Stock-Based Compensation

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

We grant stock-based compensation awards under the Second Amended and Restated 2010 Stock Incentive Plan (Stock Incentive Plan), including stock options, restricted stock units, phantom stock, and unrestricted stock units. In the Stock Incentive Plan, we have 12,623,538 shares of common stock reserved and authorized for issuance subject to stock splits, dividends, and other similar events. At March 31, 2020, 5,611,169 shares were available for grant under the Stock Incentive Plan. We issue new shares of common stock upon the exercise of stock options or when vesting conditions on restricted stock units are fully satisfied. These shares are subject to a fungible share provision such that the authorized share reserve is reduced by (i) one share for every one share subject to a stock option or share appreciation right granted under the Plan and (ii) 1.7 shares for every one share of common stock that was subject to an award other than an option or share appreciation right.

We also periodically award phantom stock units, which are settled in cash upon vesting and accounted for as liability-based awards with no impact to the shares available for grant.

In addition, we maintain the Employee Stock Purchase Plan (ESPP), for which 222,922 shares of common stock were available for future issuance at March 31, 2020.

All other forms of stock grants, including, Unrestricted stock, ESPP, and Phantom stock units were not significant for the three months ended March 31, 2020 and 2019.

Stock-Based Compensation Expense

Total stock-based compensation expense and the related tax benefit were as follows:


	Three Months Ended March 31,
In thousands	2020		2019
Stock options	$	467	$	581
Restricted stock units	7,809		6,467
Unrestricted stock awards	206		157
Phantom stock units	433		918
Total stock-based compensation	$	8,915	$	8,123

Related tax benefit	$	1,767	$	1,443

Stock Options

A summary of our stock option activity is as follows:


	Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value		Weighted Average Grant Date Fair Value
	(in thousands)			(years)	(in thousands)
Outstanding, January 1, 2019	895	$	47.93	6.2	$	4,806


Exercised	(20)	44.99			211
Forfeited	(7)	67.53



Outstanding, March 31, 2019	868	$	47.83	6.0	$	4,402

Outstanding, January 1, 2020	458	$	56.38	7.0	$	12,641
Granted	73	87.27					$	26.72
Exercised	(40)	54.03			934


Outstanding, March 31, 2020	491	$	61.13	7.5	$	3,106

Exercisable, March 31, 2020	295	$	49.74	6.3	$	3,096

At March 31, 2020, total unrecognized stock-based compensation expense related to nonvested stock options was $4.0 million, which is expected to be recognized over a weighted average period of approximately 2.4 years.

The weighted average assumptions used to estimate the fair value of stock options granted and the resulting weighted average fair value are as follows:


	Three Months Ended March 31,
	2020		2019

Expected volatility	31.0	%	—	%
Risk-free interest rate	1.4	%	—	%
Expected term (years)	5.3		N/A

There were no employee stock options granted for the three months ended March 31, 2019.

Restricted Stock Units

The following table summarizes restricted stock unit activity:


In thousands, except fair value	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
Outstanding, January 1, 2019	817

Granted	107	$	56.04
Released ⁽¹⁾	(316)			$	19,074
Forfeited	(17)
Outstanding, March 31, 2019	591

Outstanding, January 1, 2020	684	$	64.38
Granted	182	87.17
Released ⁽¹⁾	(192)	65.08		$	12,454
Forfeited	(7)	67.42
Outstanding, March 31, 2020	667	70.55

Vested but not released, March 31, 2020	8			$	473

⁽¹⁾ Shares released is presented gross of shares netted for employee payroll tax obligations.

At March 31, 2020, total unrecognized compensation expense on restricted stock units was $44.7 million, which is expected to be recognized over a weighted average period of approximately 2.1 years.

The weighted average assumptions used to estimate the fair value of performance-based restricted stock units granted with a service and market condition and the resulting weighted average fair value are as follows:


	Three Months Ended March 31,
	2020			2019

Expected volatility	37.6		%	31.3		%
Risk-free interest rate	1.5		%	2.5		%
Expected term (years)	1.8			1.6

Weighted average fair value	$	94.28		$	60.91