Stock-Based Compensation

The Company recognizes compensation expense for all share-based payments granted based on the grant-date fair value estimated in accordance with the provisions of ASC 718-10. Compensation expense is recognized on a straight-line basis over the options’ or other awards’ estimated lives for fixed awards with ratable vesting provisions.

Under the Company’s 2012 Incentive Plan (“2012 Plan”), the Company's principal stock compensation plan as of May 9, 2012, the Company reserved up to a maximum of 3,200 shares of common stock for issuance upon the grant or exercise of stock options, restricted stock, restricted stock units (“RSUs”) and other types of awards, to directors and key employees through December 31, 2022. Option awards are granted with an exercise price equal to the market price of the Company’s common stock on the date of the grant and generally vest between three and five years with a 10-year contractual term. Restricted stock and RSUs are granted with a price equal to the market price of the Company’s common stock on the date of the grant and generally vest between three and five years.

Stock Option Plans

Additional information relating to the Company’s stock option plans follows:



	2014			2013		2012
Options outstanding at beginning of year	425			995		1,305
Options granted	—			—		83
Options exercised	(108		)	(561	)	(277	)
Options forfeited and expired	(19		)	(9	)	(116	)
Options outstanding at end of year	298			425		995
Options exercisable at end of year	257			343		814
Option prices per share:
Options granted during the year	$	—		—		66.14
Options exercised during the year	$ 28.37-93.65			28.37-93.65		28.37-88.33
Options forfeited and expired during the year	$ 46.80-93.65			48.50-88.33		46.80-93.65
Options outstanding at end of year	$ 28.37-93.65			28.37-93.65		28.37-93.65
Options exercisable at end of year	$ 28.37-93.65			28.37-93.65		28.37-93.65

During 2014, 2013 and 2012, a total of 0, 3 and 2 shares, respectively, were awarded to the non-employee directors in lieu of cash for their annual retainers.

The Company’s Board of Directors has authorized the repurchase of up to 15,000 shares of the Company’s outstanding common stock. For the year ended December 31, 2014, the Company repurchased approximately 2 shares at an average price of $139.92 in connection with the the exercise of stock options under the Company's 2012 Incentive Plan. The Company’s purchased common stock for the years ended December 31, 2013 and 2012, of 1 and no shares, respectively. Since the inception of the program, a total of approximately 11,521 shares have been repurchased at an aggregate cost of approximately $335,455. All of these repurchases have been financed through the Company’s operations and banking arrangements.

The fair value of option awards is estimated on the date of grant using the Black-Scholes-Merton valuation model that uses the assumptions noted in the following table. Expected volatility is based on the historical volatility of the Company’s common stock and other factors. The Company uses historical data to estimate option exercise and forfeiture rates within the valuation model. Optionees that exhibit similar option exercise behavior are segregated into separate groups within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate is based on U.S. Treasury yields in effect at the time of the grant for the expected term of the award.



	2014		2013		2012
Dividend yield	—	%	—	%	—	%
Risk-free interest rate	—	%	—	%	1.0	%
Volatility	—	%	—	%	47.1	%
Expected life (years)	0		0		5

A summary of the Company’s options under the 2002, 2007 and 2012 Plans as of December 31, 2014, and changes during the year then ended is presented as follows:



	Shares		Weighted average exercise price		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Options outstanding, December 31, 2013	425		$	71.50
Granted	—		—
Exercised	(108	)	79.04
Forfeited and expired	(19	)	73.37
Options outstanding, December 31, 2014	298		$	68.63	4.2	$	25,803
Vested and expected to vest as of December 31, 2014	297		$	68.64	4.2	$	25,772
Exercisable as of December 31, 2014	257		$	69.24	3.7	$	22,140

The weighted-average grant-date fair value of an option granted during 2014, 2013 and 2012 was $0, $0 and $28.71, respectively. The total intrinsic value of options exercised during the years ended December 31, 2014, 2013, and 2012 was $6,613, $20,101 and $4,226, respectively. Total compensation expense recognized for the years ended December 31, 2014, 2013 and 2012 was $865 ($548, net of tax), $1,366 ($865, net of tax) and $2,176 ($1,378, net of tax), respectively, which was allocated to selling, general and administrative expenses. The remaining unamortized expense for non-vested compensation expense as of December 31, 2014 was $205 with a weighted average remaining life of 0.4 years.

The following table summarizes information about the Company’s stock options outstanding as of December 31, 2014:



	Outstanding				Exercisable
Exercise price range	Number of shares	Average life	Average price		Number of shares	Average price
Under $46.80	29,412	4.6	$	37.18	28,412	$	36.85
$57.34-$57.34	64,495	6.2	57.34		60,495	57.34
$66.14-$66.14	79,338	7.1	66.14		43,893	66.14
$74.47-$75.10	13,750	3.0	74.57		13,750	74.57
$81.90-$81.90	50,000	0.9	81.90		50,000	81.90
$83.12-$83.90	27,200	1.1	83.48		27,200	83.48
$86.51-$86.51	500	1.2	86.51		500	86.51
$83.12-$88.33	23,575	0.2	88.33		23,575	88.33
$89.46-$89.46	500	0.5	89.46		500	89.46
$93.65-$93.65	8,750	2.1	93.65		8,750	93.65
Total	297,520	4.2	$	68.63	257,075	$	69.24

Restricted Stock Plans

A summary of the Company’s RSUs under the 2007 and 2012 Plans as of December 31, 2014, and changes during the year then ended is presented as follows:



	Shares		Weighted average price		Weighted average remaining contractual term (years)	Aggregate intrinsic value
Restricted Stock Units outstanding, December 31, 2013	733		$	78.62
Granted	189		144.75
Released	(189	)	143.89
Forfeited	(8	)	51.32
Restricted Stock Units outstanding, December 31, 2014	725		$	77.84	1.8	$	112,574
Expected to vest as of December 31, 2014	691				1.7	$	107,322

The Company recognized stock-based compensation costs related to the issuance of RSUs of $27,096 ($17,165, net of taxes), $16,945 ($10,735, net of taxes) and $11,887 ($7,530, net of taxes) for the years ended December 31, 2014, 2013 and 2012, respectively, which has been allocated to selling, general and administrative expenses. Pre-tax unrecognized compensation expense for unvested RSUs granted to employees, net of estimated forfeitures, was $29,738 as of December 31, 2014, and will be recognized as expense over a weighted-average period of approximately 2.17 years.

Additional information relating to the Company’s RSUs under the 2007 and 2012 Plans is as follows:



	2014		2013		2012
Restricted Stock Units outstanding, January 1	733		605		495
Granted	189		301		260
Released	(189	)	(152	)	(140	)
Forfeited	(8	)	(21	)	(10	)
Restricted Stock Units outstanding, December 31	725		733		605
Expected to vest as of December 31	691		683		551