Stock Compensation

3 Months Ended

Mar. 31, 2015

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

Stock Compensation

Stock Compensation

The Company’s Amended and Restated 2008 Incentive Stock Plan (the “2008 Plan”) authorizes the Compensation Committee of the Board of Directors to issue up to 4,000,000 shares of various types of stock based awards including stock options, restricted stock and stock appreciation rights to key employees and directors. In general, options granted and outstanding vest over a three year period and expire ten years from the date of grant.

The Company recorded stock compensation expense of approximately $1.0 million and $0.8 million for the three months ended March 31, 2015 and 2014, respectively. These expenses are included in SG&A expenses in the accompanying Condensed Consolidated Statements of Income (Unaudited). Total unrecognized compensation cost related to non-vested share based compensation arrangements at March 31, 2015 was approximately $5.9 million which will be recognized over the next three years, as such compensation is earned.

In March 2015, stock options for 208,200 shares were granted with a three year vesting period. The fair value of options granted is estimated using a binomial lattice option pricing model based on assumptions set forth in the following table. The Company uses historical data to estimate employee exercise and departure behavior. The risk free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant and through the expected term. The dividend yield rate is based on the Company’s historical dividend yield. The expected volatility is derived from historical volatility of the Company’s shares and those of similar companies measured against the market as a whole.

Model
Risk free interest rate	2.10		%
Expected dividend yield	2.90		%
Expected life of award (years)	8.0
Expected volatility	50.00		%
Fair value per option share	$	6.03

The following table provides a summary of stock option activity for the period ended March 31, 2015:

	Shares		Average Exercise Price		Weighted Average Life
Outstanding at January 1, 2015	1,512,756		$	13.24
Options granted	208,200		18.67
Options exercised	(74,110	)	12.42
Canceled or forfeited	(21,234	)	18.64
Outstanding at March 31, 2015	1,625,612		$	13.91	5.90 years
Exercisable at March 31, 2015	1,217,909		$	12.35	4.74 years

The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The total intrinsic value of all stock options exercised during the three months ended March 31, 2015 and 2014 was approximately $0.5 million and $1.2 million, respectively.

In March 2015, 93,500 Restricted Stock Unit ("RSU") Awards were granted with a three year vesting period. The RSUs had a grant date fair value of $18.69 per share, which was the closing price of the common stock on the date of grant.

The following table provides a summary of combined RSU and restricted stock activity for the period ended March 31, 2015:

	Awards		Average Grant-Date Fair Value
Unvested at January 1, 2015	236,196
Granted	93,500		$	18.69
Vested	(132,969	)	15.40
Canceled or forfeited	(13,632	)	18.84
Unvested at March 31, 2015	183,095		$	18.08

Restricted stock units are rights to receive shares of common stock, subject to forfeiture and other restrictions, which vest over a three year period. Restricted shares are considered to be non-vested shares under the accounting guidance for share-based payment and are not reflected as issued and outstanding shares until the restrictions lapse. At that time, the shares are released to the grantee and the Company records the issuance of the shares. Restricted stock awards are valued based on the market price of the underlying shares on the grant date. Compensation expense is recognized on a straight-line basis over the requisite service period. At March 31, 2015, restricted stock awards had vesting periods up through March 2018.