Stock-based Compensation

9 Months Ended

Sep. 30, 2015

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

Stock-based Compensation

Stock-based Compensation

The Company has an 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. At September 30, 2015, 306,275 shares of common stock remained available for issuance of the 1,800,000 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. Stock options generally cliff vest after three years and have a contractual life of ten years. Stock options are granted with an exercise price equal to the fair market value of the shares at the date of grant. 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.

Restricted Stock Units

RSU activity for the nine months ended September 30, 2015 is summarized as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2014	179,936		$	143.25
Granted	116,295		$	134.46
Forfeited	(493	)	$	175.16
Settled	(87,410	)	$	102.00
Outstanding at September 30, 2015	208,328		$	155.57

For the nine months ended September 30, 2015 and 2014, a total of 37,488 and 50,952 RSUs, respectively, were withheld by the Company as a result of net share settlements to settle minimum employee tax withholding obligations. The Company paid $5.1 million and $9.5 million for the nine months ended September 30, 2015 and 2014, 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 nine months ended September 30, 2015 and 2014, the Company granted 33,632 and 30,101 RSUs, respectively, each of which contains two performance based metrics in addition to a service condition. The two 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 nine months ended September 30, 2015 and 2014, total stock-based compensation expense included $1.8 million and $0.9 million for these performance contingent RSUs, respectively.

The Company recognized total stock compensation expense of $2.7 million and $2.5 million, respectively, and $9.2 million and $7.0 million, respectively, for the three and nine months ended September 30, 2015 and 2014. As of September 30, 2015, unamortized stock-based compensation expense for unvested RSUs was $19.3 million, with a weighted-average remaining amortization period of 1.9 years.

Stock Options

Stock option activity for the nine months ended September 30, 2015 is summarized as follows:

	Number of Shares		Weighted Average Exercise Price
Outstanding at December 31, 2014	162,824		$	18.79
Granted	—		$	—
Exercised	(4,675	)	$	15.27
Forfeited	—		$	—
Outstanding at September 30, 2015	158,149		$	18.89