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Stock-Based Compensation Plans | 9 Months Ended
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Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-Based Compensation Plans | 6. Stock-Based Compensation Plans Employee Stock Purchase Plan Under the Company’s 1999 Employee Stock Purchase Plan, as amended (the “ESPP”), a total of 4,500,000 shares of the Company’s common stock have been reserved for issuance to eligible employees. Participating employees are permitted to designate up to the lesser of $25,000 or 10% of their annual base compensation for the purchase of common stock under the ESPP. Purchases under the ESPP are made one calendar month after the end of each fiscal quarter. The price for shares of common stock purchased under the ESPP is 85% of the stock’s fair market value on the last business day of the three-month participation period. Shares issued under the ESPP during the nine months ended September 30, 2016 and 2015 totaled 141,484 and 123,866, respectively. Stock Incentive Plans – 2016 Equity and Performance Incentive Plan On March 23, 2016, the Company’s Board of Directors (the “Board”) approved the 2016 Equity and Performance Incentive Plan (the “2016 Incentive Plan”). The 2016 Incentive Plan is intended to meet the Company’s objective of balancing stockholder concerns about dilution with the need to provide appropriate incentives to achieve Company performance objectives. The 2016 Incentive Plan was adopted by the stockholders on June 14, 2016. Following the adoption of the 2016 Incentive Plan, the 2005 Equity and Performance Incentive Plan, as amended (the “2005 Incentive Plan”) was terminated. Termination of the 2005 Incentive Plan did not affect any equity awards outstanding under the 2005 Incentive Plan. The 2016 Incentive Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, performance awards, and other awards (“Awards”). Subject to adjustment in certain circumstances, the maximum number of shares of Common Stock that may be issued or transferred in connection with Awards granted under the 2016 Incentive Plan will be the sum of (i) 8,000,000 shares of Common Stock and (ii) any shares of Common Stock that are represented by options previously granted under the Current 2005 Incentive Plan which are forfeited, expire, or are canceled without delivery of Common Stock or which result in the forfeiture or relinquishment of Common Stock back to the Company. To the extent Awards granted under the 2016 Incentive Plan terminate, expire, are canceled without being exercised, are forfeited or lapse for any reason, the shares of Common Stock subject to such Award will again become available for grants under the 2016 Incentive Plan. The 2016 Incentive Plan expressly prohibits re-pricing stock options and appreciation rights. The 2016 Incentive Plan also, subject to certain limited exceptions, expressly requires a one-year vesting period for all stock options and appreciation rights. No eligible person selected by the Board to receive awards (“Participant”) will receive stock options, stock appreciation rights, restricted stock, restricted stock units and other awards under the 2016 Incentive Plan, during any calendar year, for more than 3,000,000 shares of Common Stock. In addition, no Participant may receive performance shares or performance units having an aggregate value on the date of grant in excess of $9,000,000 during any calendar year. Each of the limits described above may be adjusted equitably to accommodate a change in the capital structure of the Company. Stock options granted pursuant to the 2016 Incentive Plan are granted at an exercise price not less than the market value per share of the Company’s common stock on the date of the grant. Under the 2016 Incentive Plan, the term of the outstanding options may not exceed ten years nor be less than one year. Vesting of options is determined by the Compensation Committee of the Board of Directors, the administrator of the 2016 Incentive Plan, and can vary based upon the individual award agreements. In addition, outstanding options do not have dividend equivalent rights associated with them under the 2016 Incentive Plan. The Board may issue or transfer shares of Common Stock to Participants under a restricted stock grant for consideration or no consideration, and