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, 2017:

	Number of
	Treasury
	Shares		Cost
Balance at January 1, 2017		4,447,002	$	73,411
Restricted stock withholdings ⁽¹⁾		68,523		2,943
Restricted stock forfeitures		9,550		—
Balance at September 30, 2017		4,525,075	$	76,354

(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 $33.36 to $44.44 per share.

As of September 30, 2017, the Company had no plans to retire any shares of treasury stock.

Restricted Stock – During the nine months ended September 30, 2017, the Company granted 237,933 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 $38.65 to $42.37 per share. The Company assumed forfeiture rates that ranged from 0% to 10% for the restricted stock awards. The restricted stock granted to directors vests over a one year service period. The restricted stock granted to employees vests over a four year service period. The recipients of restricted stock are entitled to receive non-forfeitable 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, 2017:

	Shares of			Weighted Average
	Restricted			Grant Date
	Stock			Fair Value
Outstanding at January 1, 2017		606,618		$	33.51
Granted		237,933		$	41.94
Vested		(192,152	)	$	36.26
Forfeited		(9,550	)	$	33.00
Outstanding at September 30, 2017		642,849		$	35.82
Unvested restricted stock at September 30, 2017		642,849		$	35.82

	Nine Months Ended September 30,
	2017		2016
Compensation expense recognized during the period	$	6,298	$	6,551
Fair value of restricted shares that vested during the period	$	8,169	$	14,662
Income tax benefit recognized upon vesting of restricted stock awards	$	2,665	$	5,555

As of September 30, 2017, the estimated remaining unrecognized compensation expense related to unvested restricted stock awards was $15,335 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, 2017, the Company granted restricted stock units representing 175,634 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, 2018 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%, which is the threshold, one-third of the maximum 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 maximum restricted stock units vest. If the IRR for the two-year period is at least 13%, which is the maximum, 100% of the maximum 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. Further, as an example, if the Company achieves an IRR equal to 11%, the number of restricted stock units that shall vest will be greater than the target but less than the maximum number that would have vested had the Company achieved the highest IRR. All restricted stock units granted during 2017 will vest 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 February 2021, 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, 2017 at each of the three target levels of financial performance (excluding forfeiture assumptions):

	Number of
	Shares		Value at
	Vesting		Grant
at IRR of at least 7%		58,545	$	2,481
at IRR of at least 9.5%		117,089	$	4,961
at IRR of at least 13%		175,634	$	7,442

Due to the fact that the IRR for the two-year performance period could not be determined at the time of the 2017 grant, the Company estimated that the most likely outcome is the achievement of the target IRR level. The fair value of the restricted stock unit awards was determined based on the closing price of the Company’s common stock on the date of grant, which was $42.37 per share. The Company assumed a forfeiture rate of 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,
	2017		2016
Number of restricted stock unit awards that vested during the period		97,115		213,984
Fair value of restricted stock unit awards that vested during the period	$	4,155	$	7,260
Accumulated dividends paid upon vesting of restricted stock unit awards	$	313	$	662
Compensation expense recognized during the period	$	3,189	$	3,696
Income tax benefit recognized upon vesting of restricted stock unit awards	$	1,745	$	3,049

As of September 30, 2017, the estimated remaining unrecognized compensation expense related to the outstanding restricted stock unit awards was $8,314. The weighted average period over which this remaining compensation expense will be recognized is approximately two years. As of September 30, 2017, the Company had restricted stock units outstanding that represented a total of 628,189 hypothetical shares of common stock, net of actual cumulative forfeitures of 7,407 units, assuming the maximum IRR level is achieved for all grants outstanding.