Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

Stock-Based Compensation

Stock-Based Compensation

9. Stock-Based Compensation

Stock Options and Grants

There were no stock options granted during the three months ended March 31, 2015 and 2014. The Company recognized no stock-based compensation expense related to stock options for the three months ended March 31, 2015 and 2014, as all stock options previously granted were fully vested. As of March 31, 2015, there were no unrecognized compensation costs related to unvested stock options.

Restricted Stock Units

During the three months ended March 31, 2015, the Company authorized certain one-time grants of 3,963 restricted stock units to an executive that vest five years from date of issuance. During the three months ended March 31, 2015 and 2014, no restricted stock units vested. During the three months ended March 31, 2015 and 2014, no restricted stock units were forfeited under the amended and restated Long-Term Incentive Plan.

The Company recognized $403 and $796 of stock-based compensation expense related to the restricted stock units for the three months ended March 31, 2015 and 2014, respectively, which is included in General and Administrative Expenses within the Consolidated Statements of Income. As of March 31, 2015, there was $4,115 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 4.2 years.

Performance Based Stock

In September 2014, the Board of Directors authorized a performance-based incentive program under the Company’s Long-Term Incentive Plan (“2014 Performance-Based Incentive Program”). 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 2014 Performance-Based Incentive Program provides participating executives with the opportunity to earn vested common stock if certain performance targets for pre-tax free cash flow are achieved over the cumulative three year period of 2014 through 2016 and recipients satisfy service-based vesting requirements. The stock-based compensation expense associated with unvested performance-based incentives 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 of 2014 through 2016.

The Company recognized $162 of stock-based compensation expense related to the 2014 Performance-Based Incentive Program for the three months ended March 31, 2015 and is included in General and Administrative Expenses within the Consolidated Statements of Income. During the three months ended March 31, 2015, no performance-based shares were forfeited. There was no such program in place during the three months ended March 31, 2014. Future compensation expense for currently outstanding awards under the 2014 Performance Based Incentive Program could reach a maximum of $2,870. Stock-based compensation for the 2014 Performance-Based Incentive Program is expected to be recognized over a weighted average period of 1.8 years.