(12) Share-Based Compensation

We have historically awarded stock options and restricted stock awards for employees and non-employee directors as a means of attracting and retaining quality personnel and to align employee performance with stockholder value. Share-based compensation plans are approved by our stockholders and administered by the stock compensation committee of the Company’s Board of Directors (the “Board”). The current plan allows for a variety of equity programs designed to provide flexibility in implementing equity and cash awards, including incentive stock options, nonqualified stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance stock, performance units and other stock-based awards. Participants may be granted any one of the equity awards or any combination. We do not award stock options with an exercise price below the market price of the underlying securities on the date of grant. As of September 30, 2018, 1.6 million shares are available for future grants, assuming performance-based awards vest at their target amount. Generally, stock options have contractual terms of ten years. Expense related to performance-based awards is recognized based upon anticipated attainment.

The following table summarizes the Company’s share-based compensation for the three and nine months ended September 30:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
	(In thousands)
Share-based compensation expense included in:
Rental, selling and general expenses	$	2,230	$	2,071	$	7,503	$	5,890
Restructuring expenses		—		—		363		—
Total share-based compensation	$	2,230	$	2,071	$	7,866	$	5,890

During the nine months ended September 30, 2017, the final vesting dates were accelerated for certain share-based compensation awards to an executive departing the Company. The vesting dates were adjusted to correspond to the executive’s departure date, resulting in expense of $0.2 million in the quarter ended September 30, 2017 and a total of $1.2 million in the nine month period ended September 30, 2017. The expense related to the acceleration is included in rental, selling and general expenses in the condensed consolidated statements of operations for the three and nine months ended September 30, 2017.

As of September 30, 2018, total unrecognized compensation cost related to stock option awards assuming achievement at target was approximately $0.8 million and the related weighted-average period over which it is expected to be recognized is approximately 0.7 years. As of September 30, 2018, the unrecognized compensation cost related to restricted stock awards assuming achievement at target was approximately $8.2 million, which is expected to be recognized over a weighted-average period of approximately 1.9 years.

Stock Options. The fair value of each stock option award is estimated on the date of the grant using the Black-Scholes-Merton option pricing model which requires the input of assumptions. We estimate the risk-free interest rate based on the U.S. Treasury security rate in effect at the time of the grant. The expected life of the options, volatility and dividend rates are estimated based on our historical data. No new stock options were issued in 2018. The following are the key assumptions used for the nine-month period ended September 30, 2017:

Risk-free interest rate		1.7% - 1.9%
Expected life of the options (years)		5
Expected stock price volatility		33.4% - 35.4%
Expected dividend rate		2.8% - 3.1%

The following table summarizes stock option activity for the nine months ended September 30, 2018:

	Number of Shares			Weighted Average Exercise Price
	(In thousands)
Options outstanding, beginning of period		3,169		$	32.49
Additional options granted based upon achievement of specified performance criteria		81			32.42
Canceled/Expired		(174	)		27.75
Exercised		(118	)		30.86
Options outstanding, end of period		2,958			32.70

The beginning balance of options outstanding in the table above includes approximately 0.7 million unvested performance-based stock options granted in 2017 and 2016, for which the targets were set at the time of the grant. For options granted in both 2017 and 2016, vesting conditions were related to the Company’s return on capital employed.

Certain options granted in 2017 vested contingent upon 2017 performance targets. Actual performance exceeded targets for these shares. As a result, in the first quarter of 2018, in addition to the target options included in the beginning balance, additional options were vested. Certain options granted in 2016 also vested contingent upon 2017 performance targets. Actual performance did not achieve the minimum vesting requirements for these shares. As a result, shares totaling 0.1 million are included in the canceled/expired shares in the above table.

Included in the options outstanding at the end of the period are approximately 0.5 million of unvested performance-based stock options granted in 2017 and 2016 for which the performance criteria relates to fiscal years 2018 and 2019. These stock options are included in the table at the target amount; however, the terms of these awards provide that the number of options that ultimately vest may vary between 50% and 200% of the target award, or may be zero.

A summary of stock options outstanding as of September 30, 2018 is as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms		Aggregate Intrinsic Value
	(In thousands)				(In years)		(In thousands)
Outstanding		2,958	$	32.70		5.29	$	33,534
Exercisable		2,593		33.01		4.90		28,662

The aggregate intrinsic value of options exercised during the nine months ended September 30, 2018 was approximately $1.4 million.

Restricted Stock Awards. The fair value of restricted stock awards is estimated as the closing price of our common stock on the date of grant. A summary of restricted stock award activity is as follows:

	Shares			Weighted Average Grant Date Fair Value
	(In thousands)
Restricted stock awards at beginning of period		234		$	31.42
Awarded		225			38.45
Released		(106	)		34.30
Forfeited		(13	)		36.67
Restricted stock awards at end of period		340			34.99

Included in the restricted stock awarded in 2018 are 0.1 million shares that vest based upon the achievement of specified performance criteria related to fiscal years 2018, 2019 and 2020. Such awards have been granted assuming a target number of shares. However, the terms of these awards provide that the number of shares that ultimately vest may vary between 50% and 200% of the target award, or may be zero. The table presents the awards at their target amount.

The restricted stock awards that vested during the nine months ended September 30, 2018 had an aggregate grant date fair value of $3.6 million and an aggregate vesting date fair value of $4.3 million.