17. Stock-Based Compensation

The 2014 LTIP became effective on May 22, 2014, when it was approved by the shareholders of the Company, and will terminate May 21, 2024, unless terminated earlier by the Board of Directors. The Company’s previous long-term incentive plan, the 2004 Plan, terminated on April 21, 2014 in accordance with the provisions of that plan and no new awards may be made under that plan. Under the 2014 LTIP, the Company is authorized to issue up to 3,400,000 shares of common stock pursuant to awards granted as incentive stock options (intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended), nonqualified stock options, stock appreciation rights, performance units, restricted stock, RSUs and other share-based or share-related awards or in connection with Director Deferred Shares. Since 2004, RSU awards have been the only stock-based awards granted by the Company. As of December 31, 2014, there were 2,969,902 shares available for future grants under the 2014 LTIP.

Historically, the Company has repurchased its shares on the open market from time to time pursuant to an authorization from the Board of Directors of the Company and held the shares in treasury. The Company has reissued those shares upon stock option exercises and upon the issuance of shares when RSUs vest under the Company’s stock-based compensation plans. See Note 14 for further discussion of the Company’s share repurchase plans.

The Company received 42,499, 33,479 and 63,066 shares during the years ended December 31, 2014, 2013 and 2012, respectively, of its common stock valued at approximately $1.5 million, $1.6 million and $2.6 million, respectively, as partial payment of taxes required to be withheld upon issuance of shares for RSUs and upon the exercise of stock options.

During the year ended December 31, 2012, the Company received net proceeds totaling $1.8 million from the exercise of stock options that were granted under the Company’s previous stock-based compensation plans for 198,900 shares.

There were no stock options outstanding as of December 31, 2014, 2013 or 2012. A summary of the Company’s stock option activity for the year ended December 31, 2012 is shown below. Stock options outstanding at the beginning of 2012 were granted under the 1994 LTIP.



	2012
	Shares		Weighted Average Exercise Price
Outstanding at beginning of year	198,900		$	8.95
Exercised	(198,900	)	8.95
Outstanding at end of year	—		$	—
Exercisable at end of year	—		$	—

Income tax benefits realized from the exercise of stock options for the year ended December 31, 2012 were $2.2 million and were recorded as an increase in “Additional paid-in capital” in the consolidated statements of equity.

RSUs

The Company has granted RSUs to Company officers, certain employees and to the non-management members of the Board of Directors. RSUs granted in 2014 were granted under the 2004 LTIP through April 2014 and thereafter granted under the 2014 LTIP. Each vested RSU entitles the holder to receive a share of the common stock of the Company. For Company officers and certain employees, the shares are to be issued upon vesting of the RSUs or, for certain awards granted to officers, upon the officer’s separation from employment with the Company. Shares for vested RSU awards granted to members of the Board of Directors during 2014 will be issued 13 months after the grant date. Certain officers and members of the Board of Directors have elected to defer receipt of shares to be issued under vested RSUs to dates that are later than those described above. In connection with the Enova Spin-off, all RSUs outstanding for one of the officers of Enova immediately vested at the date of the Enova Spin-off.

As of December 31, 2014, the outstanding RSUs granted to Company officers and certain employees had original vesting periods ranging from one to 15 years. For executive officers of the Company, a portion of these annual grants vest over time and a portion of these annual grants vest subject to the Company’s achievement of certain performance objectives. For RSUs granted to members of the Board of Directors, one-twelfth of the RSUs vest on the last day of each of the first 12 calendar months beginning with the month in which the awards were granted. In accordance with ASC 718, the grant date fair value of each RSU is based on the Company’s closing stock price on the day before the grant date, and the total grant date fair value of performance RSUs is based on the Company’s estimate at the time of the grant of the most probable outcome expected to be achieved, which was based on the maximum level of performance for performance RSUs granted in 2014, 2013 and 2012. All awards granted are subject to clawback provisions. The total grant date fair value of RSU grants is amortized to expense over the service periods required for vesting and based on the expected outcome of RSU’s subject to performance contingencies.

Compensation expense related to RSUs totaling $4.1 million ($2.6 million net of related taxes), $4.6 million ($2.9 million net of related taxes) and $4.7 million ($2.9 million net of related taxes) was recognized for 2014, 2013 and 2012, respectively. Total unrecognized compensation cost related to RSUs as of December 31, 2014 was $17.9 million, which will be recognized over a weighted average vesting period of approximately 3.6 years.

The following table summarizes the RSU activity during 2014, 2013 and 2012:



	Year Ended December 31,
	2014				2013				2012
	Units		Weighted Average Fair Value at Date of Grant		Units		Weighted Average Fair Value at Date of Grant		Units		Weighted Average Fair Value at Date of Grant
Outstanding at beginning of year	766,695		$	36.06	772,322		$	32.57	710,591		$	29.53
Units granted	666,172		27.22		190,846		49.82		178,144		43.36
Shares issued	(154,851	)	40.32		(127,087	)	34.48		(108,170	)	29.74
Units forfeited	(161,123	)	41.90		(69,386	)	37.91		(8,243	)	41.22
Outstanding at end of year	1,116,893		$	29.36	766,695		$	36.06	772,322		$	32.57
Units vested at end of year	303,276		$	25.50	311,546		$	24.98	303,781		$	24.85

The RSUs forfeited for the year ended December 31, 2014 are primarily related to shares forfeited by employees who left the Company in connection with the 2014 Reorganization and to a performance grant made to executive officers for which the performance measures were not met on the vesting date, which was January 1, 2014.

In connection with the Enova Spin-off, the RSUs that were outstanding as of November 13, 2014 will be payable by the Company in both shares of Company common stock and Enova common stock, subject to the terms of the Company’s long-term incentive plans and the applicable award agreement. The delivery of the Enova shares will occur periodically based on the vesting term of the award agreements. As of December 31, 2014, the outstanding RSU awards had an aggregate intrinsic value of $38.4 million, which included $25.3 million and $13.1 million related to Company common stock and Enova common stock, respectively. As of December 31, 2014, the outstanding vested deferred RSU awards had an aggregate intrinsic value of $12.8 million, including $6.9 million and $5.9 million related to Company common stock and Enova common stock, respectively.

As of December 31, 2014, 685,087 shares of Enova common stock retained by the Company were allocated for settlement of unvested RSUs, vested deferred RSUs and for Director Deferred Shares. Activity during the year ended December 31, 2014 for these shares is shown below:



	Enova Shares to be Issued for RSU awards		Enova Shares to be Issued for Director Deferred Shares		Total
Enova shares retained upon Enova Spin-off	677,918		28,893		706,811
Forfeitures ^(a)	(21,724	)	—		(21,724	)
Shares held as of December 31, 2014	656,194		28,893		685,087
% ownership of Enova as of December 31, 2014	2.0	%	0.1	%	2.1	%

^(a) Shares allocated to satisfy future RSU award issuances, upon forfeit, are re-allocated to Enova shares that are held and are to be disposed of by the Company.