Share-Based Compensation

9 Months Ended

Sep. 30, 2015

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

SHARE-BASED COMPENSATION

Stock Options

The Company has granted stock awards to eligible participants under the LTIP. The stock awards include options to purchase the Company’s Class B Shares. These stock options include a combination of service and market conditions, as further described below. In addition, these stock options include a performance vesting condition, a Qualified Public Offering (see Note 7), which is not considered to be probable as of September 30, 2015. As a result, no share-based compensation expense for stock options has been recognized and none will be recognized for these stock awards until the performance condition is considered to be probable. When the performance condition is considered probable, the stock awards will vest in accordance with the underlying service and market conditions.

The Company calculated the grant date fair value of stock options that vest over a service period using the Black Scholes model. For stock options that contain a market condition related to the return on investment that the Company’s stockholders achieve, the options were valued using a lattice-based option valuation model. The assumptions used in these calculations are noted in the following table. Expected volatilities are based on implied volatilities from comparable companies. The expected time to liquidity is based on management’s estimate. The risk-free rate is based on the U.S. Treasury yield curve for a term equivalent to the estimated time to liquidity. The expected dividend yield is 0% for all stock awards.



	Three Months Ended September 30, 2015	Nine Months Ended September 30, 2015
Option valuation assumptions:
Expected dividend yield	—%	—%
Expected volatility	56%	55%
Risk-free interest rate	1.80%	1.69%
Expected term (in years)	6.3	6.4

A summary of the changes in stock options outstanding during the nine months ended September 30, 2015, is as follows:



	Number of Options	Weighted Average Exercise Price	Weighted Average Remaining Contract Term (years)	Aggregate Intrinsic Value
Options outstanding as of December 31, 2014	576,250	$10.00
Granted	347,875	$15.41
Canceled	(158,750)	$10.00
Options outstanding as of September 30, 2015	765,375	$12.46	4.0	$	2,481,113

Restricted Stock

No restricted stock was granted, canceled or forfeited during the nine months ended September 30, 2015.