Stock-Based Compensation Plan

3 Months Ended

Mar. 31, 2016

Stock-Based Compensation Plan [Abstract]

CAI INTERNATIONAL, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(9)Stock–Based Compensation Plan

Stock Options

The Company grants stock options to certain employees and independent directors pursuant to its 2007 Equity Incentive Plan (Plan), as amended, which was originally adopted on April 23, 2007. Under the Plan, a maximum of 1,921,980 share awards may be granted.

Stock options granted to employees have a vesting period of four years from grant date, with 25% vesting after one year, and 1/48th vesting each month thereafter until fully vested. Stock options granted to independent directors vest in one year. All of the stock options have a contractual term of ten years.

The following table summarizes the Company’s stock option activities for the three months ended March 31, 2016 and 2015:



	Three Months Ended March 31,
	2016			2015
		Weighted			Weighted
		Average			Average
	Number of	Exercise		Number of	Exercise
	Shares	Price		Shares	Price
Options outstanding at January 1	1,189,255	$	18.08	1,420,749	$	15.67
Options exercised - employees	-	$	-	(354,244)		12.35
Options outstanding at March 31	1,189,255	$	18.08	1,066,505	$	16.78
Options exercisable	917,729	$	16.92	835,276	$	15.31
Weighted average remaining term	4.7 years			5.1 years

The aggregate intrinsic value of stock options exercised during the three months ended March 31, 2015 was $4.0 million. The aggregate intrinsic value of all options outstanding as of March 31, 2016 was $0.9 million based on the closing price of the Company’s common stock of $9.66 per share on March 31, 2016, the last trading day of the quarter.

The Company recorded stock-based compensation expense of $0.4 million for both the three months ended March 31, 2016 and 2015. As of March 31, 2016, the remaining unamortized stock-based compensation cost relating to stock options granted to the Company’s employees and independent directors was approximately $2.1 million which is to be recognized over the remaining weighted average vesting period of approximately 2.5 years.

Restricted Stock

The Company grants restricted stock to certain employees pursuant to the Plan. The restricted stock is valued based on the closing price of the Company’s stock on the date of grant and has a vesting period of four years. The following table summarizes the activity of restricted stock under the Plan:



	Number of	Weighted
	Shares of	Average
	Restricted	Grant Date
	Stock	Fair Value
Restricted stock outstanding, December 31, 2015	48,025	$	22.70
Restricted stock vested	(2,511)	$	23.04
Restricted stock outstanding, March 31, 2016	45,514	$	22.68

The Company recognized $0.1 million of stock-based compensation expense relating to restricted stock for both the three months ended March 31, 2016 and 2015. As of March 31, 2016, unamortized stock-based compensation expense relating to restricted stock was $0.8 million, which will be recognized over the remaining average vesting period of 2.3 years.

Stock-based compensation expense is recorded as a component of administrative expenses in the Company’s consolidated statements of income with a corresponding credit to additional paid-in capital in the Company’s consolidated balance sheets.