COMMON STOCK

Sale of Equity Securities

In March 2016, we completed a public offering of 5,922,500 shares of our common stock, par value $0.01 per share, at a price to us of $50.11 per share. Net proceeds of the offering were $296.6 million, after deducting offering expenses and underwriting discounts, of which $59,225 is included in common shares-par value and $296.5 million is included in additional paid-in capital ("APIC") on the March 31, 2016 condensed consolidated balance sheet. The shares were issued pursuant to an effective shelf registration statement on Form S-3 filed with the SEC in March 2015.

In March 2015, we completed a public offering of 4,002,000 shares of our common stock, par value $0.01 per share, at a price to us of $50.73 per share. Net proceeds of the offering were $202.9 million, after deducting offering expenses and underwriting discounts, of which $40,020 is included in common shares-par value and $202.8 million is included in APIC on the condensed consolidated balance sheets. The shares were issued pursuant to the effective shelf registration statement on Form S-3 filed with the SEC in March 2015.

Stock-Based Compensation Plans

The following table provides a summary of the impact of our outstanding stock-based compensation plans on the results of operations for the periods presented:



	Three Months Ended March 31,
	2016			2015
	(in thousands)

Stock-based compensation expense	$	4,682		$	4,368
Income tax benefit	(1,782		)	(1,659		)
Net stock-based compensation expense	$	2,900		$	2,709

Stock Appreciation Rights ("SARs")

The SARs vest ratably over a three-year period and may be exercised at any point after vesting through ten years from the date of issuance. Pursuant to the terms of the awards, upon exercise, the executive officers will receive, in shares of common stock, the excess of the market price of the award on the date of exercise over the market price of the award on the date of issuance.

In January 2016, the Compensation Committee awarded 58,709 SARs to our executive officers. The fair value of each SAR award was estimated on the date of grant using a Black-Scholes pricing model using the following assumptions:



	Three Months Ended March 31,
	2016			2015

Expected term of award	6.0 years			5.2 years
Risk-free interest rate	1.8		%	1.4		%
Expected volatility	54.5		%	58.0		%
Weighted-average grant date fair value per share	$	26.96		$	22.23

The expected term of the award was estimated using historical stock option exercise behavior data. The risk-free interest rate was based on the U.S. Treasury yields approximating the expected life of the award in effect at the time of grant. Expected volatilities were based on our historical volatility. We do not expect to pay or declare dividends in the foreseeable future.

The following table presents the changes in our SARs for all periods presented:



	Three Months Ended March 31,
	2016							2015
	Number of SARs		Weighted-Average Exercise Price		Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)		Number of SARs	Weighted-Average Exercise Price		Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding beginning of year, January 1,	326,453		$	38.99				279,011	$	38.77
Awarded	58,709		51.63					68,274	39.63
Exercised	(8,414	)	43.38		—	$	114	—	—		—	—
Outstanding at March 31,	376,748		40.86		7.4	$	7,002	347,285	38.94		8.0	$	5,245
Vested and expected to vest at March 31,	368,662		40.71		7.4	6,909		338,570	38.86		8.0	5,138
Exercisable at March 31,	243,103		37.44		6.6	5,350		191,149	35.68		7.1	3,509

Total compensation cost related to SARs granted, net of estimated forfeitures, and not yet recognized in our condensed consolidated statement of operations as of March 31, 2016 was $2.7 million. The cost is expected to be recognized over a weighted-average period of 2.0 years.

Restricted Stock Awards

Time-Based Awards. The fair value of the time-based restricted shares is amortized ratably over the requisite service period, primarily three years. The time-based shares generally vest ratably on each anniversary following the grant date provided that a participant is continuously employed.

In January 2016, the Compensation Committee awarded to our executive officers a total of 61,634 time-based restricted shares that vest ratably over a three-year period ending in January 2019.

The following table presents the changes in non-vested time-based awards to all employees, including executive officers, for the three months ended March 31, 2016:



	Shares		Weighted-Average Grant-Date Fair Value

Non-vested at December 31, 2015	525,081		$	50.23
Granted	85,007		51.74
Vested	(60,272	)	39.04
Non-vested at March 31, 2016	549,816		51.69

The following table presents the weighted-average grant date fair value per share and related information as of/for the periods presented:



	As of/for the Three Months Ended March 31,
	2016		2015
	(in thousands, except per share data)

Total intrinsic value of time-based awards vested	$	3,072	$	3,682
Total intrinsic value of time-based awards non-vested	32,687		31,762
Market price per common share as of March 31,	59.45		54.04
Weighted-average grant date fair value per share	51.74		39.73

Total compensation cost related to non-vested time-based awards, net of estimated forfeitures, and not yet recognized in our condensed consolidated statements of operations as of March 31, 2016 was $17.2 million. This cost is expected to be recognized over a weighted-average period of 1.8 years.

Market-Based Awards. The fair value of the market-based restricted shares is amortized ratably over the requisite service period, primarily three years. The market-based shares vest if the participant is continuously employed throughout the performance period and the market-based performance measure is achieved, with a maximum vesting period of three years. All compensation cost related to the market-based awards will be recognized if the requisite service period is fulfilled, even if the market condition is not achieved.

In January 2016, the Compensation Committee awarded a total of 24,280 market-based restricted shares to our executive officers. In addition to continuous employment, the vesting of these shares is contingent on the Company's total shareholder return ("TSR"), which is essentially the Company’s stock price change including any dividends, as compared to the TSR of a group of peer companies. The shares are measured over a three-year period ending on December 31, 2018 and can result in a payout between 0% and 200% of the total shares awarded. The weighted-average grant date fair value per market-based share for these awards granted was computed using the Monte Carlo pricing model using the following assumptions:



	Three Months Ended March 31,
	2016			2015

Expected term of award	3 years			3 years
Risk-free interest rate	1.2		%	0.9		%
Expected volatility	52.3		%	53.0		%
Weighted-average grant date fair value per share	$	72.54		$	57.35

The expected term of the awards was based on the requisite service period. The risk-free interest rate was based on the U.S. Treasury yields in effect at the time of grant and extrapolated to approximate the life of the award. The expected volatility was based on our historical volatility.

The following table presents the change in non-vested market-based awards during the three months ended March 31, 2016:



	Shares	Weighted-Average Grant-Date Fair Value per Share

Non-vested at December 31, 2015	71,549	$	63.60
Granted	24,280	72.54
Non-vested at March 31, 2016	95,829	65.86

The following table presents the weighted-average grant date fair value per share and related information as of/for the periods presented:



	As of/for the Three Months Ended March 31,
	2016		2015
	(in thousands, except per share data)

Total intrinsic value of market-based awards non-vested	$	5,697	$	6,113
Market price per common share as of March 31,	59.45		54.04
Weighted-average grant date fair value per share	72.54		57.35

Total compensation cost related to non-vested market-based awards, net of estimated forfeitures, and not yet recognized in our condensed consolidated statements of operations as of March 31, 2016 was $3.0 million. This cost is expected to be recognized over a weighted-average period of 2.0 years.