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Employer Share Plans
 6 Months Ended
Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Employer Share Plans
10. Employer Share Plans

Effective May 15, 2014, CBIZ shareholders approved a new plan, the CBIZ, Inc. 2014 Stock Incentive Plan (“2014 Plan”). The 2014 Plan is in addition to the 2002 Amended and Restated CBIZ, Inc. Stock Incentive Plan (“2002 Plan”), pursuant to which CBIZ has granted various stock-based awards through the year ended December 31, 2014. The terms and vesting schedules for stock-based awards vary by type and date of grant.

 

Beginning in 2015, the 2014 Plan replaces and, for future grants, supersedes the 2002 Plan. The operating terms of the 2014 Plan are substantially similar to those of the 2002 Plan. Under the 2014 Plan, which expires in 2024, a maximum of 9.6 million stock options, shares of restricted stock or other stock-based compensation awards may be granted. Shares subject to award under the 2014 Plan may be either authorized but unissued shares of CBIZ common stock or treasury shares. Compensation expense for stock-based awards recognized during the three and six months ended June 30, 2015 and 2014 was as follows (in thousands):

 

     Three Months Ended
June 30,		      Six Months Ended
June 30,		  
     2015      2014      2015      2014  

Stock options

    $ 534       $ 666       $ 1,375       $ 1,315   

Restricted stock awards

      755         932         1,536         1,672   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total stock-based compensation expense

    $ 1,289       $ 1,598       $ 2,911       $ 2,987   
  

 

 

     

 

 

     

 

 

     

 

 

  

Stock award activity during the second quarter of 2015 was as follows (in thousands) except per share data):

 

     Stock
Options		      Restricted Stock
Awards		  
     Number
of
Options		      Weighted
Average
Exercise
Price Per
Share		      Number
of
Shares		      Weighted
Average
Grant-Date
Fair
Value (1)		  

Outstanding at beginning of year

      5,602       $ 7.06         1,039       $ 7.30   

Granted

      900       $ 9.25         362       $ 9.12   

Exercised or released

      (656 )     $ 7.12         (435 )     $ 7.11   

Expired or canceled

      (62 )     $ 7.14         (3 )     $ 6.36   
  

 

 

        

 

 

     

Outstanding at June 30, 2015

      5,784       $ 7.39         963       $ 8.08   
  

 

 

        

 

 

     

Exercisable at June 30, 2015

      3,098       $ 6.91         
  

 

 

           

 

(1) Represents weighted average market value of the shares; awards are granted at no cost to the recipients.

CBIZ utilized the Black-Scholes-Merton options-pricing model to determine the fair value of stock options on the date of grant. The fair value of stock options granted during the second quarter of 2015 was $2.34. The following weighted average assumptions were utilized:

 

     Six Months
Ended
June 30, 2015		  

Expected volatility (1)

      26.65 % 

Expected option life (years) (2)

      4.64   

Risk-free interest rate (3)

      1.32 % 

Expected dividend yield (4)

      0.00 % 

 

(1) The expected volatility assumption was determined based upon the historical volatility of CBIZ’s stock price, using daily price intervals.
(2) The expected option life was determined based upon CBIZ’s historical data using a midpoint scenario, which assumes all options are exercised halfway between the expiration date and the weighted average time it takes the option to vest.
(3) The risk-free interest rate assumption was based upon zero-coupon U.S. Treasury bonds with a term approximating the expected life of the respective options.
(4) The expected dividend yield assumption was determined in view of CBIZ’s historical and estimated dividend payouts. CBIZ does not expect to change its dividend payout policy in the foreseeable future.