11.

Stock-Based Compensation

The Company’s incentive compensation plans allow the Company to grant awards to certain employees in the form of stock options, stock awards, restricted stock units, stock appreciation rights, performance stock units, dividend equivalents and other awards. Compensation related to these awards is determined based on the fair value on the date of grant and is amortized to expense over the vesting period. The Company recognizes compensation expense based on the earlier of the vesting date or the date when the employee becomes eligible to retire without forfeiture of the award. If awards can be settled in cash, these awards are recorded as liabilities and marked to market.

The following table discloses the amount of stock-based compensation expense for the three-month period ended March 31, 2014 and 2015:


	Three Months Ended March 31,
	2014		2015
Stock options	$	1,014	$	1,053
Restricted stock units		156		1,259
Performance based units		266		327

Total stock based compensation	$	1,436	$	2,639

Stock Options

In February 2013, employees participating in the 2013-2015 Long-Term Incentive Plan were granted 330,639 stock options which vest one-third each year through February 2016. In February 2014, employees participating in the 2014-2016 Long-Term Incentive Plan were granted 380,064 stock options which vest one-third each year through February 2017. No stock options were granted in the quarter ended March 31, 2015.

The fair value of the options granted was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:


	2014
Risk-free interest rate		2.00	%
Dividend yield		1.8	%
Expected volatility of the Company’s common stock		0.640
Expected life in years		6.0

The weighted average fair value of options granted in 2014 was $12.26.

The following table provides details of the stock option activity for the three months ended March 31, 2015:


	Number of Shares
Outstanding at January 1, 2015		1,765,922
Granted		—
Exercised		(745,665	)
Expired		(11,159	)
Canceled		(52,597	)

Outstanding at March 31, 2015		956,501
Exercisable		627,107

Restricted Stock Units

In February 2015, employees participating in the 2015-2017 Long-Term Incentive Plan were granted 105,102 restricted stock units which vest one-third each year through February 2018. Compensation related to the restricted stock units granted is determined based on the fair value of the Company’s stock on the date of grant and is amortized to expense over the vesting period. The Company recognizes compensation expense based on the earlier of the vesting date or the date when the employee becomes eligible to retire without forfeiture of the award. The weighted average fair value of restricted stock units granted in 2015 was $36.78.

The following table provides details of the nonvested restricted stock unit activity for the three months ended March 31, 2015:


	Number of Restricted Stock Units
Nonvested at January 1, 2015		197,838
Granted		108,052
Vested		(22,139	)
Canceled		(15,101	)
Accrued dividend equivalents		797

Nonvested at March 31, 2015		269,447

Performance Stock Units

Employees participating in the Company’s Long-Term Incentive Plan for the plan year 2013 – 2015, earn performance stock units and cash. Any units and cash earned during 2013, 2014 and 2015 will vest at December 31, 2015.

Employees participating in the Company’s Long-Term Incentive Plan for the plan year 2014 – 2016, earn performance stock units and cash. Any units and cash earned during 2014 and 2015 will vest at December 31, 2016.

Employees participating in the Company’s Long-Term Incentive Plan for the plan year 2015 – 2017, earn performance stock units and cash. Any units and cash earned during 2015 will vest at December 31, 2017.

The following table provides details of the nonvested performance stock units under the Company’s Long-Term Incentive Plans:


	Number of Performance Stock Units
Performance stock units outstanding at January 1, 2015		83,515
Granted		114,385
Canceled		(7,234	)
Accrued dividend equivalents		246

Performance stock units outstanding at March 31, 2015		190,912

The Company’s restricted stock units and performance stock units are not participating securities. These units will be converted into shares of Company common stock in accordance with the distribution date indicated in the agreements. Restricted stock units earn dividend equivalents from the time of the award until distribution is made in common shares. Performance stock units earn dividend equivalents from the time the units have been earned based upon Company performance metrics, until distribution is made in common shares. Dividend equivalents are only earned subject to vesting of the underlying restricted stock units and performance stock units. Accordingly, such units do not represent participating securities.