8. Stock-Based Incentive Plans

The Company currently has one stock-based incentive plan, which incorporates and supersedes its two previous plans (see Note 1 “Basis of Presentation — Accounting for Stock-Based Compensation”). Participants are granted stock-based awards only if the applicable Company-wide or profit-center operating goals, or both, established by the Compensation and Leadership Development Committee of the Board of Directors at the beginning of the year, are met. Certain participants may have additional goals based on strategic initiatives of the Company.

The fair value of each restricted stock unit award is estimated on the date of the award based on the closing market price of the underlying stock on the day preceding the date of the award. On February 3, 2014, 342,950 restricted stock units were awarded, including 9,975 awarded to the Company’s directors who are not employees, at an estimated value of $30.98 per share, based on the closing price on January 31, 2014. The restrictions on these awards generally lapse one quarter on the date of the award and one quarter on each of the first, second and third anniversaries of the date of the award.

The following table summarizes the Company’s unvested restricted stock unit activity for the three months ended March 31, 2014:

	Shares		Weighted-		Aggregate Intrinsic Value *
Unvested Restricted Stock Units (RSUs)	(in thousands)		Average Price		(in thousands)
Outstanding at January 1, 2014	448		$	32.45
Awarded	343
Vested	(245	)
Outstanding at March 31, 2014	546		$	31.68	$	19,294
Outstanding and expected to vest at March 31, 2014	533		$	31.69	$	16,904

* The intrinsic value is calculated using the closing price per share of $35.33 as reported by the New York Stock Exchange on March 31, 2014.

Based on the market value on the award date, the total intrinsic value of vested restricted stock units during the three-month periods ended March 31, 2014 and 2013, was $7.9 million and $5.5 million, respectively.

The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model. Expected volatility was based on historical volatilities of the Company’s common stock measured monthly over a term that is equivalent to the expected life of the stock option. The expected term of each stock option was estimated based on the Company’s prior exercise experience and future expectations of the exercise and termination behavior of the grantees. The risk-free rate was based on the yield of United States Treasury zero-coupon bonds with maturities comparable to the expected life in effect at the time of grant. The dividend yield was based on the expected dividend yield on the grant date.

No stock options were granted in 2013 or the first three months of 2014. The following table summarizes the Company’s stock option activity for the three months ended March 31, 2014:

	Shares		Weighted- Average		Weighted- Average Remaining Contractual Life	Aggregate Intrinsic Value *
Non-Qualified Stock Options	(in thousands)		Exercise Price		(in years)	(in thousands)
Outstanding at January 1, 2014	1,021		$	29.35
Exercised	(61	)
Forfeited	(3	)
Outstanding at March 31, 2014	957		$	29.38		$	5,696
Outstanding and expected to vest at March 31, 2014	939		$	29.37	3.7	$	5,593
Exercisable at March 31, 2014	637		$	29.24	3.7	$	3,883

* The intrinsic value represents the amount, if any, by which the fair market value of the underlying common stock exceeds the exercise price of the stock option, using the closing price per share of $35.33 as reported by the New York Stock Exchange on March 31, 2014.

The total intrinsic value of stock options exercised during the three-month periods ended March 31, 2014 and 2013, was $0.3 million and $0.1 million, respectively.

A summary of the status of unvested stock options as of March 31, 2014, and changes during the three months ended March 31, 2014, are presented below:

	Shares		Weighted- Average Grant-Date Fair
Unvested Stock Options	(in thousands)		Value
Unvested at January 1, 2014	448		$	10.31
Vested	(128	)	10.26
Unvested at March 31, 2014	320		$	10.33

As of March 31, 2014, $13.7 million of total unrecognized compensation cost was related to unvested stock-based compensation arrangements under the 2011 Incentive Plan and is expected to be recognized over a weighted-average period of 2.0 years.