Stock-Based Employee Compensation

We currently have awards outstanding under two stock-based compensation plans, which provide for awards to our officers, directors and key employees. The plans consist of a 2000 Stock Award Plan and a 2008 Equity Plan. Our ability to issue new awards under the 2000 Stock Award Plan terminated in accordance with the terms of the plan in September 2009. The 2008 Equity Plan, as amended, provides for the issuance of up to 11,000,000 shares of our common stock pursuant to grants of (i) incentive and non-qualified stock options, (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units and (v) performance shares. During any calendar year, no one individual shall be granted awards of more than 500,000 shares. Options and restricted stock units outstanding as of December 31, 2015 generally vest in equal installments over four years from the date of grant. In addition, performance shares generally vest in three years. With certain limited exceptions, options, restricted stock units and performance shares are forfeited if the recipient ceases to be a director or employee before the shares vest. Options are granted at a price not less than the fair value of the shares on the date of grant and expire not later than ten years after the date of grant.

Prior to 2012, our officers received a combination of stock options and restricted stock units. Beginning in 2012, our officers instead receive their long-term incentive awards through a combination of performance share unit and restricted stock units. Each performance share unit award is expressed as a target number of performance share units based upon the fair market value of our common stock on the date the award is issued. The actual number of shares underlying each award (not to exceed 200% of the target number of performance share unit) will be determined based upon the Company's achievement of a specified performance target range. In 2015, we issued a target number of 161,479 performance share units, which will vest approximately three years following the award issue date. The performance payout of these grants will be based on return on invested capital ("ROIC") and earnings per share (“EPS”) for the year ended December 31, 2017, as may be adjusted by the Compensation Committee of our Board of Directors in early 2018 for events that are outside of management's control. In 2014, we also issued a one-time performance-based equity award to our Chairman & Chief Executive Officer in a target amount of 63,771 performance share units, with the actual number of shares payable under the grant to range from 0% to 200% of target based on our 2015 ROIC performance. In February 2016, the Compensation Committee set the payout level for this grant at 165% of target. The shares issued in settlement of this award vested in February 2016 but remain subject to restrictions on transfer until December 2017, the third anniversary of the award issuance date.

We also provide an Employee Stock Purchase Plan ("ESPP") to facilitate the purchase by employees of up to 506,322 shares of common stock in the aggregate. Offerings to employees are made on a quarterly basis. Subject to certain limitations, the purchase price for each share of common stock is equal to 85% of the average of the market prices of the common stock as reported on the New York Stock Exchange on the first business day of the purchase period and the last business day of each month of the purchase period. During 2015, 2014 and 2013, 28,724, 26,921 and 27,036 shares of our common stock were issued under the ESPP at a weighted-average price of $72.52, $52.08 and $33.16, respectively.

In 1994, we granted to our Chairman and Chief Executive Officer an award of common stock, issuable in quarterly installments of 10,086 shares until the earlier of the termination of his employment or June 2014. In furtherance of this grant, we issued an aggregate of 40,344 shares of common stock in 2013 and an aggregate of 20,172 shares of common stock in 2014.

Total compensation expense recognized for employee stock-based compensation for the years ended December 31, 2015, 2014 and 2013 was as follows:



	Employee Stock-Based Compensation
Classification of expense	2015		2014		2013
(In thousands)
Marketing, selling and administrative expenses	$	36,073	$	26,116	$	21,178
Total compensation expense	$	36,073	$	26,116	$	21,178

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The estimated fair value of stock options, less estimated forfeitures, is amortized over the vesting period using the graded-vesting method. We did not issue any stock options in 2015, 2014 and 2013.

Stock option activity and information about stock options outstanding are summarized in the following table:



Stock Option Activity	Number of Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value⁽¹⁾
					(years)	(in thousands)
Outstanding at January 1, 2015	706,051		$	36.03	3.64	$	33,182
Granted	—		—		—	—
Exercised	(287,379	)	$	39.12	—	—
Canceled	(6,863	)	$	47.05	—	—
Outstanding at December 31, 2015	411,809		$	33.69	3.12	$	28,111
Vested and expected to vest at December 31, 2015	411,807		$	33.69	3.12	$	28,110
Options Exercisable at December 31, 2015	409,915		$	33.73	3.11	$	27,967

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(1)	The intrinsic value represents the amount by which the fair value of stock exceeds the option exercise price as of December 31, 2015.

The total intrinsic value of stock options exercised during the years ended December 31, 2015, 2014 and 2013 was $13.8 million, $35.9 million and $17.5 million, respectively. As of December 31, 2015, there was immaterial unrecognized compensation cost, net of estimated forfeitures, related to stock options granted under our stock incentive plan which is expected to be recognized over a weighted-average period of 0.01 years.

Restricted stock units are converted into shares of common stock upon vesting or, if applicable, settle on a one-for-one basis. The cost of these awards is determined using the fair value of our common stock on the date of the grant, and compensation expense is recognized over the vesting period. Restricted stock activity is summarized in the following table:



Restricted Stock Activity	Number of Awards		Weighted- Average Grant Date Fair Value
Non-vested share units at January 1, 2015	981,553		$	42.68
Granted	298,998		$	73.98
Vested	(361,843	)	$	40.04
Canceled	(98,059	)	$	45.07
Non-vested share units expected to vest as of December 31, 2015	820,649		$	54.98

The weighted-average estimated fair value of restricted stock units granted during the year ended 2014 and 2013 was $54.60 and $36.07, respectively. The total fair value of shares released on the vesting of restricted stock units during the years ended December 31, 2015, 2014 and 2013 was $27.6 million, $20.7 million and $19.2 million, respectively. As of December 31, 2015, we had $14.4 million of total unrecognized compensation expense, net of estimated forfeitures, related to restricted stock unit grants, which will be recognized over the weighted-average period of 1.13 years.

Performance share awards are converted into shares of common stock upon vesting on a one-for-one basis. We estimate the fair value of each performance share when the grant is authorized and the related service period has commenced. We remeasure the fair value of our performance shares in each subsequent reporting period until the grant date has occurred, which is the date when the performance conditions are satisfied. We recognize compensation cost over the vesting period based on the probability of the service and performance conditions being achieved adjusted for each subsequent fair value measurement until the grant date. If the specified service and performance conditions are not met, compensation expense will not be recognized and any previously recognized compensation expense will be reversed. Performance stock activity is summarized in the following table:



Performance Stock Activity	Number of Awards		Weighted- Average Grant Date Fair Value
Non-vested share units at January 1, 2015	658,886		$	40.21
Granted	161,479		$	71.36
Vested	(241,288	)	$	33.94
Canceled	(74,866	)	$	37.59
Non-vested share units expected to vest as of December 31, 2015	504,211		$	53.57

The weighted-average estimated fair value of performance share units granted during the year ended 2014 and 2013 was $56.72 and $35.98, respectively. The total fair value of shares released on the vesting of performance share units during the years ended December 31, 2015, 2014 and 2013 was $18.3 million, $0.4 million and $0.1 million, respectively. As of December 31, 2015, we had $11.4 million of total unrecognized compensation expense, net of estimated forfeitures, related to performance share unit grants, which will be recognized over the weighted-average period of 0.81 years.