8.	Treasury Stock and Share Based Awards

Treasury Stock — Treasury stock represents shares of common stock repurchased or withheld by the Company and not yet retired. The Company has applied the cost method in recording its treasury shares. Below is a summary of the Company’s treasury stock activity for the nine months ended September 30, 2015:


	Number of Treasury Shares		Cost
Balance at January 1, 2015		4,057,135	$	61,807
Restricted stock withholdings ⁽¹⁾		108,472		4,770
Restricted stock forfeitures		14,158		—

Balance at September 30, 2015		4,179,765	$	66,577

⁽¹⁾

The Company withheld restricted shares as a result of the election by certain employees to satisfy their tax liabilities upon vesting in restricted stock and restricted stock units. The Company determined the number of shares to be withheld based upon market values ranging from $35.44 to $44.67 per share.

As of September 30, 2015, the Company had no plans to retire any shares of treasury stock.

Restricted Stock – During the nine months ended September 30, 2015, the Company granted 226,212 shares of restricted stock to directors and employees. The fair value of the restricted stock granted was determined based on the market value of the Company’s common stock on the dates of grant, which ranged from $40.75 to $43.28 per share. The Company assumed forfeiture rates ranging from 0% to 10% for the restricted stock awards. Restricted stock granted to the Company’s directors vests over one year. Restricted stock granted to employees vests over service periods that range from one year to four years. The recipients of restricted stock are entitled to receive dividends and to vote their respective shares, however, the sale and transfer of the restricted shares is prohibited during the restriction period.

Below is a summary of restricted stock activity for the nine months ended September 30, 2015:


	Shares of Restricted Stock			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2015		878,897		$	24.92
Granted		226,212		$	42.79
Vested		(328,532	)	$	23.71
Forfeited		(14,158	)	$	25.93

Outstanding at September 30, 2015		762,419		$	30.74

Unvested restricted stock at September 30, 2015		762,419		$	30.74


	Nine Months Ended September 30,
	2015		2014
Compensation expense recognized during the period	$	7,142	$	7,264
Fair value of restricted shares that vested during the period	$	10,291	$	18,571
Income tax deduction upon vesting of restricted stock awards	$	3,823	$	7,109

As of September 30, 2015, the estimated remaining unrecognized compensation expense related to restricted stock awards was $14,356 and the weighted average period over which this remaining compensation expense will be recognized is approximately two years.

Restricted Stock Units – During the nine months ended September 30, 2015, the Company granted restricted stock units representing 142,922 hypothetical shares of common stock to employees. The restricted stock units vest based on a combination of financial performance factors and continued service. The financial performance factors are based on an implied equity value concept that determines an internal rate of return (“IRR”) during the two fiscal year periods ending December 31, 2016 based on a formula utilizing a multiple of Adjusted EBITDA subject to certain specified adjustments as specified by the Compensation Committee prior to the grant date. The financial performance factors for the restricted stock units have a threshold, target and maximum level of payment opportunity and vest on a prorata basis according to the IRR achieved by the Company during the performance period. If the IRR for the two-year period is at least 7.5%, which is the threshold, one-third of the restricted stock units vest. If the IRR for the two-year period is at least 9.5%, which is the target, two-thirds of the restricted stock units vest. If the IRR for the two-year period is at least 11.5%, which is the maximum, 100% of the restricted stock units vest. Grantees are eligible to receive a ratable portion of the common stock issuable if the IRR is within the targets previously noted. All payouts of restricted stock units that vest will be subject to an additional two-year service requirement and will be paid in the form of common stock if the participant continues to provide services through March 2019, which is the fourth anniversary of the grant date. Restricted stock unit award participants are eligible to receive dividend equivalent payments from the grant date if, and at the time that, the restricted stock unit awards vest.

Below is a table summarizing the potential number of shares that could vest under restricted stock unit awards granted during the nine months ended September 30, 2015 at each of the three target levels of financial performance (excluding forfeiture assumptions):


	Number of Shares Vesting		Value at Grant
at IRR of at least 7.5%		47,640	$	2,057
at IRR of at least 9.5%		95,282	$	4,115
at IRR of at least 11.5%		142,922	$	6,173

Due to the fact that the IRR for the two-year performance period could not be determined at the time of grant, the Company estimated that the most likely outcome is the achievement of the mid-point IRR level. The fair value of the restricted stock unit awards was determined based on the market value of the Company’s common stock on the dates of grant, which ranged from $40.75 to $43.28 per share. The Company assumed forfeiture rates ranging from 0% to 5% for the restricted stock unit awards. If during the service period, additional information becomes available to lead the Company to believe a different IRR level will be achieved for the two-year performance period, the Company will reassess the number of units that will vest for the grant and adjust its compensation expense accordingly on a prospective basis over the remaining service period.


	Nine Months Ended September 30,
	2015		2014
Number of restricted stock unit awards that vested during the period		123,769		392,238
Fair value of restricted stock unit awards that vested during the period	$	5,483	$	11,312
Accumulated dividends paid upon vesting of restricted stock unit awards	$	442	$	1,341
Income tax benefit recognized upon vesting of restricted stock unit awards	$	2,303	$	4,751
Compensation expense recognized during the period	$	2,708	$	2,300

As of September 30, 2015, the estimated remaining unrecognized compensation expense related to the outstanding restricted stock unit awards was $6,040. The weighted average period over which this remaining compensation expense will be recognized is approximately two years. As of September 30, 2015, the Company had restricted stock units outstanding that represented a total of 544,081 hypothetical shares of common stock, net of actual cumulative forfeitures of 19,934 units, assuming an IRR of 11.1% was reached for the 2012 grant and the maximum IRR level is achieved for each of the 2013, 2014, and 2015 grants.