, as are prospective employees, directors, officers, consultants or advisors of Quanta who have agreed to serve Quanta in those capacities. An aggregate of 11,750,000 shares of Quanta common stock may be issued pursuant to awards granted under the 2011 Plan.
Additionally, pursuant to the Quanta Services, Inc. 2007 Stock Incentive Plan (the 2007 Plan), which was adopted on May 24, 2007, Quanta may award restricted stock, incentive stock options and non-qualified stock options to eligible employees, directors, and certain consultants and advisors. An aggregate of 4,000,000 shares of common stock may be issued pursuant to awards granted under the 2007 Plan. Quanta also has a Restricted Stock Unit Plan (the RSU Plan), pursuant to which RSUs may be awarded to certain employees and consultants of Quanta’s Canadian operations.
Equity awards also remain outstanding under a prior plan adopted by Quanta, as well as under plans assumed by Quanta in connection with its acquisition of InfraSource Services, Inc. in 2007. While no further awards may be made under these plans, the awards outstanding under the plans continue to be governed by their terms. These plans, together with the 2011 Plan, the 2007 Plan and the RSU Plan, are referred to as the Plans.
Restricted shares of Quanta’s common stock have been issued under the Plans, with the grant date fair value for awards of restricted stock based on the market value of Quanta common stock on the date of grant. The shares of restricted stock issued are subject to forfeiture, restrictions on transfer and certain other conditions until vesting, which generally occurs over three years in equal annual installments. During the restriction period, holders are entitled to vote and receive dividends on such shares.
During the three months ended June 30, 2012 and 2011, Quanta granted 89,293 and 67,198 shares of restricted stock under the Plans with a weighted average grant date fair value of $22.17 and $19.90. During the six months ended June 30, 2012 and 2011, Quanta granted 1.3 million and 0.9 million shares of restricted stock under the Plans with a weighted average grant date fair value of $21.69 and $22.16. Additionally, during the three months ended June 30, 2012 and 2011, 52,950 and 55,128 shares of restricted stock vested, with an approximate fair value at the time of vesting of $1.2 million and $1.1 million. During the six months ended June 30, 2012 and 2011, 0.9 million and 0.9 million shares of restricted stock vested, with an approximate fair value at the time of vesting of $19.7 million and $20.0 million.
As of June 30, 2012, there was approximately $34.6 million of total unrecognized compensation cost related to unvested restricted stock granted to both employees and non-employees. This cost is expected to be recognized over a weighted average period of 2.09 years.
Restricted Stock Units
RSUs granted by Quanta under the Plans are intended to provide plan participants with cash performance incentives that are substantially equivalent to the risks and rewards of equity ownership in Quanta by providing the participants with rights to receive a cash bonus that is determined by reference to Quanta’s common stock price. The number of RSUs awarded to grantees is determined based on the dollar amount of the grant and the closing price on the date of grant of a share of Quanta common stock. The RSUs vest over a designated period, typically three years, and are subject to forfeiture under certain conditions, primarily termination of service. Upon vesting of RSUs, the holders receive a cash bonus equal to the number of RSUs vested multiplied by Quanta’s common stock price on the vesting date. In the future, Quanta may also issue RSUs that provide for the issuance of Quanta common stock upon vesting.
Compensation expense related to RSUs was $0.5 million and $0.2 million for the three months ended June 30, 2012 and 2011 and $0.8 million and $0.5 million for the six months ended June 30, 2012 and 2011. Such expense is recorded in selling, general and administrative expenses. RSUs that may be settled only in cash are not included in the calculation of earnings per share, and the estimated earned value of such RSUs is classified as a liability. Quanta paid nominal amounts to settle liabilities related to RSUs in the three months ended June 30, 2012 and 2011 and $0.3 million and $0.1 million to settle liabilities in the six months ended June 30, 2012 and 2011. Liabilities recorded for the estimated earned value of the RSUs outstanding were $1.1 million and $1.3 million at June 30, 2012 and December 31, 2011.
The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.
Reference 1: http://www.xbrl.org/2003/role/presentationRef