Stock-Based Compensation Plans

9 Months Ended

Sep. 30, 2015

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

Information with respect to stock options granted under the Company’s 1994 Stock Option and Incentive Plan (the “1994 Plan”) and its 2009 Stock Option and Incentive Plan (the “2009 Plan”) is as follows (dollars in thousands, other than per share amounts):



	2009 Plan shares		Weighted average exercise price per share		1994 Plan shares		Weighted average exercise price per share

Options Outstanding, December 31, 2014	340,062		$	122.67	272,402		$	104.96
Exercised	(54,719	)	121.70		(100,454	)	90.82
Forfeited	—		—		—		—
Options Outstanding, September 30, 2015	285,343		$	122.85	171,948		$	113.23
Options Exercisable, September 30, 2015	224,246		$	121.19	171,948		$	113.23

The Company granted 82,812 restricted stock units with an estimated aggregate compensation cost of $12,340,000, as part of its stock-based compensation plan, during the nine months ended September 30, 2015. The amount of restricted stock ultimately earned is based on the total shareholder return metrics related to the Company’s common stock for 53,164 restricted stock units and financial metrics related to operating performance and leverage metrics of the Company for 29,648 restricted stock units. For the portion of the grant for which the award is determined by the total shareholder return of the Company’s common stock, the Company used a Monte Carlo model to assess the compensation cost associated with the restricted stock units. The estimated compensation cost was derived using the following assumptions: baseline share value of $166.23; dividend yield of approximately 3.0%; estimated volatility figures ranging from 14.7% to 17.4% over the life of the plan for the Company using 50% historical volatility and 50% implied volatility; and risk free rates over the life of the plan ranging from 0.07% to 1.09%, resulting in an average estimated fair value per restricted stock unit of $139.18. For the portion of the grant for which the award is determined by financial metrics, the estimated compensation cost was based on the baseline share value of $166.23 and the Company's estimate of corporate achievement for the financial metrics.

During the nine months ended September 30, 2015, the Company also issued 157,779 shares of restricted stock, of which 95,826 shares related to the conversion of restricted stock units to restricted shares, and the remaining 61,953 shares were new grants with a fair value of $10,721,000, based on the share price at the grant date.

At September 30, 2015, the Company had 247,888 outstanding unvested restricted shares granted under the Company's restricted stock awards. Restricted stock vesting during the nine months ended September 30, 2015 totaled 98,602 shares, of which 7,907 shares related to the conversion of restricted stock units and 90,695 shares related to restricted stock awards, which had fair values at the grant date ranging from $115.83 to $149.05 per share. The total grant date fair value of shares vested under restricted stock awards was $11,497,000 and $11,143,000 for the nine months ended September 30, 2015 and 2014, respectively.

Total employee stock-based compensation cost recognized in income was $11,255,000 and $9,897,000 for the nine months ended September 30, 2015 and 2014, respectively, and total capitalized stock-based compensation cost was $7,738,000 and $4,635,000 for the nine months ended September 30, 2015 and 2014, respectively. At September 30, 2015, there was a total unrecognized compensation cost of $326,000 for unvested stock options and $25,191,000 for unvested restricted stock and restricted stock units, which does not include estimated forfeitures. The unrecognized compensation cost for unvested stock options and restricted stock and restricted stock units is expected to be recognized over a weighted average period of 0.4 years and 3.7 years, respectively.