Stock-based Compensation

9 Months Ended

Sep. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

The following table presents the number of options granted to purchase shares of the Company’s stock and the respective ranges of exercise prices per share and the weighted-average fair value of those granted options:



	Nine months ended September 30,
	2015		2014
Options granted	133,279		116,990
Range of exercise prices, per share	$25.43 to $26.97		$19.55 to $21.57
Weighted-average fair value, per option	$	8.19	$	7.72

The fair value of each option grant was established at the date of the grant using the Black-Scholes option pricing model, with the following assumptions:



	Nine months ended September 30,
	2015		2014
Weighted-average risk-free interest rate	1.8	%	2.0	%
Expected dividend yield	1.1	%	—	%
Weighted-average volatility of Company's common stock	32.2	%	34.0	%
Weighted-average assumed forfeiture rate	9.0	%	10.3	%
Weighted-average expected term of options, in years	7.5		7.2
Options vesting annually	25.0	%	25.0	%

The following table details the Company's stock-based compensation expense and related tax benefit associated with this expense:

During the first nine months of 2015 and 2014 the Company reversed $253,000 and $268,000, respectively, of previously recognized stock-based compensation expense due to differences between actual and estimated forfeiture rates of stock options granted during the first quarters of 2011 and 2010, respectively, primarily related to incentive stock options (ISOs), for which the Company generally does not receive a tax deduction on employee exercise of options.

Due to a material change in the number of members on the Company's board of directors over the previous twelve months, on June 19, 2015, a change in control was deemed to have occurred under a provision in the Company's 2006 Employee Stock Option and Restricted Stock Plan, whereby all outstanding employee stock options immediately became fully vested and exercisable. As a consequence, the Company recorded accelerated stock-based compensation expense totaling $1.4 million during the second quarter of 2015, $724,000 of which was related to ISOs and, therefore, not deductible for federal income tax purposes. The Company will not recognize any further compensation expense related to these vested options. The change in the number of members of the board of directors did not have an impact on the 2011 Directors Stock Option and Restricted Stock Plan (the 2011 Plan) and the outstanding options under this plan continue to vest over a four-year period. As of September 30, 2015, there was $775,000 of total unrecognized compensation cost related to nonvested stock option awards issued under the 2011 Plan.

Nine months ended September 30,

(in thousands)

Stock-based compensation expense

Tax benefit associated with compensation expense