Aarons 2014 Annual Report Download - page 86

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76
The Company granted 351,000 stock options during 2014. No stock options were granted in 2013 or 2012. The weighted-
average fair value of options granted in 2014 and the weighted-average assumptions used in the Black-Scholes-Merton option
pricing model for such grants were as follows:
2014
Dividend Yield .3%
Expected Volatility 31.9%
Risk-free Interest Rate 1.9%
Expected Term (in years) 6.2
Weighted-average Fair Value of Stock Options Granted $ 9.61
The following table summarizes information about stock options outstanding at December 31, 2014:
Options Outstanding Options Exercisable
Range of Exercise
Prices
Number Outstanding
December 31, 2014
Weighted Average
Remaining Contractual
Life
(in Years)
Weighted Average
Exercise Price
Number Exercisable
December 31, 2014
Weighted Average
Exercise Price
$10.01-15.00 236,250 3.79 $ 14.11 236,250 $ 14.11
15.01-20.00 112,500 5.15 19.92 52,500 19.92
20.01-25.00 7,521 9.85 24.98 — —
25.01-30.29 267,243 9.62 28.65 — —
10.01-30.29 623,514 6.61 21.52 288,750 15.16
The table below summarizes option activity for the year ended December 31, 2014:
Options
(In Thousands)
Weighted Average
Exercise Price
Weighted Average
Remaining
Contractual Term
(in Years)
Aggregate
Intrinsic Value
(in Thousands)
Weighted
Average Fair
Value
Outstanding at January 1, 2014 687 $ 15.95
Granted 351 28.82
Exercised (307) 15.60
Forfeited/expired (107) 26.72
Outstanding at December 31, 2014 624 21.52 6.61 $ 5,643 $ 8.35
Expected to Vest at December 31, 2014 323 27.27 8.96 1,065 9.81
Exercisable at December 31, 2014 289 15.16 4.04 4,449 6.60
The aggregate intrinsic value amounts in the table above represent the closing price of the Company’s common stock on
December 31, 2014 in excess of the exercise price, multiplied by the number of in-the-money stock options as of that same
date. Options outstanding that are expected to vest are net of estimated future option forfeitures.
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 $4.4 million, $11.0 million and $20.0 million in 2014, 2013 and 2012, respectively.
The total grant-date fair value of options vested was $1.3 million, $2.7 million and $2.2 million in 2014, 2013 and 2012,
respectively.
Restricted Stock
Shares of restricted stock or restricted stock units (collectively, “restricted stock”) may be granted to employees and directors
under the 2001 Incentive Award Plan and typically vest 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. The
Company recognizes the fair value of time-based restricted stock as compensation expense on a straight-line basis over the
vesting period.
In 2011, the Company established a restricted stock program as a component of the 2001 Incentive Award 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