8.Stock-Based Compensation

Total stock-based compensation expense charged as a selling, general and administrative expense in our unaudited Consolidated Statements of Comprehensive Income related to our stock compensation plans was $3.1 million and $2.9 million for the three months ended September 30, 2015 and 2014, respectively, and $10.2 million and $9.1 million for the nine months ended September 30, 2015 and 2014, respectively.

Stock Options

Presented below is a summary of our stock option activity for the nine months ended September 30, 2015 (in thousands, except for weighted average exercise price and weighted average remaining contractual terms):

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms	Aggregate Intrinsic Value

Outstanding at December 31, 2014	4,101		$	18.72
Granted	1,274		16.67
Exercised	(578	)	7.25
Forfeited	(518	)	21.61
Expired	(317	)	24.75

Outstanding at September 30, 2015	3,962		18.88		4.82	$	1,794

Expected to vest at September 30, 2015	2,410		19.48		5.91	—
Exercisable at September 30, 2015	1,498		$	17.87	3.03	$	1,794

For awards subject to service-based vesting conditions, we recognize stock-based compensation expense, net of estimated forfeitures, equal to the grant date fair value of stock options on a straight-line basis over the requisite service period, which is generally the vesting term. For awards subject to both performance and service-based vesting conditions, we recognize stock-based compensation expense using the straight-line recognition method when it is probable that the performance condition will be achieved. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The fair value of each option grant with service-based vesting conditions was estimated using a Black-Scholes option-pricing valuation model. The performance share awards granted in 2014 and 2015 are market condition awards as attainment is based on the performance of our common stock for the relevant performance period. These awards were valued on the date of grant using a Monte Carlo simulation model.

Expected volatilities are calculated based on the historical volatility of our common stock. Management monitors stock option exercises and employee termination patterns to estimate forfeiture rates within the valuation model. Separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected holding period of options represents the period of time that options granted are expected to be outstanding. The expected terms of options granted are based on our historical experience for similar types of stock option awards. The risk-free interest rate is based on U.S. Treasury Notes.

The weighted average grant-date fair value per share of the stock options granted during the three months ended September 30, 2015 and 2014 was $3.80 and $7.24, respectively. We estimated the fair value of each stock option grant on the date of grant using a Black-Scholes option-pricing valuation model and the weighted-average assumptions set forth in the following table:

	Nine months ended September 30,
	2015	2014
Expected dividend yield	—	—
Risk-free interest rate	1.55%	1.56%
Expected volatility	41.77%	38.11%
Expected life	4.90 years	4.81 years

During the three months ended September 30, 2015 and 2014, we issued 105,462 shares and 36,016 shares, respectively, of our common stock upon the exercise of outstanding stock options and received proceeds of $0.8 million and $0.1 million, respectively.

For the three months ended September 30, 2015 and 2014, stock-based compensation expense for stock options was $1.4 million and $1.7 million, respectively.

We recognized excess income tax benefit of approximately $21,000 and $17,000 from the exercise of stock options in our unaudited Consolidated Statement of Shareholders’ Equity for the three months ended September 30, 2015 and 2014, respectively.

During the nine months ended September 30, 2015 and 2014, we issued 577,559 shares and 352,057 shares, respectively, of our common stock upon the exercise of outstanding stock options and received proceeds of $4.2 million and $3.3 million, respectively.

For the nine months ended September 30, 2015 and 2014, stock-based compensation expense for stock options was $4.5 million and $5.3 million, respectively.

We recognized excess income tax benefit of $1.5 million and $0.9 million from the exercise of stock options in our unaudited Consolidated Statement of Shareholders’ Equity for the nine months ended September 30, 2015 and 2014, respectively.

As of September 30, 2015, there was $11.1 million of total unrecognized compensation cost, adjusted for estimated forfeitures, related to stock options outstanding, which is expected to be recognized over a weighted-average period of 1.16 years.

The total intrinsic value of options exercised (the difference in the market price of our common stock on the exercise date and the price paid by the optionees to exercise the options) for the three months ended September 30, 2015 and 2014 was $0.2 million and $0.6 million, respectively.

The total intrinsic value of options exercised for the nine months ended September 30, 2015 and 2014 was $5.9 million and $3.9 million, respectively.

Restricted Stock Units

Our non-employee members of our Board of Directors and certain employees have received restricted stock units under the Fourth Amended and Restated 2006 Stock Plan (the “2006 Stock Plan”). The fair value of restricted stock units is estimated based on the closing sale price of our common stock on the NASDAQ Global Select Market on the date of issuance. The total number of restricted stock units expected to vest is adjusted by estimated forfeiture rates. Shares withheld to pay taxes upon the vesting of restricted stock units are retired.

For the three months ended September 30, 2015, we granted 5,642 restricted stock units with an aggregate fair market value of approximately $49,000. For the three months ended September 30, 2014, we granted 14,518 restricted stock units with an aggregate fair market value of $0.3 million.

For the three months ended September 30, 2015 and 2014, stock-based compensation expense for restricted stock units was $1.7 million and $1.2 million, respectively.

For the nine months ended September 30, 2015, we granted 665,326 restricted stock units with an aggregate fair market value of $11.1 million. For the nine months ended September 30, 2014, we granted 261,282 restricted stock units with an aggregate fair market value of $5.3 million.

For the nine months ended September 30, 2015 and 2014, stock-based compensation expense for restricted stock units was $5.7 million and $3.7 million, respectively.

At September 30, 2015, 1,240,052 restricted stock units remained unvested and there was $15.8 million of unamortized compensation cost related to these restricted stock units, which is expected to be recognized over the remaining weighted-average vesting period of 1.29 years.

A summary of the status of our restricted stock units and of changes in restricted stock units outstanding under the 2006 Stock Plan for the nine months ended September 30, 2015 is as follows (in thousands, except for weighted average grant date fair value per unit):

	Number of Units		Weighted Average Grant Date Fair Value per Unit
Outstanding balance at December 31, 2014	910		$	22.84
Granted	665		16.69
Vesting of restricted stock units, net of shares withheld for taxes	(97	)	24.00
Shares withheld for taxes	(37	)	24.00
Forfeitures	(201	)	21.91

Outstanding balance at September 30, 2015	1,240		$	19.56

Restricted Stock Awards

We did not issue restricted stock awards during the three and nine months ended September 30, 2015 and 2014. There was no stock-based compensation expense related to previously granted stock awards for the nine months ended September 30, 2015. Stock-based compensation expense related to previously granted restricted stock awards was $0.1 million for the nine months ended September 30, 2014, which was recorded in the first quarter of 2014.