Stockholders' Equity and Share-Based Awards

12 Months Ended

Dec. 31, 2015

Stockholders' Equity and Share-Based Awards

13. Stockholders’ Equity and Share-Based Awards

The Company maintains the 2013 Stock Incentive Plan, which allows for grants of stock options, restricted stock and short-term cash awards. At December 31, 2015, there were approximately 2.5 million share-based awards collectively available for grant under this stock plan.

Stock Options

A summary of the Company’s stock option activity in 2015 is as follows:

	Shares (in thousands)			Weighted Average Exercise Price		Weighted Average Remaining Life (years)		Total Intrinsic Value (in millions)
Options outstanding, beginning of year		301.0		$	9.50
Granted		—			—
Exercised		(183.7	)		9.72
Cancelled		(1.7	)		9.00
Options outstanding, end of year (a)		115.6		$	9.16		0.7	$	4.5

(a) All options outstanding are exercisable

The Company does not use cash to settle any of its stock options or restricted stock awards and when available issues shares from its treasury stock instead of issuing new shares. Common stock options vest ratably over an explicit service period of typically 3 to 4 years and generally have a contractual term of 7 years. The total intrinsic value of stock options exercised was $7.9, $7.2 and $6.8 for 2015, 2014 and 2013, respectively. There were no stock options granted in 2015, 2014 and 2013.

Restricted Shares of Common Stock

The Company issues restricted stock awards whose restrictions lapse upon either the passage of time (service vesting), achieving performance targets, attaining Company common stock price thresholds or some combination of these restrictions. The contractual life is generally 7 years for those restricted stocks with performance targets, common stock price thresholds or some combination thereof. For those restricted stock awards with common stock price thresholds, the fair values were determined using a Monte Carlo simulation embedded in a lattice model. The fair value for all other restricted stock awards were based on the closing price of the Company’s common stock on the dates of grant.

A summary of the Company’s restricted stock activity for 2015 is as follows:

	Shares (in thousands)
Outstanding as of December 31, 2014		7,214.1
Granted		2,290.0
Released/Vested		(2,280.4	)
Cancelled		(580.3	)
Outstanding as of December 31, 2015		6,643.4

The total fair value of restricted shares granted and total fair value of restricted shares vested for 2015, 2014 and 2013 is as follows:

(in millions)	2015		2014		2013
Total fair value of restricted shares granted	$	113.1	$	222.0	$	75.0
Total fair value of restricted shares vested		61.6		77.1		85.7

For those restricted stock awards with common stock price thresholds, the weighted average grant date fair values of these awards were $52.05, $36.61 and $22.53 for 2015, 2014 and 2013, respectively, based on the following assumptions:

	2015			2014			2013
Expected volatility		26.0	%		32.0	%		40.7	%
Risk-free interest rates		1.8	%		1.7	%		0.8	%
Derived service periods (in years)		0.1			0.3			0.1

For all other restricted stock awards, the weighted average grant date fair values were $52.09, $40.99 and $36.92 for the years ended December 31, 2015, 2014 and 2013, respectively.

As part of the restricted stock awards granted in 2015, in January 2015, the Board authorized an annual grant of approximately 0.8 million restricted stock awards to certain executive officers, which had an aggregate grant date fair value of $33.9 and vested during 2015 when the Company’s weighted average share price exceeded certain thresholds. In 2015, the Company also granted approximately 0.6 million restricted stock awards with an aggregate grant date fair value of $33.2, a portion of which will vest on the third anniversary from the grant date and the remainder will vest upon the achievement of certain performance targets. In December 2015, the Board authorized the 2016 annual grant and awarded approximately 0.8 million restricted stock awards to certain executive officers which had an aggregate grant date fair value of $40.0 and will vest when the Company’s weighted average share price exceeds certain thresholds. Additionally in December 2015, the Board authorized a stock bonus of approximately 0.1 million restricted stock awards to certain executive officers which had an aggregate grant date fair value of $6.0 and vested immediately.

During the fourth quarter of 2015, the Company recognized $77.8 of cumulative stock-based compensation related to certain restricted stock awards granted during 2014 where compensation expense was not previously recognized as the achievement of the performance targets was not deemed probable.

As of December 31, 2015, there was $149 of unrecognized stock-based compensation cost related to non-vested share-based awards whose costs are expected to be expensed through 2017 over a weighted-average period of approximately 9 months.

Stockholders’ Equity

In October 2015, pursuant to a public offering of its common stock, the Company completed an equity offering of 10.0 million newly-issued shares of common and received net proceeds of approximately $477. The proceeds were used to fund a portion of the Jostens Acquisition.

In July 2015, pursuant to a public offering of its common stock, the Company completed an equity offering of 18.4 million newly-issued shares of common stock and received net proceeds of approximately $971. The proceeds were used to fund a portion of the Waddington Acquisition.

In September 2013, pursuant to a public offering of its common stock, the Company completed an equity offering of approximately 24.8 million newly-issued shares of common stock and received net proceeds of approximately $745. The proceeds were used to fund a portion of the YCC Acquisition.