(7) Stock-Based and Long-Term Compensation

Under our 2013 Stock Incentive Plan, the Company may grant non-qualified stock options, restricted stock, restricted stock units and other types of equity based awards. The Compensation Committee determines the recipients of the equity awards, the type of awards made and the required performance measures. During 2015, the plan was amended to increase the number of shares of common stock authorized for issuance under the plan from 8,000,000 to 14,850,000 shares. As of December 31, 2015, 8,700,000 shares of the Company’s common stock were available for future grants under the plan.

Total stock-based compensation expense and the associated tax benefits are as follows (in thousands):



Compensation Expense	Years Ended December 31,
	2015		2014		2013
Stock options	$	3,663	$	3,900	$	3,586
Restricted stock		9,219		15,800		21,460
Restricted stock units		19,699		11,282		-
Performance share units		10,733		10,688		10,014
Strategic performance share units		2,258		2,404		-
Total	$	45,572	$	44,074	$	35,060

Tax Benefit	Years Ended December 31,
	2015		2014		2013
Stock options	$	1,355	$	1,443	$	1,327
Restricted stock		3,411		5,846		7,940
Restricted stock units		7,289		4,174		-
Total	$	12,055	$	11,463	$	9,267

Total stock-based compensation expense is reflected in general and administrative expenses in the consolidated statements of operations.

Stock Options

Stock options are granted with an exercise price equal to the market price of our ordinary shares at the date of grant. The stock options generally vest in equal installments over three years and expire in ten years from the grant date. Non-vested stock options are generally forfeited upon termination of employment.

The Company recognizes compensation expense for stock option grants based on the fair value at the date of grant using the Black-Scholes-Merton option pricing model. The Company uses historical data, among other factors, to estimate the expected volatility and the expected life of the stock options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected life of the stock option. The dividend yield is based on our historical dividend payouts.

The weighted average fair values of stock options granted and the assumptions used in estimating those fair values are as follows:



	Years Ended December 31,
	2015		2014		2013
Weighted average fair value of grants	$	6.25	$	6.95	$	8.98

Black-Scholes-Merton Assumptions:
Risk free interest rate		1.33%		1.42%		0.63%
Expected life (years)		5		4		4
Volatility		47.07%		34.50%		48.41%
Dividend yield		1.30		1.23		-

The following table summarizes stock option activity for 2015:



	Number of Options	Weighted Average Option Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2014	4,484,505	$	23.76	5.1	$	4,095
Granted	612,665	$	17.27
Exercised	(506,029)	$	17.43
Outstanding as of December 31, 2015	4,591,141	$	23.60	5.3	$	256
Exercisable as of December 31, 2015	3,488,262	$	24.48	4.3	$	256
Options expected to vest as of December 31, 2015	1,102,879	$	20.81	8.5	$	-

The total intrinsic value of stock options exercised during 2015, 2014 and 2013 was $2.3 million, $17.1 million and $5.1 million, respectively. The Company received $8.8 million, $10.6 million and $6.3 million during 2015, 2014 and 2013, respectively, from employee stock option exercises. The Company has reported tax benefits of $0.9 million, $5.6 million and $0.7 million from the exercise of stock options for 2015, 2014 and 2013, respectively.

The following table summarizes non-vested stock option activity for 2015:



	Number of Options	Weighted Average Grant Date Fair Value
Non-vested as of December 31, 2014	824,488	$	7.83
Granted	612,665	$	17.27
Vested	(334,274)	$	25.01
Non-vested as of December 31, 2015	1,102,879	$	20.81

As of December 31, 2015, the unrecognized compensation expense related to non-vested stock options was $3.9 million. The Company expects to recognize $2.6 million and $1.3 million of compensation expense during the years 2016 and 2017, respectively.

Restricted Stock

Shares of restricted stock generally vest in equal annual installments over three years. Non-vested shares are generally forfeited upon termination of employment. Holders of the restricted stock are entitled to all rights of a stockholder of the Company with respect to the restricted stock, including the right to vote the shares and receive any dividends or other distributions. Compensation expense associated with restricted stock is measured based on the grant date fair value of our common stock.

The following table summarizes restricted stock activity for 2015:



	Number of Shares	Weighted Average Grant Date Fair Value
Non-vested as of December 31, 2014	1,022,280	$	24.08
Vested	(678,880)	$	17.88
Forfeited	(50,463)	$	23.26
Non-vested as of December 31, 2015	292,937	$	23.13

No restricted stock was granted during 2015 and 2014. The weighted average grant-date fair value per share of restricted stock granted during 2013 was $23.14. The total fair value of restricted stock vested during 2015, 2014 and 2013 was $12.1 million, $23.0 million and $9.6 million, respectively. As of December 31, 2015, there was $0.4 million of unrecognized compensation expense related to non-vested restricted stock, which is expected to be recognized during 2016.

Restricted Stock Units

Beginning in 2014, restricted stock unit awards (RSUs) were granted to eligible employees. Prior to 2014, only non-employee directors were granted RSU awards. RSUs granted to employees vest in equal annual installments over three years. On the vesting date, each RSU is converted to one share of the Company’s common stock having an aggregate value determined by the Company’s closing stock price on the vesting date. Holders of RSUs are not entitled to any rights of a stockholder, such as the right to vote shares, but will accrue dividends that are paid out upon vesting.

