Stock-Based Compensation

3 Months Ended

Mar. 31, 2016

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

Stock-Based Compensation

Stock-Based Compensation

Stock Options and Grants

There were no stock options granted during the three months ended March 31, 2016 and 2015. The Company recognized no stock-based compensation expense related to stock options for the three months ended March 31, 2016 and 2015, as all stock options previously granted were fully vested. As of March 31, 2016, there were no unrecognized compensation costs related to unvested stock options.

Restricted Stock Units

During the three months ended March 31, 2016, no restricted stock units were authorized by the Company. During the three months ended March 31, 2016 and 2015, no restricted stock units vested. During the three months ended March 31, 2016, 4,124 restricted stock units were forfeited under the amended and restated Long-Term Incentive Plan and became available for reissuance.

No restricted stock units were forfeited during the three months ended March 31, 2015.

The Company recognized $0.2 million and $0.4 million of stock-based compensation expense related to the restricted stock units for the three months ended March 31, 2016 and 2015, respectively, which is included in General and administrative expenses within the Condensed Consolidated Statements of Income. As of March 31, 2016, there was $2.5 million of unrecognized stock-based compensation costs, net of estimated forfeitures, related to the restricted stock units that are expected to be recognized over a weighted average remaining period of approximately 3.5 years.

Performance Share Units

In September 2014, the Board of Directors authorized a performance-based incentive program under the Company’s Long-Term Incentive Plan (“Performance-Based Incentive Program”), whereby the Company will issue performance share units to certain executive management individuals that represent shares potentially issuable in the future. The objective of the Performance-Based Incentive Program is to link compensation to business performance, encourage ownership of Company stock, retain executive talent, and reward executive performance. The Performance-Based Incentive Program provides participating executive management individuals with the opportunity to earn vested common stock if certain performance targets for pre-tax free cash flow are achieved over a three year performance period and recipients satisfy service-based vesting requirements. The stock-based compensation expense associated with unvested performance share units are recognized on a straight-line basis over the shorter of the vesting period or minimum service period and dependent upon the probable outcome of the number of shares that will ultimately be issued based on the achievement of pre-tax free cash flow over the cumulative three year period.  In March 2016, the Company granted 94,780 performance share units to certain individuals within executive management.  During the three months ended March 31, 2016 and 2015, 4,493 and nil, performance share units were forfeited under the amended and restated Long-Term Incentive Plan and became available for reissuance.  As of March 31, 2016, 16,602 shares were vested related to certain participating executives being eligible for retirement.

The Company recognized $0.4 million and $0.2 million of stock-based compensation expense related to the Performance-Based Incentive Program for the three months ended March 31, 2016 and 2015, respectively, and is included in General and administrative expenses within the Condensed Consolidated Statements of Income.  Future compensation expense for currently outstanding awards under the Performance Based Incentive Program could reach a maximum of $9.3 million. Stock-based compensation for the Performance-Based Incentive Program is expected to be recognized over a weighted average period of 2.1 years.