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STOCK AWARD PLANS | 9 Months Ended
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Sep. 30, 2019
Share-based Payment Arrangement [Abstract] |
STOCK AWARD PLANS | STOCK AWARD PLANS Stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense as it vests. A summary of our total compensation expense recognized in our condensed consolidated statements of operations and comprehensive income for stock-based compensation is as follows (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Stock options | $ | 4,829 |  |  | $ | 5,666 |  |  | $ | 13,539 |  |  | $ | 17,931 |
Stock awards | 3,470 |  |  | 17,539 |  |  | 24,798 |  |  | 48,443 |
Company expense on ESPP discount | 551 |  |  | 566 |  |  | 2,320 |  |  | 2,101 |
Total stock-based compensation expense | $ | 8,850 |  |  | $ | 23,771 |  |  | $ | 40,657 |  |  | $ | 68,475 |
On May 9, 2019, our shareholders approved an amendment and restatement of our 2013 Equity Incentive Plan (“the Plan”) to increase the number of shares authorized for award by 4,000,000 shares. The Plan allows us to grant certain stock awards, including stock options at fair market value and performance shares and restricted stock units, to our key employees and outside directors. A maximum of 17,041,803 shares can be granted under this plan following the amendment and restatement. Approximately 5,283,926 shares were available for stock awards under the plan as of September 30, 2019. Shares subject to awards that expire or are canceled without delivery of shares or that are settled in cash generally become available again for issuance under the plan. Stock Options - We have awarded time-based and performance-based stock options to certain key employees. These options are subject to certain vesting requirements over a five-year period based on the employee's continued employment or on the company’s earnings growth. Any options remaining unvested at the end of the five-year vesting period are forfeited to the company. Although participants can exercise options via a stock swap exercise, we do not issue reloads (restoration options) on the grants. The fair value of these options is established based on the market price on the date of grant, discounted for post-vesting holding restrictions, calculated using the Black-Scholes option pricing model. Changes in measured stock price volatility and interest rates are the primary reasons for changes in the discount. These grants are being expensed based on the terms of the awards. As of September 30, 2019, unrecognized compensation expense related to stock options was $45.0 million. The amount of future expense to be recognized will be based on the passage of time, the company’s earnings growth, and certain other conditions. Stock Awards - We have awarded performance-based restricted shares and restricted stock units and time-based restricted stock units to certain key employees and non-employee directors. Performance-based awards are subject to certain vesting requirements over a five-year period, based on our earnings growth. Time-based awards vest primarily based on the employee's continued employment. The awards also contain restrictions on the awardees’ ability to sell or transfer vested awards for a specified period of time. The fair value of these awards is established based on the market price on the date of grant, discounted for post-vesting holding restrictions. The discounts on outstanding grants vary from 15 percent to 21 percent and are calculated using the Black-Scholes option pricing model-protective put method. Changes in measured stock price volatility and interest rates are the primary reasons for changes in the discount. These grants are being expensed based on the terms of the awards. We have also issued restricted stock units to certain key employees and non-employee directors, which are fully vested upon issuance. These units contain restrictions on the awardees’ ability to sell or transfer vested units for a specified period of time. The fair value of these units is established using the same method discussed above. These grants have been expensed during the year they were earned. As of September 30, 2019, there was unrecognized compensation expense of $97.1 million related to previously granted full value awards. The amount of future expense to be recognized will be based on the passage of time, the company’s earnings growth, and certain other conditions. Employee Stock Purchase Plan - Our 1997 Employee Stock Purchase Plan ("ESPP") allows our employees to contribute up to $10,000 of their annual cash compensation to purchase company stock. Purchase price is determined using the closing price on the last day of each quarter discounted by 15 percent. Shares vest immediately. The following is a summary of the employee stock purchase plan activity:
Three Months Ended September 30, 2019
Shares purchased by employees |  | Aggregate cost to employees |  | Expense recognized by the company
45,098 |  |  | $ | 3,121,126 |  |  | $ | 550,787 |

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