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Note 15 - Share Plans
 12 Months Ended
Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

15. Share Plans


The Company adopted an equity incentive plan on February 10, 2010 in connection with its initial public offering. The plan, as amended, allows for granting of up to 9.1 million stock-based awards to executives, directors and employees. Awards available for grant under the Plan include stock options, stock appreciation rights, restricted stock, other stock-based awards, and performance-based compensation awards. Total share-based compensation expense related to the equity incentive plan was $12,612, $12,368 and $10,780 the years ended December 31, 2014, 2013 and 2012, respectively, net of estimated forfeitures, which is recorded in operating expenses in the consolidated statements of comprehensive income.


Stock Options - Stock options granted in 2014 have an exercise price of between $42.20 per share and $59.01 per share, stock options granted in 2013 have an exercise price of between $29.81 per share and $48.36 per share, and the stock options granted in 2012 have an exercise price of between $15.94 per share and $32.05 per share. On June 21, 2013, the Company paid a special cash dividend of $5.00 per share on its common stock, and on June 29, 2012, the Company paid a special cash dividend of $6.00 per share on its common stock. In connection with these special dividends, and pursuant to the terms of the Company’s stock option plan, certain adjustments were made to stock options outstanding under the plan in order to avoid dilution of the intended benefits which would otherwise result as a consequence of the special dividend. As such, the strike price for all outstanding stock options as of the special dividend dates, were adjusted by the $5.00 and $6.00 special dividend amounts. There was no change to compensation expense as a result of these adjustments. Stock options issued in 2014, 2013 and 2012 vest in equal installments over four years, subject to the grantee’s continued employment or service and expire 10 years after the date of grant. Stock options issued in 2011 and 2010 vest in equal installments over five years, subject to the grantee’s continued employment or service and expire 10 years after the date of grant.


Beginning in 2011, stock option exercises are net-share settled such that the Company withholds shares with value equivalent to the exercise price of the stock option awards plus the employees’ minimum statutory obligation for the applicable income and other employment taxes. Total shares withheld were 235,644, 323,427 and 667,041 in 2014, 2013 and 2012, respectively, and were based on the value of the stock on the exercise dates as determined based upon an average of the Company’s high and low stock sales price on the exercise dates. Total payments for the employees’ tax obligations to the taxing authorities were $10,411, $8,449 and $6,425 in 2014, 2013 and 2012, respectively, and are reflected as a financing activity within the consolidated statements of cash flows. The net-share settlements had the effect of share repurchases by the Company as they reduced the number of shares that would have otherwise been issued.


The grant-date fair value of each option grant is estimated using the Black-Scholes-Merton option pricing model. The fair value is then amortized on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Since there is limited history for the Company’s stock, expected volatility is calculated based on an analysis of historic and implied volatility measures for a set of peer companies. The average expected life is based on the contractual term of the option using the simplified method. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. The compensation expense recognized is net of estimated forfeitures. Forfeitures are estimated based on actual share option forfeiture history. The weighted-average assumptions used in the Black-Scholes-Merton option pricing model for 2014, 2013 and 2012 are as follows:


   

2014

   

2013

   

2012

 

Weighted average grant date fair value

  $ 26.35     $ 16.30     $ 12.13  
                         

Assumptions:

                       

Expected stock price volatility

    45 %     47 %     45 %

Risk free interest rate

    1.90 %     1.21 %     1.22 %

Expected annual dividend per share

  $ -     $ -     $ -  

Expected life of options (years)

    6.25       6.25       6.25  

The Company periodically evaluates its forfeiture rates and updates the rates it uses in the determination of its stock-based compensation expense. The impact of the change to the forfeiture rates on non-cash compensation expense was immaterial for the years ended December 31, 2014, 2013 and 2012.


