Share-Based Compensation

3 Months Ended

Mar. 31, 2015

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

Since May 2, 2013, our non-employee directors and key employees have been granted share-based awards through our SICP. We record these share-based awards as compensation costs over the respective service period for which services are received in exchange for an award of equity or equity-based compensation. The compensation cost is based primarily on the fair value of the shares awarded, using the estimated fair value of each share on the date it was granted and the number of shares to be issued at the end of the service period.

The table below presents the amounts included in net income related to share-based compensation expense for the three months ended March 31, 2015 and 2014:



	Three Months Ended
	March 31,
	2015			2014
(in thousands)
Awards to non-employee directors	$	150		$	124
Awards to key employees	387			514
Total compensation expense	537			638
Less: tax benefit	(217		)	(257		)
Share-based compensation amounts included in net income	$	320		$	381

Non-employee Directors

Shares granted to non-employee directors are issued in advance of the directors’ service periods and are fully vested as of the date of the grant. We record a prepaid expense equal to the fair value of the shares issued and amortize the expense equally over a service period of one year. In May 2014, each of our non-employee directors received an annual retainer of 1,209 shares of common stock under the SICP. At March 31, 2015, there was $50,000 of unrecognized compensation expense related to these awards. This expense was fully recognized over the directors' remaining service periods ending April 30, 2015.

Key Employees

The table below presents the summary of the stock activity for awards to key employees for the three months ended March 31, 2015:



	Number of Shares		Weighted Average Fair Value
Outstanding—December 31, 2014	123,038		$	32.60
Granted	29,763		$	48.90
Vested	(43,839	)	$	28.01
Expired	(2,520	)	$	28.83
Outstanding—March 31, 2015	106,442		$	38.17

In January 2015, our Board of Directors granted awards of 29,763 shares to key employees under the SICP. The shares granted in January 2015 are multi-year awards that will vest at the end of the three-year service period ending December 31, 2017. All of these stock awards are earned based upon the successful achievement of long-term goals, growth and financial results, which comprise both market-based and performance-based conditions or targets. The fair value of each performance-based condition or target is equal to the market price of our common stock on the date each award is granted. For the market-based conditions, we used the Black-Scholes pricing model to estimate the fair value of each market-based award granted.

At March 31, 2015, the aggregate intrinsic value of the SICP awards granted to key employees was $5.4 million. At March 31, 2015, there was $2.3 million of unrecognized compensation cost related to these awards, which is expected to be recognized during 2015 through 2017.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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