Stock-based Compensation

6 Months Ended

Jun. 30, 2016

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

Stock-based Compensation

Stock-based Compensation

The Company has an Amended and Restated Omnibus Incentive and Equity Plan (the “Plan”) under which officers, employees and directors may be granted equity-based awards, including restricted stock units (“RSUs”), stock options and unrestricted shares of common stock. On May 25, 2016, the shareholders of the Company approved an amendment to the Plan which increased the number of shares of common stock available under the Plan by 600,000, bringing the total number of authorized shares to 2,400,000. At June 30, 2016, 767,213 shares of common stock remained available for issuance of the 2,400,000 shares that were reserved for issuance under the Plan.

Each RSU entitles the holder to one share of common stock when the restriction expires. RSUs generally have a term of one to three years and may be time-vested or performance-contingent. The fair value of each RSU is estimated using the intrinsic value method, which is based on the fair market value price on the date of grant unless it contains a performance metric that is considered a market condition. RSUs that contain a market condition are valued using a simulation valuation model. Shares that are issued upon exercise of stock options and vesting of RSUs are newly issued shares from the Plan and are not issued from treasury stock. Stock options generally cliff vest after three years and have a contractual life of 10 years. Stock options are granted with an exercise price equal to the fair market value of the shares at the date of grant.

Restricted Stock Units

RSU activity for the six months ended June 30, 2016 is summarized as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2015	191,617		$	156.66
Granted	149,989		$	75.22
Forfeited	(1,193	)	$	127.42
Settled	(50,773	)	$	170.75
Outstanding at June 30, 2016	289,640		$	112.14

For the six months ended June 30, 2016 and 2015, a total of 17,333 and 35,486 RSUs, respectively, were withheld by the Company as a result of net share settlements to settle minimum employee tax withholding obligations. The Company paid $1.3 million and $4.8 million for the six months ended June 30, 2016 and 2015, respectively, in minimum employee tax withholding obligations related to RSUs withheld. These net share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have been otherwise issued as a result of the vesting.

During the six months ended June 30, 2016, the Company granted 33,244 RSUs which contain performance based metrics in addition to a service condition. The performance metrics are based on the Company’s growth in operating income, as adjusted, relative to peers, over a one-year period and total shareholder return (“TSR”) relative to peers over a three-year period. For the six months ended June 30, 2016, total stock-based compensation expense included $0.1 million for these performance contingent RSUs.

The Company recognized total stock compensation expense of $3.4 million and $6.7 million, respectively, for the three and six months ended June 30, 2016 and $3.4 million and $6.4 million, respectively, for the three and six months ended June 30, 2015. As of June 30, 2016, unamortized stock-based compensation expense for unvested RSUs was $17.6 million, with a weighted-average remaining amortization period of 1.8 years.

Stock Options

Stock option activity for the six months ended June 30, 2016 is summarized as follows:

	Number of Shares		Weighted Average Exercise Price
Outstanding at December 31, 2015	156,636		$	18.78
Granted	—		$	—
Exercised	(11,417	)	$	34.97
Forfeited	—		$	—
Outstanding at June 30, 2016	145,219		$	17.51