A summary of the Company’s stock option activity and related information for the years ended December 31, 2014, 2013 and 2012 is as follows:


   

Number of

Options

   

Weighted-

Average

Exercise Price

   

Weighted-

Average

Remaining Contractual

Term (in years)

   

Aggregate

Intrinsic Value

($ in thousands)

 
                                 

Outstanding as of December 31, 2011

    4,308,545     $ 13.36       8.2     $ 63,193  

Granted

    256,112       21.28                  

Exercised

    (1,113,827 )     13.21                  

Expired

    -       -                  

Forfeited

    (10,788 )     20.52                  

Outstanding as of December 31, 2012

    3,440,042       8.44       9.5     $ 87,001  
                                 

Granted

    253,857       35.04                  

Exercised

    (703,326 )     6.05                  

Expired

    (1,625 )     20.94                  

Forfeited

    (51,647 )     17.02                  

Outstanding as of December 31, 2013

    2,937,301       5.74       9.5     $ 148,369  
                                 

Granted

    187,189       57.21                  

Exercised

    (549,282 )     3.44                  

Expired

    (259 )     15.94                  

Forfeited

    (32,810 )     12.68                  

Outstanding as of December 31, 2014

    2,542,139       9.94       8.5     $ 96,518  
                                 

Exercisable as of December 31, 2014

    1,210,861       4.22       8.4     $ 52,014  

As of December 31, 2014, there was $7,794 of total unrecognized compensation cost, net of expected forfeitures, related to unvested options. The cost is expected to be recognized over the remaining service period, having a weighted-average period of 2.4 years. Total share-based compensation cost related to the stock options for 2014, 2013 and 2012 was $8,509, $9,034 and $6,835, respectively, which is recorded in operating expenses in the consolidated statements of comprehensive income.


Restricted Stock – For awards issued prior to 2012, restricted stock awards vest in full on the third anniversary of the date of grant, subject to the grantee’s continued employment. Restricted stock awards issued in 2012 and after, vest in equal installments over three years, subject to the grantee’s continued employment or service. Restricted stock also includes performance shares, which were awarded for the first time in 2014. The number of performance shares that can be earned are contingent upon Company performance measures over a three-year period. Performance measures are based on a weighting of revenue growth and EBITDA margin, from which grantees may earn from 0% to 200% of their target performance share award. The performance period for the 2014 awards covers the years 2014 through 2016. The fair market value of the restricted awards at the time of the grant is amortized to expense over the period of vesting. The fair value of restricted awards is determined based on the market value of the Company's shares on the grant date. The compensation expense recognized for restricted share awards is net of estimated forfeitures.


Restricted stock vesting is net-share settled such that the Company withholds shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes. In effect, the Company repurchases these shares and classifies as treasury stock, and uses the cash on behalf of the employees to satisfy the tax withholding requirements. Total shares withheld were approximately 34,854, 163,458 and zero in 2014, 2013 and 2012, respectively, and were based on the value of the stock on the vesting dates as determined based upon an average of the Company’s high and low stock sales price on the vesting dates. Total payments for the employees’ tax obligations to the taxing authorities were $1,770, $6,571 and zero in 2014, 2013 and 2012, respectively, and are reflected as a financing activity within the consolidated statements of cash flows.


A summary of the Company's restricted share awards activity for the years ended December 31, 2014, 2013 and 2012 is as follows:


   

Shares

   

Weighted-

Average Grant-

Date Fair Value

 
                 

Non-vested as of December 31, 2011

    489,302     $ 13.93  

Granted

    195,771       26.94  

Vested

    -       -  

Forfeited

    (20,002 )     11.96  

Non-vested as of December 31, 2012

    665,071       17.75  
                 

Granted

    112,494       37.82  

Vested

    (450,537 )     14.21  

Forfeited

    (22,622 )     25.36  

Non-vested as of December 31, 2013

    304,406       29.68  
                 

Granted

    115,473       54.35  

Vested

    (105,123 )     28.31  

Forfeited

    (47,472 )     42.31  

Non-vested as of December 31, 2014

    267,284       38.72  

As of December 31, 2014, there was $5,394 of unrecognized compensation cost, net of expected forfeitures, related to non-vested restricted stock awards. That cost is expected to be recognized over the remaining service period, having a weighted-average period of 2.1 years. Total share-based compensation cost related to the restricted stock for 2014, 2013 and 2012 was $4,103, $3,074 and $3,645, respectively, which is recorded in operating expenses in the consolidated statements of comprehensive income.


During 2014, 2013 and 2012, 8,869, 7,291 and 10,864 shares, respectively, of fully vested stock were granted to certain members of the Company’s board of directors as a component of their compensation for their service on the board. Total compensation cost for these share grants in 2014, 2013 and 2012 was $509, $260 and $300, respectively, which is recorded in operating expenses in the consolidated statements of comprehensive income.