subject to restrictions, as determined by the Board. All restricted stock Awards will transfer ownership of such shares of restricted stock to the Participant and entitle the Participant to voting, dividend and other ownership rights, but the Participant’s ownership of the restricted shares shall be subject to substantial risk of forfeiture and restrictions on transfer. The Board may establish conditions under which restrictions will lapse over a period of time based upon the achievement of performance goals or according to such other criteria as the Board deems appropriate (the “Restriction Period”). An Award Agreement for restricted stock Awards may specify any Management Objectives that, if achieved, will result in the termination or early termination of the restrictions on the restricted shares including, without limitation, any minimum acceptable levels of achievement or formulas for determining the number of restricted shares on which the restrictions will terminate. The Board may award Participants “Performance Shares” or “Performance Units” (collectively, “Performance Awards”) which will become payable to a Participant upon the achievement of specified “Management Objectives”, which are measurable objectives established for Participants. Each Award Agreement for Performance Awards will specify: (i) the number of Performance Shares or Performance Units granted; (ii) the period of time established for the Participant to achieve the Management Objectives (the “Performance Period”); (iii) the Management Objectives and a minimum acceptable level of achievement as well as a formula for determining the number of Performance Shares or Performance Units earned if performance is at or above the minimum level but short of full achievement of the Management Objectives; and (iv) any other terms that the Board may deem appropriate. Stock-Based Payments A summary of stock options issued pursuant to the Company’s stock incentive plans is as follows:
|  | Number of Shares |  |  | Weighted- Average Exercise Price |  |  | Weighted- Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value of In-the-Money Options |
Outstanding as of December 31, 2015 |  |  | 5,799,076 |  |  | $ | 14.37 |  |  |  |  |  |  |  |  |
Granted |  |  | 2,284,500 |  |  |  | 17.92 |  |  |  |  |  |  |  |  |
Exercised |  |  | (754,619 | ) |  |  | 11.51 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (351,625 | ) |  |  | 18.84 |  |  |  |  |  |  |  |  |
Outstanding as of September 30, 2016 |  |  | 6,977,332 |  |  | $ | 15.61 |  |  |  | 6.77 |  |  | $ | 27,141,346 |
Exercisable as of September 30, 2016 |  |  | 3,504,839 |  |  | $ | 12.78 |  |  |  | 4.88 |  |  | $ | 23,679,548 |
As of September 30, 2016, the Company expects that 93.3% of the options will vest over the vesting period. The weighted-average grant date fair value of stock options granted during the nine months ended September 30, 2016 and 2015 was $5.59 and $6.49, respectively. The Company issued treasury shares for the exercise of stock options during the nine months ended September 30, 2016 and 2015. The total intrinsic value of stock options exercised during the nine months ended September 30, 2016 and 2015 was $6.7 million and $12.1 million, respectively. The fair value of options that do not vest based on the achievement of certain market conditions granted during the nine months ended September 30, 2016 and 2015 were estimated on the date of grant using the Black-Scholes option-pricing model, a pricing model acceptable under U.S. GAAP, with the following weighted-average assumptions:
|  | Nine Months Ended |  |  | Nine Months Ended |
|  | September 30, 2016 |  |  | September 30, 2015 |
Expected life (years) |  |  | 5.93 |  |  |  | 5.93 |
Interest rate |  |  | 1.2 | % |  |  | 1.4 | %
Volatility |  |  | 29.7 | % |  |  | 32.1 | %
Dividend yield |  |  | — |  |  |  | — |
