Stock-Based Compensation

9 Months Ended

Sep. 30, 2015

12. STOCK-BASED COMPENSATION

The Company applies the provisions of FASB ASC 718, “Compensation – Stock Compensation,” to account for the Company’s share-based compensation. Share-based compensation cost is measured at the grant date based on the calculated fair value of the award and is recognized over the employees’ requisite service period. The Company recorded stock compensation expense of ($514) and $604 for the three-month periods ended September 30, 2015 and 2014, respectively, related to restricted stock awards and performance unit awards. Stock compensation expense of $1,382 and $2,403 was recorded for the nine-month periods ended September 30, 2015 and 2014, respectively. As of September 30, 2015, unrecognized compensation expense for awards that the Company expects to vest approximated $3,435. The Company will recognize this expense over the upcoming four-year period through June 2019.

Shares issued as a result of vested stock-based compensation generally will be from previously issued shares that have been reacquired by the Company and held as Treasury shares or authorized but previously unissued common stock.

The excess income tax benefit realized for the tax deduction from stock-based compensation approximated $289 and $283 for the nine months ended September 30, 2015 and 2014, respectively. This excess income tax benefit is included in cash flows from financing activities in the Condensed Consolidated Statements of Cash Flows.

Stock Option Awards

As of September 30, 2015, there were no outstanding and exercisable stock options. During the first quarter of 2015, the remaining 7,500 outstanding stock options were exercised at a weighted average exercise price of $9.08. During the nine months ended September 30, 2014, 11,250 stock options with a weighted average exercise price per share of $11.67 were exercised. There were no new grants or cancellations of stock option awards during the three and nine-month periods ended September 30, 2015 and 2014.

Restricted Stock Awards and Performance Unit Awards

Under the amended and restated 2006 Omnibus Stock Incentive Plan, the Company grants eligible employees restricted stock and performance unit awards. The forfeitable restricted stock awards granted prior to March 2015 generally time-vest after a four year holding period, and those granted in March 2015 generally time-vest ratably over a three-year period, unless indicated otherwise by the underlying restricted stock award agreement. Performance unit awards are offered annually under separate three-year long-term incentive plans. Performance units are subject to forfeiture and will be converted into common stock of the Company based upon the Company’s performance relative to performance measures and conversion multiples as defined in the underlying plan. If the Company’s estimate of the number of performance stock awards expected to vest changes in a subsequent accounting period, cumulative compensation expense could increase or decrease. The change will be recognized in the current period for the vested shares and would change future expense over the remaining vesting period.

The following table summarizes the restricted stock award and performance unit award activity for the period ended September 30, 2015:


	Restricted	Performance		Weighted Average
	Stock	Stock		Grant Date
	Units	Units		Fair Value
Outstanding at December 31, 2014	108,237	71,990	$	36.25
Granted	29,656	41,114		47.88
Vested	(34,839)	(23,877)		31.66
Adjustment for incentive awards not expected to vest	-	(45,384)		43.97
Canceled	(1,000)	-		38.44
Outstanding at September 30, 2015	102,054	43,843	$	41.32