Each non-employee director is issued annually a number of RSUs having an aggregate dollar value determined by the Company’s Board of Directors. The exact number of RSUs granted is determined by dividing the aggregate dollar value determined by the Company’s Board of Directors by the fair market value of the Company’s common stock on the day of the annual stockholders’ meeting. If the director’s election occurs at a time other than at the annual meeting, the director will receive a pro-rata number of RSUs based on the number of months between his or her election date and the anniversary of the last annual stockholder meeting. Each RSU granted prior to 2013 represents the right to receive from the Company, within 30 days of the date the director ceases to serve on the Board, one share of the Company’s common stock. The RSUs will vest and pay out in shares of the Company’s common stock in the year following the grant date on the date of Company’s annual meeting.

The following table summarizes RSU activity for 2015:



	Number of Restricted Stock Units	Weighted Average Grant Date Fair Value
Non-vested as of December 31, 2014	1,416,477	$	26.40
Granted	2,162,146	$	17.74
Vested	(460,400)	$	18.51
Forfeited	(330,334)	$	20.16
Non-vested as of December 31, 2015	2,787,889	$	20.41

As of December 31, 2015, there was $30.0 million of unrecognized compensation expense related to unvested RSUs. The Company expects to recognize $19.3 million, $10.3 million, and $0.4 million for 2016, 2017, and 2018, respectively.

Performance Share Units

The Company has issued performance share units (PSUs) to its employees as part of the Company’s long-term incentive program. There is a three-year performance period associated with each PSU grant. The two performance measures applicable to all participants are the Company’s return on invested capital and total stockholder return relative to those of the Company’s pre-defined “peer group.” If the participant has met specified continued service requirements, the PSUs will settle in cash or a combination of cash and up to 50% of equivalent value in the Company’s common stock, at the discretion of the Compensation Committee of the Board of Directors. As of December 31, 2015, there were 370,822 PSUs outstanding (112,922, 123,079 and 134,821 related to performance periods ending December 31, 2015, 2016 and 2017, respectively). The Company has recorded both current and long-term liabilities for this liability-based compensation award.

Effective February 2014, the Company granted strategic performance share units (SPSUs) to the executive officers of the Company. The number of target SPSUs was established at the beginning of a two-calendar year performance period. The final value of SPSUs earned will be based upon the level of the Company’s free cash flow achieved for 2015 and 2014. The earned SPSUs will vest provided the participant remains actively employed by the Company through January 2, 2016.

Employee Stock Purchase Plan

In 2013, the stockholders of the Company approved the 2013 Employee Stock Purchase Plan (ESPP). This plan went into effect on July 1, 2013 and replaced the prior plan. Under this plan 3,000,000 shares of common stock were reserved for issuance. Eligible employees are allowed to purchase shares of the Company’s common stock at a discount during six-month offering periods beginning on January 1 and July 1 of each year and ending on June 30 and December 31 of each year, respectively.

The following table summarizes ESPP activity (in thousands except shares):



	Years Ended December 31,
	2015		2014		2013
	2013 Plan		2013 Plan		2013 and 2007 Plans
Cash received for shares issued	$	4,803	$	4,870	$	4,124
Compensation expense	$	835	$	1,078	$	947
Shares issued		332,467		246,480		185,407

401(k)/Profit Sharing Plan

The Company maintains a defined contribution profit sharing plan for employees who have satisfied minimum service requirements. Employees may contribute up to 75% of their eligible earnings to the plan subject to the contribution limitations imposed by the Internal Revenue Service. The Company provides a nondiscretionary match of 100% of an employee’s contributions to the plan, up to 4% of the employee’s salary. The Company made contributions of $13.9 million, $16.7 million and $16.0 million during 2015, 2014 and 2013, respectively.

Non-Qualified Deferred Compensation Plans

The Company has a non-qualified deferred compensation plan which allows senior management to defer up to 75% of their base salary, up to 100% of their bonus, and up to 100% of the cash portion of their PSU compensation to the plan. The Company also has a non-qualified deferred compensation plan for its non-employee directors which allows each director to defer up to 100% of their cash compensation paid by the Company to the plan. Additionally, participating directors may defer up to 100% of the shares of common stock they are entitled to receive in connection with the payout of RSUs. Payments are made to participants based on their annual enrollment elections and plan balances. Participants earn a return on their deferred compensation that is based on hypothetical investments in certain mutual funds. Changes in market value of these hypothetical participant investments are reflected as an adjustment to the deferred compensation liability of the Company with an offset to compensation expense. The Company makes contributions that approximate the participant deferrals into various investments, principally life insurance that is invested in mutual funds similar to the participants’ hypothetical investment elections. Changes in market value of the investments and life insurance are reflected as adjustments to the deferred compensation plan asset with an offset to other income (expense) in the consolidated statements of operations.

The following table summarizes deferred compensation balances (in thousands):



		December 31,
	Balance sheet location	2015		2014
Deferred compensation assets	Intangible and other long-term assets, net	$	11,548	$	12,982
Deferred compensation liabilities, short-term	Accounts payable	$	721	$	2,291
Deferred compensation liabilities, long-term	Other long-term liabilities	$	17,367	$	14,720

Supplemental Executive Retirement Plan

The Company has a supplemental executive retirement plan (SERP). The SERP provides retirement benefits to the Company’s executive officers and certain other designated key employees. The SERP is an unfunded, non-qualified defined contribution retirement plan, and all contributions under the plan are unfunded credits to a notional account maintained for each participant. Under the SERP, the Company will generally make annual contributions to a retirement account based on age and years of service. The participants in the plan receive contributions ranging from 5% to 35% of salary and annual cash bonus, which totaled $1.2 million during 2015, 2014 and 2013. The Company recorded compensation expense of $2.1 million, $1.6 million and $1.2 million in general and administrative expenses during 2015, 2014 and 2013. The Company may also make discretionary contributions to a participant’s account. During 2015, 2014 and 2013, the Company paid $3.7 million, $3.0 million and $3.0 million, respectively, to select participants in the SERP.