Stock-Based Compensation

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Officers, employees, consultants and directors of the Company may be granted equity based awards, including registered stock units ("RSUs"), performance stock units ("PSUs"), stock options and unrestricted shares of common stock pursuant to the Company's Omnibus Incentive and Equity Plan (the "Plan"). At September 30, 2019, 552,128 shares of common stock remained available for issuance of the 2,820,000 shares that are authorized for issuance under the Plan.

Stock-based compensation expense is summarized as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
($ in thousands)
Stock-based compensation expense	$	5,000	$	4,841	$	16,384	$	16,914

Restricted Stock Units

Each RSU entitles the holder to one share of common stock when the restriction expires. RSUs generally have a term of one to three years and may be time-vested or performance-contingent. The fair value of each RSU is based on the closing market price of the Company's common stock on the date of grant unless it contains a performance metric that is considered a market condition. RSUs that contain a market condition are valued using a simulation valuation model. Shares that are issued upon vesting are newly issued shares from the Plan and are not issued from treasury stock.

RSU activity for the nine months ended September 30, 2019 is summarized as follows:



	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018	552,238		$	111.49
Granted	181,367		$	108.42
Forfeited	(22,724	)	$	94.37
Settled	(158,916	)	$	96.33
Outstanding at September 30, 2019	551,965		$	115.55

For the nine months ended September 30, 2019 and 2018, a total of 58,487 and 40,384 RSUs, respectively, were withheld by the Company as a result of net share settlements to settle minimum employee tax withholding obligations. The Company paid $5.9 million and $6.5 million for the nine months ended September 30, 2019 and 2018, respectively, in minimum employee tax withholding obligations related to RSUs withheld. These net share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have been otherwise issued as a result of the vesting.

During the nine months ended September 30, 2019, the Company granted 52,960 PSUs included in the table above which contain performance-based metrics in addition to a service condition. Compensation expense for PSUs is generally recognized over a three-year service period based upon the value determined using a combination of (a) the intrinsic value method, for awards that contain a performance metric that represents a "performance condition" in accordance with ASC 718, and (b) the Monte Carlo simulation valuation model for awards that contain a "market condition" performance metric under ASC 718. Compensation expense for PSU awards that contain a market condition is fixed at the date of grant and will not be adjusted in future periods based upon the achievement of the market condition. Compensation expense for PSU awards with a performance condition is recorded each period based upon a probability assessment of the expected outcome of the performance metric with a final adjustment upon the final outcome. For the nine months ended September 30, 2019, total stock-based compensation expense for PSUs was $5.5 million.

As of September 30, 2019, unamortized stock-based compensation expense for unvested RSUs and PSUs was $32.4 million, with a weighted-average remaining amortization period of 1.5 years.

Stock Options

Stock options generally cliff vest after three years and have a contractual life of 10 years. Stock options are granted with an exercise price equal to the fair market value of the shares at the date of grant.

Stock option activity for the nine months ended September 30, 2019 is summarized as follows:



	Number of Shares		Weighted Average Exercise Price
Outstanding at December 31, 2018	76,751		$	12.86
Exercised	(66,120	)	$	9.79
Outstanding, vested and exercisable at June 30, 2019	10,631		$	31.96