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Notes to Financial Statements—(Continued)
76
payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying,
deferring or preventing a change of control of the Company or other corporate action. As of December 31, 2015 and 2014,
there were no shares of preferred stock outstanding.
7. Stock-Based Compensation
The Company has stock plans under which directors, officers, key employees and consultants of the Company may be
granted restricted stock awards, stock options and other equity-based instruments as a means of promoting the Company’s
long-term growth and profitability. The plans are intended to encourage participants to contribute to, and participate in, the
success of the Company.
On December 16, 2014, the Company's Board of Directors approved the 2015 Incentive Award Plan, or 2015 Plan, which
was subsequently approved by the Company's stockholders on June 16, 2015. The number of shares reserved for issuance or
transfer pursuant to awards under the 2015 Plan will be increased by the number of shares represented by awards outstanding
under the Company's former equity plan, the 2011 Equity Incentive Award Plan (2011 Plan), that are forfeited or lapse
unexercised and which, following the effective date of the 2015 Plan, are not issued under the Company's 2011 Plan. No further
awards will be granted under the 2011 Stock Plan, and all outstanding awards will continue to be governed by their existing
terms. As of December 31, 2015 and December 31, 2014, 2,428,990 and 2,682,457 shares of the Company’s common stock,
respectively, remained available for future issuance under the 2015 Plan and 2011 Plan, respectively.
Stock-based compensation cost is included within salaries, wages and benefits in operating expenses in the
accompanying statements of operations. Stock-based compensation cost amounted to $9.2 million, $8.8 million and $5.7
million for 2015, 2014 and 2013, respectively. During 2015, 2014 and 2013, there was $3.4 million, $3.2 million and $2.1
million tax benefit recognized in income related to stock-based compensation, respectively.
Restricted Stock and Restricted Stock Units
Restricted stock and restricted stock unit awards are valued at the fair value of the shares on the date of grant. Generally,
granted shares and units vest 25% per year on each anniversary of issuance. Each restricted stock unit represents the right to
receive one share of common stock upon vesting of such restricted stock unit. Vesting of restricted stock units is based on time-
based service conditions. In order to vest, the participant must still be employed by the Company, with certain contractual
exclusions, at each vesting event. Generally, within 30 days after vesting, the shares underlying the award will be issued to the
participant. In the event a successor corporation in a change in control situation fails to assume or substitute for the restricted
stock units, the restricted stock units will automatically vest in full as of immediately prior to the consummation of such change
in control. In the event of death or permanent disability of a participant, the restricted stock units will automatically vest in full.
Compensation expense, net of forfeitures, is recognized on a straight-line basis over the requisite service period.
A summary of the status of the Company’s restricted stock shares (restricted stock awards and restricted stock unit
awards) as of December 31, 2015 and changes during the year ended December 31, 2015 is presented below:
Number of
Shares
Weighted-
Average
Grant Date Fair
Value ($)
Outstanding at December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363,891 38.83
Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,772 75.40
Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (132,108) 34.94
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,875) 55.45
Outstanding at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294,680 49.19
There were 74,772 and 182,464 restricted stock shares granted during the years ended December 31, 2015 and
December 31, 2014, respectively. As of December 31, 2015 and December 31, 2014, there was $9.8 million and $10.6 million,
respectively, of total unrecognized compensation cost related to nonvested restricted stock to be recognized over 2.4 years and
2.8 years, respectively.
The weighted-average fair value of restricted stock granted during the years ended December 31, 2015, 2014 and 2013
was $75.40, $55.14 and $27.70, respectively. The total fair value of restricted stock shares vested during the years ended
December 31, 2015, 2014 and 2013 was $9.2 million, $6.5 million and $4.3 million respectively.
Stock Options