AutoNation 2015 Annual Report Download - page 81
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Table of Contents
The risk-free interest rate is based on the U.S. Treasury yield curve at the time of the grant with a remaining term equal to the expected term used for stock
options granted. The expected term of stock options granted is derived from historical data and represents the period of time that stock options are expected
to be outstanding. The expected volatility is based on historical volatility, implied volatility, and other factors.
The following table summarizes stock option activity during 2015:
Options outstanding at January 1 5.0
$ 36.43
Granted (1) 1.0
$ 62.06
Exercised (1.3)
$ 23.33
Forfeited (0.1)
$ 51.50
Expired —
$ —
Options outstanding as of December 31 4.6
$ 45.07
6.89
$ 70.1
Options exercisable at December 31 2.3
$ 35.09
5.55
$ 57.1
Options exercisable at December 31 and expected to vest
thereafter 4.6
$ 44.76
6.80
$ 70.4
Options available for future grants at December 31 4.3
(1) The options granted during 2015, are primarily related to our employee quarterly stock option award grants in March, June, September, and December
2015.
The weighted average grant-date fair value of stock options granted and total intrinsic value of stock options exercised are summarized in the following
table:
Weighted average grant-date fair value of stock options granted $ 19.38
$ 20.56
$ 17.93
Total intrinsic value of stock options exercised (in millions) $ 51.9
$ 56.2
$ 31.3
Restricted Stock
In 2015, the Compensation Committee of our Board of Directors approved the grant of 0.2 million shares of restricted stock. Restricted stock awards are
granted to restricted stock-eligible employees generally on the first trading day of March.
Restricted stock awards are considered nonvested share awards as defined under generally accepted accounting principles and are issued from our treasury
stock. Restricted stock awards vest in equal installments over four years commencing on June 1 of the year following the grant date. Compensation cost for
restricted stock awards is based on the closing price of our common stock on the date of grant and is recognized on a straight-line basis, net of estimated
forfeitures, over the shorter of the stated vesting period or the period until employees become retirement-eligible.
79