Note 4.

Stock-Based Compensation

At the Company’s 2015 Annual Meeting of Stockholders, the Company’s stockholders ratified the adoption of the Company’s 2015 Stock Award and Incentive Plan (the “2015 Plan”), which provides for grants of incentive and non-qualified stock options, restricted stock, stock appreciation rights, stock awards or performance unit awards. The 2015 Plan is substantially similar to the Company’s 2001 Stock Award and Incentive Plan (as amended and restated as of March 18, 2009, the “2001 Plan” and collectively with the 2015 Plan, the “Plans”). The Company established the 2015 Plan to increase the total number of shares of common stock reserved and available for issuance by 880,000 shares from the number of shares remaining under the 2001 Plan. With the ratification of the 2015 Plan by the Company’s stockholders, the 2001 Plan was discontinued as to new grants (however, all awards previously granted under the 2001 Plan remained unchanged). The Plans are administered by the Compensation Committee of the Board of Directors. Stock options granted under the Plan generally have a ten year term. The exercise price for stock options are at prices at or above the fair market value of the common stock on the date of the grant, and each award of stock options will vest ratably over a specified period, generally three years.

Stock-based compensation expense is recognized in the consolidated financial statements for stock options based on the grant date fair value.

Net income for years ended 2015, 2014 and 2013 include $4.0 million, $3.1 million and $2.8 million pre-tax compensation costs, respectively, related to stock option expense as a component of marketing and administrative expenses. All stock option expense is recognized in the consolidated statements of operations. The related tax benefit included in the statement of income on the non-qualified stock options was $1.6 million, $1.2 million and $1.1 million for 2015, 2014 and 2013, respectively.

The benefits of tax deductions in excess of the tax benefit from compensation costs that were recognized or would have been recognized are classified as financing inflows on the consolidated statement of cash flows.

Stock Options

The fair value of options granted is estimated on the date of grant using the Black-Scholes valuation model. Compensation expense is recognized only for those options expected to vest, with forfeitures estimated at the date of grant based on the Company's historical experience and future expectations. The forfeiture rate assumption used for the periods ended December 31, 2015, 2014 and 2013 was 7.34%, 7.13% and 7.50%, respectively.

The weighted average grant date fair value for stock options granted during the years ended December 31, 2015, 2014 and 2013 was $22.68, $22.89 and $15.83, respectively. The weighted average grant date fair value for stock options vested during 2015, 2014 and 2013 was $17.83, $13.59 and $10.29, respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2015, 2014 and 2013 was $2.4 million, $13.0 million and $10.0 million, respectively.

The fair value for stock awards was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions for the years ended December 31, 2015, 2014 and 2013:

	2015		2014		2013
Expected life (in years)		6.4		6.5		6.9
Interest rate		1.52%		2.16%		1.22%
Volatility		36.86%		37.15%		37.82%
Expected dividend yield		0.33%		0.34%		0.48%

The expected term of the options represents the estimated period of time until exercise and is based on historical experience of similar awards, based upon contractual terms, vesting schedules, and expectations of future employee behavior. The expected stock-price volatility is based upon the historical and implied volatility of the Company's stock. The interest rate is based upon the implied yield on U.S. Treasury bills with an equivalent remaining term. Estimated dividend yield is based upon historical dividends paid by the Company.

The following table summarizes stock option activity for the year ended December 31, 2015:

	Awards			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value (Millions)
Awards outstanding at December 31, 2014		951,079		$	37.46
Granted		238,773			60.40
Exercised		(74,839	)		33.12
Canceled		(23,169	)		60.22

Awards outstanding at December 31, 2015		1,091,844			42.29		6.46		9.1
Awards exercisable at December 31, 2015		737,985			35.13		5.46		8.9

The aggregate intrinsic value above is calculated before applicable income taxes, based on the Company's closing stock price of $45.86 as of the last business day of the period ended December 31, 2015 had all options been exercised on that date. The weighted average intrinsic value of the options exercised during 2015, 2014 and 2013 was $32.07, $40.17 and $20.03 per share, respectively. As of December 31, 2015, total unrecognized stock-based compensation expense related to non-vested stock options was approximately $3.6 million, which is expected to be recognized over a weighted average period of approximately three years.

The Company issues new shares of common stock upon the exercise of stock options.

Non-vested stock option activity for the year ended December 31, 2015 is as follows:

	Awards			Weighted Average Grant date Fair Value Per Share
Nonvested awards outstanding at December 31, 2014		319,592		$	49.13
Granted		238,773			60.40
Vested		(181,337	)		46.88
Canceled		(23,169	)		60.22
Nonvested awards outstanding at December 31, 2015		353,859			57.21

Restricted Stock

The Company has granted key employees rights to receive shares of the Company's common stock pursuant to the Plan. The rights will be deferred for a specified number of years of service, subject to restrictions on transfer and other conditions. Compensation expense for these shares is recognized over the vesting period. The Company granted 216,502 shares, 106,116 shares and 112,225 shares for the periods ended December 31, 2015, 2014 and 2013, respectively. The fair value was determined based on the market value of unrestricted shares. As of December 31, 2015, there was unrecognized stock-based compensation related to restricted stock of $8.4 million, which will be recognized over approximately the next three years. The compensation expense amortized with respect to all units was approximately $8.8 million, $4.9 million and $3.9 million for the periods ended December 31, 2015, 2014 and 2013, respectively. In addition, the Company recorded reversals of $1.6 million, $2.1 million and $0.1 million for periods ended December 31, 2015, 2014 and 2013, respectively, related to restricted stock forfeitures. Such costs and reversals are included in marketing and administrative expenses.

The following table summarizes the restricted stock activity for the Plan:

	Awards			Weighted Average Grant Date Fair Value Per Share
Unvested balance at December 31, 2014		175,029		$	50.56
Granted		216,502			60.32
Vested		(59,801	)		47.51
Canceled		(47,944	)		51.43
Unvested balance at December 31, 2015		283,786			58.63