Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

Stock-Based Compensation

Stock-Based Compensation

NOTE 12.Stock-Based Compensation

Total stock-based compensation expense was $4.8 million and $4.1 million during the three months ended March 31, 2015 and 2014, respectively. Stock-based compensation capitalized to assets under construction was $0.2 million during each of the three months ended March 31, 2015 and 2014.

During the three months ended March 31, 2015, the company awarded 0.8 million unvested restricted stock units at an average grant date price of $31.64 per share.  Of this amount, 0.2 million stock units represents the target amount of grants made to certain key employees whereby vesting is contingent on meeting both a service requirement and either a Company financial performance condition or a Company stock market performance condition. 

The number of units granted with the financial performance condition that ultimately will vest is based on a return on invested capital measurement over the three year vesting period of the awards.  The awards granted with a financial performance condition have a grant date fair value of $30.10 per share. The number of units granted with the stock market performance condition that ultimately will vest is based on a measurement of the change in the Company’s average stock price compared to the change in value of the Russell 2000 stock index as determined over the three year vesting period of the awards.  The awards granted with the stock market performance condition were valued at a grant date fair value of $40.30 per share using a Monte Carlo simulation.  For both types of awards with performance conditions, the number of shares that ultimately vest could range from 50% to 200% of the target amount, or zero percent if the minimum threshold is not achieved.

As of March 31, 2015, total unrecognized compensation expense related to unvested restricted stock awards and restricted stock units is $41.4 million, net of estimated forfeitures, and will be recognized over a weighted-average remaining vesting period of 2.6 years.  Approximately $8.4 million of the total unrecognized compensation cost, net of estimated forfeitures, is related to awards whereby vesting is contingent on meeting certain financial performance and stock market performance conditions.

As of March 31, 2015, total unrecognized compensation expense related to share options is $1.0 million, net of estimated forfeitures, and will be recognized over a weighted-average remaining vesting period of 0.8 years. As of March 31, 2015, the number of options outstanding was 1.7 million at a weighted-average exercise price of $20.47 and the number of options exercisable was 1.5 million at a weighted-average exercise price of $21.39 per share.

Certain equity incentive plan participants elect to have the Company withhold shares to pay for minimum taxes due at the time their restricted stock vests. The quantity and value of the shares withheld during the three months ended March 31, 2015 and 2014 were immaterial and have been included in treasury shares.