Options and Awards

3 Months Ended

Mar. 31, 2019

Options and Awards [Abstract]

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

OPTIONS AND AWARDS

Stock-based compensation expense consists of share-based payment awards made to employees and directors, including employee stock options and restricted stock awards, based on estimated fair values. As stock-based compensation expense recognized in the Company’s condensed consolidated statements of income for the three months ended March 31, 2019 and 2018 was based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The Company estimates forfeitures at the time of grant and, if necessary, revises the estimate in subsequent periods if actual forfeitures differ.

Stock Options

2017 Omnibus Incentive Plan - The Company has one active stock incentive plan, the 2017 Omnibus Incentive Plan (the 2017 Plan). The 2017 Plan provides for the issuance of 6,881 shares of common stock. The number of shares available to be issued under the 2017 Plan will be reduced by (i) one share for each share that relates to an option or stock appreciation right award and (ii) 2.5 shares for each share which relates to an award other than a stock option or stock appreciation right award (a full-value award). Granted non-employee director options vest and become exercisable in three equal annual installments, or the length of the term if less than three years, on the completion of each year of service measured from the grant date. All other options generally vest over 5 years at 20% per year on the anniversary of the grant date. Options expire 10 years from the date of grant. At March 31, 2019, there were 4,379 unissued shares of common stock available for issuance under this plan.

The Company uses the Black-Scholes option-pricing model to recognize the value of stock-based compensation expense for all share-based payment awards. Determining the appropriate fair-value model and calculating the fair value of stock-based awards at the grant date requires considerable judgment, including estimating stock price volatility, expected option life and forfeiture rates. The Company develops estimates based on historical data and market information, which can change significantly over time. The Company granted 141 options and 105 restricted stock awards from the 2017 Plan during the three months ended March 31, 2019.

The Company used the following assumptions for stock options granted during the three months ended March 31, 2019 and 2018:

Grant Year	Options Granted	Weighted Average Risk-Free Rate	Expected Life	Weighted Average Volatility	Weighted Average Dividend Yield
2019	141	2.5%	6.3 years	33.6%	0.3%
2018	168	2.7%	6.2 years	32.0%	0.7%

For the three months ended March 31, 2019 and 2018, the following represents the exercise price and fair value displayed at grant date for stock option grants:

Grant Year	Granted	Weighted Average Exercise Price		Weighted Average Fair Value of Options
2019	141	$	53.99	$	19.70
2018	168	$	26.53	$	9.01

The weighted average exercise price equaled the weighted average fair value of common stock on the grant date for all options granted during the periods ended March 31, 2019 and 2018 and therefore, the intrinsic value was $0 at the date of grant.

The following table represents the employee stock option activity during the three months ended March 31, 2019 and 2018:

	Number of Options Outstanding		Weighted Average Exercise Price		Number of Options Vested	Weighted Average Exercise Price of Options Vested
January 1, 2019	4,188		$	17.35	2,431	$	12.37
Granted	141		53.99
Forfeited	(13	)	25.63
Exercised	(274	)	8.52
March 31, 2019	4,042		$	19.20	2,345	$	13.22

The following summary information reflects stock options outstanding, vested and related details as of March 31, 2019:

	Stock Options Outstanding							Stock Options Vested
				Number Outstanding	Black-Scholes Fair Value		Remaining Contractual Life (Years)	Vested and Exercisable
Year of Grant	Exercise Price
2009	4.06	-	4.56	67	$	140	0	67
2010	4.77	-	4.96	65	158		1	65
2011	5.90	-	7.99	81	278		2	81
2012	6.56	-	7.96	234	863		3	234
2013	7.98	-	11.49	390	1,888		4	390
2014	10.55	-	18.94	1,161	6,571		5	924
2015	21.47	-	25.24	465	4,225		6	286
2016	18.79	-	19.89	395	2,754		7	170
2017	18.64	-	22.90	427	2,985		8	98
2018	26.53	-	38.59	616	7,453		9	30
2019	53.99			141	2,786		10	—
Total				4,042	$	30,101		2,345

Restricted Stock Awards

The Company granted 105 and 57 restricted stock awards during the three months ended March 31, 2019 and 2018, respectively. All awards were granted at an issued price of $0 and generally vest over five years. The fair value per share of restricted awards granted during the three months ended March 31, 2019 and 2018 ranged from $41.68 to $53.99 and $23.61 to $27.70 respectively. The fair value per share includes quarterly stock awards to non-employee directors.

