Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.4.0.3
Stock-Based Compensation
 3 Months Ended
Mar. 31, 2016
Share-based Compensation [Abstract]  
Stock-Based Compensation
STOCK-BASED COMPENSATION
The Company’s Stock Incentive Plan (the “Plan”) allows for grants of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units and other stock-based or cash-based awards. The majority of all stock options and restricted stock unit grants outstanding under the Plan were granted in the first quarter of each fiscal year. Stock compensation is recognized based on an estimated number of awards that are expected to vest.
Stock-based compensation expense consisted of the following (in thousands):
 
Three Months Ended March 31,
 
2016
 
2015
Stock options
$
972

 
$
916

Restricted stock units
2,101

 
2,030

Total
$
3,073

 
$
2,946


Stock Options
The Company estimates the fair value of stock options using the Black-Scholes model. Key inputs and assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, the expected stock price volatility of the Company’s stock over the option’s expected term, the risk-free interest rate over the option’s expected term, and the Company’s expected annual dividend yield.
The following table presents the weighted average assumptions for stock options granted in the periods:
 
Three Months Ended March 31,
 
2016
 
2015
Expected option term
4.36 years
 
4.40 years
Expected stock price volatility
29.70%
 
26.32%
Risk-free interest rate
1.14%
 
1.14%
Expected annual dividend yield
1.20%
 
1.28%
Weighted average grant date fair value
$13.03
 
$9.78

During the three months ended March 31, 2016 and 2015, the Company granted a total of 389,186 and 462,391 stock options, respectively. At March 31, 2016, unrecognized costs related to outstanding stock options totaled approximately $9,478,000, before any related tax benefit. The unrecognized costs related to stock options are amortized over the related vesting period using the straight-line attribution method. Unrecognized costs related to stock options at March 31, 2016 are expected to be recognized over a weighted average period of 2.75 years.
Restricted Stock Units
The Company estimates the fair value of service-based and performance-based restricted stock units using the Black-Scholes model. Key inputs and assumptions used to estimate the fair value of restricted stock units include the vesting period, expected annual dividend yield and closing price of the Company’s common stock on the date of grant.
 The following table presents the weighted average assumptions for restricted stock units granted in the periods:
 
Three Months Ended March 31,
 
2016
 
2015
Vesting period
3.90 years
 
3.91 years
Expected annual dividend yield
1.16%
 
1.14%
Estimated average grant date fair value per restricted stock unit
$56.02
 
$50.64

During the three months ended March 31, 2016 and 2015, the Company granted 175,938 and 180,789 restricted stock units, respectively. At March 31, 2016, unrecognized costs related to outstanding restricted stock units totaled approximately $19,495,000, before any related tax benefit. The unrecognized costs related to restricted stock units are being amortized over the related vesting period using the straight-line attribution method. These unrecognized costs at March 31, 2016 are expected to be recognized over a weighted average period of 2.58 years.