Aarons 2015 Annual Report Download - page 84

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The aggregate intrinsic value of options exercised, which represents the value of the Company’s common stock at the time of exercise in excess of the
exercise price, was $844,000, $4.4 million and $11.0 million in 2015, 2014 and 2013, respectively. The total grant-date fair value of options vested in 2015,
2014 and 2013 was $1.1 million, $1.3 million and $2.7 million, respectively.
Restricted Stock
Shares of restricted stock or restricted stock units (collectively, "restricted stock") may be granted to employees and directors under the newly authorized
2015 Plan and typically vest over approximately one to three year periods; under the 2001 Plan restricted stock typically vests over approximately one to
five year periods. Restricted stock grants may be subject to one or more objective employment, performance or other forfeiture conditions as established at
the time of grant. Any shares of restricted stock that are forfeited may again become available for issuance.
The fair value of restricted stock is based on the fair market value of the Company’s common stock on the date of grant.
In 2011, the Company established a restricted stock program as a component of the 2001 Plan, referred to as the Aaron’s Management Performance Plan
("AMP Plan"). Under the AMP Plan, which expired on December 31, 2012, restricted shares were granted quarterly to eligible participants upon achievement
of certain pre-tax profit and revenue levels by the employees’ operating units or the overall Company. Restricted stock granted under the AMP Plan vests
over four to five years from the date of grant. Plan participants included certain vice presidents, director level employees and other key personnel in the
Company’s home office, divisional vice presidents and regional managers. These grants will begin vesting in 2016.
During 2013, the Company granted performance-based restricted stock to certain executive officers. The performance-based restricted stock under this
program is vested at the completion of a three-year period only upon the achievement of specific performance criteria over three annual performance periods.
The compensation expense associated with these awards is amortized ratably over the vesting period based on the Company’s projected assessment of the
level of performance that will be achieved and earned.
The Company granted 261,000, 548,000 and 307,000 shares of restricted stock at weighted-average fair values of $31.78, $29.11 and $29.23 in 2015, 2014
and 2013, respectively. The following table summarizes information about restricted stock activity during 2015:




Non-vested at January 1, 2015 698
$ 28.75
Granted 261
31.78
Vested (61)
27.07
Forfeited (77)
29.45
Non-vested at December 31, 2015 821 1 29.77
1 The outstanding non-vested restricted stock as of December 31, 2015 includes 37,500 shares that are subject to performance conditions.
The total vest-date fair value of restricted stock described above and the performance share units described below that vested during the year was $1.8
million, $11.1 million and $184,000 in 2015, 2014 and 2013, respectively.
Performance Share Units
In 2015, as part of the Company’s long-term incentive compensation program ("LTIP Plan") and pursuant to the Company’s 2001 Plan and 2015 Plan, the
Company granted a mix of stock options, time-based restricted stock and performance share units to key executives and managers. For performance share
units, which are generally settled in stock, the number of shares earned is determined at the end of the one-year performance period based upon achievement
of certain earnings before income taxes, depreciation and amortization (EBITDA), revenue, return on capital and invoice volume levels of the Company. If
the performance criteria are met, the award is earned. One-third of the earned award vests immediately, one third is subject to a one year service period and
one-third of the earned award is subject to a two year service period. The number of performance-based shares which could potentially be issued ranges from
zero to 200% of the target award.
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