Expected volatilities are based on the Company’s historical common stock volatility derived from historical stock price data for historical periods commensurate with the options’ expected life. The expected life is the average number of years that the Company estimated that the options will be outstanding, based primarily on historical employee option exercise behavior. The risk-free interest rate is based on the implied yield currently available on United States Treasury zero coupon issues with a term equal to the expected term at the date of grant of the options. The expected dividend yield is zero as the Company has historically paid no dividends and does not anticipate dividends to be paid in the future. During the nine months ended September 30, 2016, the Company granted supplemental stock options with three tranches at a grant date fair value of $7.46, $7.06 and $6.50, respectively, per share. These options vest, if at all, based upon (i) tranche one - any time after the third anniversary date if the stock has traded at 133% of the exercise price for at least 20 consecutive trading days, (ii) tranche two - any time after the fourth anniversary date if the stock has traded at 167% of the exercise price for at least 20 consecutive trading days, and (iii) tranche three - any time after the fifth anniversary date if the stock has traded at 200% of the exercise price for at least 20 consecutive trading days. The employees must also remain employed with the Company as of the anniversary date in order for the options to vest. The exercise price of the supplemental stock options is the closing market price on the date the awards were granted. In order to determine the grant date fair value of the supplemental stock options, a Monte Carlo simulation model was used. With respect to options granted that vest based on the achievement of certain market conditions, the grant date fair value of such options was estimated using the following weighted-average assumptions:
|  | Nine Months Ended |  |  | Nine Months Ended |
|  | September 30, 2016 |  |  | September 30, 2015 |
Expected life (years) |  |  | 7.50 |  |  |  | 7.50 |
Interest rate |  |  | 1.6 | % |  |  | 1.7 | %
Volatility |  |  | 41.6 | % |  |  | 41.9 | %
Dividend yield |  |  | — |  |  |  | — |
Stock Incentive Plan – Online Resources Corporation (“ORCC”) Stock Incentive Plan, as amended and restated A summary of transaction stock options issued pursuant to the Company’s stock incentive plans is as follows:
|  | Number of Shares |  |  | Weighted- Average Exercise Price |  |  | Weighted- Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value of In-the-Money Options |
Outstanding as of December 31, 2015 |  |  | 21,036 |  |  | $ | 29.76 |  |  |  |  |  |  |  |  |
Exercised |  |  | (4,299 | ) |  |  | 13.92 |  |  |  |  |  |  |  |  |
Cancelled |  |  | (2,634 | ) |  |  | 40.51 |  |  |  |  |  |  |  |  |
Outstanding as of September 30, 2016 |  |  | 14,103 |  |  | $ | 32.58 |  |  |  | 1.64 |  |  | $ | — |
Exercisable as of September 30, 2016 |  |  | 14,103 |  |  | $ | 32.58 |  |  |  | 1.64 |  |  | $ | — |
A summary of nonvested long-term incentive program performance share awards (“LTIP performance shares”) outstanding as of September 30, 2016 and changes during the period are as follows:
Nonvested LTIP Performance Shares |  | Number of Shares at Expected Attainment |  |  | Weighted- Average Grant Date Fair Value |
Nonvested as of December 31, 2015 |  |  | 889,295 |  |  | $ | 19.13 |
Granted |  |  | 1,059,428 |  |  |  | 17.92 |
Forfeited |  |  | (152,746 | ) |  |  | 18.64 |
Nonvested as of September 30, 2016 |  |  | 1,795,977 |  |  | $ | 18.46 |
A summary of nonvested restricted share awards (“RSAs”) as of September 30, 2016 and changes during the period are as follows:
|  | Number of |  |  |  |
|  | Restricted |  |  | Weighted-Average Grant |
Nonvested Restricted Share Awards |  | Share Awards |  |  | Date Fair Value |
Nonvested as of December 31, 2015 |  |  | 149,262 |  |  | $ | 22.62 |
Granted |  |  | 148,322 |  |  |  | 20.19 |
Vested |  |  | (114,219 | ) |  |  | 22.64 |
Forfeited |  |  | (11,257 | ) |  |  | 21.01 |
Nonvested as of September 30, 2016 |  |  | 172,108 |  |  | $ | 20.62 |
During the nine months ended September 30, 2016, 114,219 shares of the RSAs vested. The Company withheld 9,062 of those shares to pay the employees’ portion of the minimum payroll withholding taxes. A summary of nonvested Performance-Based Restricted Share Awards (“PBRSAs”) as of September 30, 2016 and changes during the period are as follows:
|  | Number of |  |  |  |
|  | Performance-Based |  |  |  |
|  | Restricted |  |  | Weighted-Average Grant |
Nonvested Performance-Based Restricted Share Awards |  | Share Awards |  |  | Date Fair Value |
Nonvested as of December 31, 2015 |  |  | 938,863 |  |  | $ | 23.42 |
Vested |  |  | (169,567 | ) |  |  | 24.41 |
