Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

5. Stock-Based Compensation

At March 31, 2015, the Company had stock-based employee compensation plans as described below. For the three months ended March 31, 2015 and March 31, 2014, the total compensation expense (included in selling, general and administrative expense) related to these plans was $249,000 and $109,000 ($163,000 and $71,000 net of tax), respectively.

During the first quarter of 2015, the Company implemented a Long-Term Incentive Plan (the “2015 LTIP”) pursuant to the 2008 Incentive Stock Plan (the “2008 Plan”) which awarded restricted stock units (“RSUs”) to eligible executives. Under the terms of the 2015 LTIP, the number of RSUs that may vest, if any, will be based on, among other things, the Company achieving certain sales and return on invested capital (“ROIC”), as defined, targets during the January 2015 to December 2017 performance period. Earned RSUs, if any, cliff vest at the end of fiscal 2017 (100% of earned RSUs vest at December 31, 2017). The final value of these RSUs will be determined by the number of shares earned. The value of these RSUs is charged to compensation expense on a straight-line basis over the three year vesting period with periodic adjustments to account for changes in anticipated award amounts. The weighted-average price for these RSUs was $39.17 per share based on the grant date of February 13, 2015. During the three months ended March 31, 2015, $14,000 was charged to compensation expense. As of March 31, 2015, total unamortized compensation expense for this grant was $324,000. As of March 31, 2015, the maximum number of achievable RSUs under the 2015 LTIP was 14,000 RSUs.

During the first quarter of 2012, the Company implemented a Long-Term Incentive Plan (the “2012 LTIP”) pursuant to the 2008 Plan which awarded RSUs to eligible executives. The weighted-average price for these RSUs was $18.00 per share based on the grant date of February 17, 2012. Under the terms of the 2012 LTIP, 6,000 RSUs were earned and issued on February 27, 2015.

Stock Options

Option activity under the principal option plans as of March 31, 2015 and changes during the three months ended March 31, 2015 were as follows:

	Shares (in thousands)		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2014		184	$	19.71		3.59	$	3,540
Granted		—		—
Exercised		—		—
Forfeited		—		—
Expired		—		—
Outstanding as of March 31, 2015		184	$	19.71		3.35	$	4,017
Exercisable as of March 31, 2015		86	$	12.46		2.30	$	2,505

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the first quarter of fiscal 2015 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2015. This amount changes based on the fair market value of the Company’s stock. During the three months ended March 31, 2015 and March 31, 2014, no options to purchase common stock were exercised by option holders.

As of March 31, 2015, $582,000 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.9 years.

Tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options are classified as financing cash flows. No options were exercised during the three months ended March 31, 2015 and March 31, 2014. The Company has applied the “Short-cut” method in calculating the historical windfall tax benefits. All tax shortfalls will be applied against this windfall before being charged to earnings.