Stock-Based Compensation

We maintain the Second Amended and Restated 2010 Stock Incentive Plan (Stock Incentive Plan), which allows us to grant stock-based compensation awards, including stock options, restricted stock units, phantom stock, and unrestricted stock units. Under the Stock Incentive Plan, we have 10,473,956 shares of common stock reserved and authorized for issuance subject to stock splits, dividends, and other similar events. At September 30, 2017, 4,641,890 shares were available for grant under the Stock Incentive Plan. We issue new shares of common stock upon the exercise of stock options or when vesting conditions on restricted stock units are fully satisfied. These shares are subject to a fungible share provision such that the authorized share reserve is reduced by (i) one share for every one share subject to a stock option or share appreciation right granted under the Plan and (ii) 1.7 shares for every one share of common stock that was subject to an award other than an option or share appreciation right.

We also periodically award phantom stock units, which are settled in cash upon vesting and accounted for as liability-based awards with no impact to the shares available for grant.

In addition, we maintain the Employee Stock Purchase Plan (ESPP), for which approximately 348,000 shares of common stock were available for future issuance at September 30, 2017.

Unrestricted stock and ESPP activity for the three and nine months ended September 30, 2017 and 2016 was not significant.

Stock-Based Compensation Expense

Total stock-based compensation expense and the related tax benefit were as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
	(in thousands)
Stock options	$	717	$	602	$	1,974	$	1,741
Restricted stock units	4,170		4,595		12,538		10,834
Unrestricted stock awards	232		225		742		725
Phantom stock units	626		371		1,510		658
Total stock-based compensation	$	5,745	$	5,793	$	16,764	$	13,958

Related tax benefit	$	1,192	$	1,289	$	3,520	$	3,793

Stock Options

A summary of our stock option activity is as follows:



	Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value		Weighted Average Grant Date Fair Value
	(in thousands)				(years)	(in thousands)
Outstanding, January 1, 2016	1,180		$	48.31	5.7	$	405
Granted	191		40.40					$	13.27
Exercised	(35	)	35.31			214
Forfeited	(36	)	35.29
Expired	(312	)	55.11
Outstanding, September 30, 2016	988		$	45.57	6.8	$	13,732

Outstanding, January 1, 2017	959		$	45.64	6.6	$	19,125
Granted	135		65.94					$	21.98
Exercised	(36	)	38.68			972
Forfeited	(35	)	47.38
Expired	(47	)	67.43
Outstanding, September 30, 2017	976		$	47.60	6.5	$	30,320

Exercisable September 30, 2017	631		$	47.36	5.3	$	20,197

Expected to vest, September 30, 2017	344		$	48.03	8.6	$	10,123

At September 30, 2017, total unrecognized stock-based compensation expense related to nonvested stock options was $3.6 million, which is expected to be recognized over a weighted average period of approximately 1.6 years.

The weighted-average assumptions used to estimate the fair value of stock options granted and the resulting weighted average fair value are as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Expected volatility	29.0		%	33.7		%	32.5		%	33.5		%
Risk-free interest rate	1.8		%	1.3		%	2.0		%	1.3		%
Expected term (years)	5.5			5.5			5.5			5.5

Weighted average fair value	$	21.84		$	17.37		$	21.98		$	13.27

Restricted Stock Units

The following table summarizes restricted stock unit activity:



	Number of Restricted Stock Units		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value
	(in thousands)				(in thousands)
Outstanding, January 1, 2016	756
Granted	196		$	41.58
Released	(280	)			$	10,823
Forfeited	(50	)
Outstanding, September 30, 2016	622

Outstanding, January 1, 2017	701		$	38.04
Granted	141		65.54
Released	(340	)	38.51		$	13,097
Forfeited	(23	)	45.27
Outstanding, September 30, 2017	479		45.64

Vested but not released, September 30, 2017	9				$	660

Expected to vest, September 30, 2017	388				$	30,013

At September 30, 2017, total unrecognized compensation expense on restricted stock units was $25.6 million, which is expected to be recognized over a weighted average period of approximately 1.8 years.

The weighted-average assumptions used to estimate the fair value of performance-based restricted stock units granted and the resulting weighted average fair value are as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Expected volatility	27.9		%	28.8		%	28.0		%	30.0		%
Risk-free interest rate	1.4		%	0.8		%	1.0		%	0.7		%
Expected term (years)	2.3			2.3			1.7			1.8

Weighted average fair value	$	80.64		$	63.10		$	77.75		$	44.92

Phantom Stock Units

The following table summarizes phantom stock unit activity:



	Number of Phantom Stock Units		Weighted Average Grant Date Fair Value
	(in thousands)
Outstanding, January 1, 2016	—
Granted	63		$	40.11
Forfeited	(1	)
Outstanding, September 30, 2016	62

Expected to vest, September 30, 2016	56

Outstanding, January 1, 2017	62		$	40.11
Granted	32		65.55
Released	(20	)	40.11
Forfeited	(7	)	41.61
Outstanding, September 30, 2017	67		52.24

Expected to vest, September 30, 2017	67

At September 30, 2017, total unrecognized compensation expense on phantom stock units was $3.9 million, which is expected to be recognized over a weighted average period of approximately 1.8 years. As of September 30, 2017 and December 31, 2016, we have recognized a phantom stock liability of $1.4 million and $1.0 million, respectively, within wages and benefits payable in the Consolidated Balance Sheets.