Forfeited |  |  | (48,081 | ) |  |  | 22.23 |
Change in attainment for 2015 grants |  |  | (18,232 | ) |  |  | 24.41 |
Nonvested as of September 30, 2016 |  |  | 702,983 |  |  | $ | 23.23 |
During the nine months ended September 30, 2016, 169,567 shares of the PBRSAs vested. The Company withheld 59,659 of those shares to pay the employees’ portion of the minimum payroll withholding taxes. Retention Restricted Share Awards During the nine months ended September 30, 2016, pursuant to the Company’s 2005 Incentive Plan, the Company granted Retention Restricted Share Awards (“Retention RSAs”). The Retention RSA awards granted to named executive officers have a requisite service period (vesting period) of 1.3 years and vest 50% on July 1, 2016 and 50% on July 1, 2017. Retention RSA awards granted to employees other than named executive officers have a vesting period of 0.8 years and vest 50% on July 1, 2016 and 50% on January 1, 2017. Under each agreement, stock is issued without direct cost to the employee. The Company estimates the fair value of the Retention RSAs based upon the market price of the Company’s stock at the date of grant. The Retention RSA grants provide for the payment of dividends on the Company’s common stock, if any, to the participant during the requisite service period and the participant has voting rights for each share of common stock. The Company recognizes compensation expense for Retention RSAs on a straight-line basis over the requisite service period. A summary of nonvested Retention RSAs as of September 30, 2016 and changes during the period are as follows:
|  | Number of |  |  |  |
|  | Retention Restricted |  |  | Weighted-Average Grant |
Nonvested Retention Restricted Share Awards |  | Share Awards |  |  | Date Fair Value |
Nonvested as of December 31, 2015 |  |  | — |  |  | $ | — |
Granted |  |  | 473,069 |  |  |  | 17.89 |
Vested |  |  | (226,526 | ) |  |  | 17.89 |
Forfeited |  |  | (34,724 | ) |  |  | 17.89 |
Nonvested as of September 30, 2016 |  |  | 211,819 |  |  | $ | 17.89 |
During the nine months ended September 30, 2016, 226,526 shares of the Retention RSAs vested. The Company withheld 76,421 of those shares to pay the employees’ portion of the minimum payroll withholding taxes. A summary of nonvested PAY.ON RSAs as of September 30, 2016 and changes during the period are as follows:
|  | Number of |  |  |  |
|  | Retention Restricted |  |  | Weighted-Average Grant |
Nonvested PAY.ON Restricted Share Awards |  | Share Awards |  |  | Date Fair Value |
Nonvested as of December 31, 2015 |  |  | 476,750 |  |  | $ | 23.60 |
Vested |  |  | (119,186 | ) |  |  | 23.60 |
Nonvested as of September 30, 2016 |  |  | 357,564 |  |  | $ | 23.60 |
As of September 30, 2016, there were unrecognized compensation expenses of $14.6 million related to nonvested stock options, $2.7 million related to the nonvested RSAs, $21.3 million related to the LTIP performance shares, $5.5 million related to nonvested PBRSAs, $2.1 million related to nonvested Retention RSAs, which the Company expects to recognize over weighted-average periods of 2.1 years, 1.4 years, 2.2 years, 1.1 years, and 0.4 years, respectively. The Company recorded stock-based compensation expenses for the three months ended September 30, 2016 and 2015 related to stock options, LTIP performance shares, RSAs, PBRSAs, and the ESPP of $10.8 million and $0.8 million, respectively, with corresponding tax benefits of $4.1 million and $0.3 million, respectively. The Company recorded stock-based compensation expenses for the nine months ended September 30, 2016 and 2015 related to stock options, LTIP performance shares, RSAs, PBRSAs, and the ESPP of $33.8 million and $10.1 million, respectively, with corresponding tax benefits of $12.7 million and $3.8 million, respectively. The Company recognizes compensation costs for stock option awards that vest with the passage of time with only service conditions on a straight-line basis over the requisite service period. The Company recognizes compensation costs for stock option awards that vest with service and market-based conditions on a straight-line basis over the longer of the requisite service period or the estimated period to meet the defined market-based condition.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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