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Employer Share Plans
 9 Months Ended
Sep. 30, 2016
Disclosure Of Compensation Related Costs Sharebased 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”). 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 nine months ended September 30, 2016 and 2015 was as follows (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Stock options

 

$

574

 

 

$

583

 

 

$

1,717

 

 

$

1,958

 

Restricted stock awards

 

 

916

 

 

 

825

 

 

 

2,615

 

 

 

2,361

 

Total stock-based compensation expense

 

$

1,490

 

 

$

1,408

 

 

$

4,332

 

 

$

4,319

 

 

Stock award activity during the nine months ended September 30, 2016 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

 

 

4,885

 

 

$

7.50

 

 

 

962

 

 

$

8.08

 

Granted

 

 

654

 

 

$

10.35

 

 

 

305

 

 

$

10.37

 

Exercised

 

 

(749

)

 

$

7.02

 

 

 

(435

)

 

$

7.66

 

Expired or canceled

 

 

(35

)

 

$

7.59

 

 

 

(5

)

 

$

7.68

 

Outstanding at September 30, 2016

 

 

4,755

 

 

$

7.97

 

 

 

827

 

 

$

9.14

 

Exercisable at September 30, 2016

 

 

2,594

 

 

$

7.13

 

 

 

 

 

 

 

 

 

 

 

(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 nine months ended September 30, 2016 was $2.40. The following weighted average assumptions were utilized:

 

 

 

Nine Months Ended September 30,

 

Expected volatility (1)

 

 

24.88

%

Expected option life (years) (2)

 

 

4.62

 

Risk-free interest rate (3)

 

 

1.12

%

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 expirations 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.