Stock Compensation

3 Months Ended

Mar. 31, 2016

9. Stock Compensation

The Company has an equity incentive plan. The Compensation Committee of the Company’s Board of Directors may grant awards under the plan in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. The maximum number of shares issuable under the equity incentive plan is 1,400,000 shares with 632,000 shares remaining to be issued at March 31, 2016. All grants under the equity incentive plan will be issued to acquire shares at the fair value on date of grant.

As of March 31, 2016, all awards were restricted stock units. Activity with respect to outstanding restricted stock units for the three months ended March 31, 2016 and 2015 was as follows:


		Weighted-
		Average
		Grant-Date
	Shares	Fair Value
2016
Nonvested at January 1, 2016	174,518	$	26
Granted	121,724		25
Vested	(60,425)		25
Nonvested at March 31, 2016	235,817	$	25

2015
Nonvested at January 1, 2015	245,752	$	27
Granted	120,973		26
Vested	(107,788)		28
Forfeited	(17,827)		27
Nonvested at March 31, 2015	241,110	$	26

The Company recognized compensation expense of $0.6 million and $0.4 million for the three months ended March 31, 2016 and 2015, respectively. The fair value as of the vesting date for the restricted stock units that vested during the three months ended March 31, 2016 and 2015 was $0.9 million and $2.5 million, respectively. Upon vesting, unit holders have the option to net share-settle to cover the required withholding tax and the remaining amount is converted into an equivalent number of shares of common stock. The total shares withheld were 15,234 and 35,714 for the three months ended March 31, 2016 and 2015, respectively, and were based on the value of the restricted stock units as determined by the Company’s closing stock price on the date of vesting. Total payments for the employees’ tax obligations to the tax authorities amounted to $0.4 million and $0.9 million for the three months ended March 31, 2016 and 2015, respectively. Other than reimbursements for tax withholdings, there was no cash received under all share-based arrangements.

The Company also has a performance based compensation plan. The incentive compensation is settled in March of each year for the prior year services and is based on Company performance relative to certain metrics. The Company recognizes the expense during the performance period based on the expected compensation amount. The compensation for the performance period ended December 31, 2015 was settled in cash in March 2016. Beginning for the 2016 performance period, a specified portion of the compensation amount for certain employees will be settled in Company shares based on the share price at the date of settlement. Upon settlement, employees may have the option to net share-settle to cover the required withholding tax and the remaining amount is converted into an equivalent number of shares of common stock. The estimated performance based compensation to be settled in stock amounted to $0.2 million for the three months ended March 31, 2016.