Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v2.4.0.8
Stock-Based Compensation
 3 Months Ended
Mar. 31, 2014
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 option and restricted stock unit grants outstanding under the Plan were granted in the first quarter of each fiscal year.
Stock-based compensation expense consisted of the following (in thousands):
 
 
Three Months Ended March 31,
 
 
2014
 
2013
Stock options
 
$
881

 
$
827

Restricted stock units
 
1,696

 
1,123

Total
 
$
2,577

 
$
1,950


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 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 period:
 
 
Three Months Ended March 31,
 
 
2014
 
2013
Expected term
 
4.45 years
 
4.49 years
Expected stock price volatility
 
27.59%
 
31.02%
Risk-free interest rate
 
1.12%
 
0.61%
Expected dividend yield
 
1.33%
 
1.65%
Weighted average grant date fair value
 
$16.86
 
$11.91

During the three months ended March 31, 2014 and 2013, the Company granted a total of 218,274 and 298,805 stock options, respectively. At March 31, 2014, unrecognized costs related to outstanding stock options totaled approximately $7,912,000, 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, 2014 are expected to be recognized over a weighted average period of 2.74 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 period:
 
 
Three Months Ended March 31,
 
 
2014
 
2013
Vesting period
 
3.91 years
 
4.00 years
Expected dividend yield
 
1.32%
 
1.61%
Estimated average grant date fair value per restricted stock unit
 
$77.63
 
$51.22

During the three months ended March 31, 2014 and 2013, the Company granted 99,953 and 128,989 restricted stock units, respectively. At March 31, 2014, unrecognized costs related to outstanding restricted stock units totaled approximately $16,117,000, 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, 2014 are expected to be recognized over a weighted average period of 2.69 years.