A summary of the status of the Company's non-vested restricted stock awards as of March 31, 2019 and changes during the three months ended March 31, 2019 is presented below:

	Non-Vested Restricted Awards		Weighted Average Grant Date Fair Value
Nonvested at January 1, 2019	573		$	29.31
Granted	105		51.15
Vested	(97	)	42.62
Forfeited	(3	)	26.43
Nonvested at March 31, 2019	578		$	31.06

During the three months ended March 31, 2019, the Company granted 7 automatic quarterly stock awards to non-employee directors for their service on the Company's board of directors. The fair value per share of these stock awards was $41.68 based on the market price on the grant date.

Share-based compensation expense recognized for the Company's equity incentive plans for the three months ended March 31, 2019 and 2018 was as follows:

	Three Months Ended March 31,
	2019		2018
Share-based compensation expense related to stock options	$	1,343	$	1,216
Share-based compensation expense related to restricted stock awards	998		578
Share-based compensation expense related to stock options and restricted stock awards to non-employee directors	271		177
Total	$	2,612	$	1,971

In future periods, the Company expects to recognize approximately $14,429 and $15,747 in share-based compensation expense for unvested options and unvested restricted stock awards, respectively, that were outstanding as of March 31, 2019. Future share-based compensation expense will be recognized over 3.7 and 3.9 weighted average years for unvested options and restricted stock awards, respectively. There were 1,697 unvested and outstanding options at March 31, 2019, of which 1,593 are expected to vest. The weighted average contractual life for options outstanding, vested and expected to vest at March 31, 2019 was 6.0 years.

The aggregate intrinsic value of options outstanding, vested, expected to vest and exercised as of and for the three months ended March 31, 2019 and December 31, 2018 is as follows:

Options	March 31, 2019		December 31, 2018
Outstanding	$	129,719	$	89,806
Vested	89,050		64,222
Expected to vest	35,864		22,963
Exercisable	10,419		27,646

The intrinsic value is calculated as the difference between the market value of the underlying common stock and the exercise price of the options.

Equity Instrument Denominated in the Shares of a Subsidiary

On May 26, 2016, the Company implemented a management equity plan and granted stock options and restricted stock awards of a subsidiary of the Company to employees and management of that subsidiary (Subsidiary Equity Plan). The Company did not grant any new restricted shares during the three months ended March 31, 2019 and 2018. These awards generally vest over a period of three to five years, or upon the occurrence of certain prescribed events. During the three months ended March 31, 2019 and 2018, there were no restricted stock awards that vested for both periods.

The Company did not grant any new stock options during the three months ended March 31, 2019 and 2018. The value of the stock options and restricted stock awards is tied to the value of the common stock of the subsidiary. The awards can be put to the Company at various prescribed dates, which in no event is earlier than six months after vesting of the restricted awards or exercise of the stock options. The Company can also call the awards, generally upon employee termination.

The grant-date fair value of the awards is recognized as compensation expense over the relevant vesting periods, with a corresponding adjustment to noncontrolling interests. The grant value was determined based on an independent valuation of the subsidiary shares. For the three months ended March 31, 2019 and 2018, the Company expensed $341 and $338 , respectively, in share-based compensation related to the Subsidiary Equity Plan.

The aggregate number of the Company's common shares that would be required to settle these awards at current estimated fair values, including vested and unvested awards, at March 31, 2019 and 2018 is 164 and 223, respectively.