Stock Options, Stock Grants, SARs and ESPP

3 Months Ended

Mar. 31, 2015

Stock Options, Stock Grants, SARs and ESPP

Note 8. Stock Options, Stock Grants, SARs and ESPP

Stock-based compensation granted under the Company’s stock plans is expensed in tranches over the vesting period. Options and non-performance based grants generally vest equally over a three or four-year period and the options have a maximum term of ten years. Pursuant to the provisions of the Second Amended and Restated 2005 Stock Incentive Plan (“the Plan”), shares that are subject to an award and are forfeited or otherwise terminate without the delivery of the full number of shares may, to the extent of such forfeiture or termination, again be available for grant under the Plan. The Compensation Committee has adopted a policy that shares that are forfeited to satisfy the withholding tax obligations of a grantee, and which have not otherwise been issued or outstanding, will, pursuant to this provision, again be available for grant under the Plan. This policy has been applied effective January 1, 2010.

Restricted stock units and performance units are granted at the market closing price on the grant date. On February 10, 2015, we granted 4,658 restricted stock units and on March 5, 2015, we granted 185,050 performance units to employees and officers with a grant date fair market value of $77.31 and $74.49, respectively. Each performance unit and restricted stock unit represents a contingent right to receive of one share of common stock as of the vesting date.