XML 50 R13.htm IDEA: XBRL DOCUMENT v2.4.0.8
Stock Options, Restricted Stock and Restricted Stock Units
 6 Months Ended
Jun. 30, 2014
Stock Options, Restricted Stock and Restricted Stock Units [Abstract]  
Stock Options, Restricted Stock and Restricted Stock Units
6.
Stock Options, Restricted Stock and Restricted Stock Units
 
In April 2011, the Company’s stockholders approved the Strayer Education, Inc. 2011 Equity Compensation Plan (the “Plan”), which replaced the Company’s 1996 equity compensation plan (the “1996 Plan”) and made 300,000 new shares available for issuance as equity compensation. In addition, shares previously available for issuance under the 1996 Plan were effectively carried over and are available for issuance under the Plan, for a total of approximately 350,000 shares that were made available for issuance as equity compensation under the Plan. The Plan provides for the granting of restricted stock, restricted stock units, stock options intended to qualify as incentive stock options, options that do not qualify as incentive stock options, and other forms of equity compensation and performance-based awards to employees, officers and directors of the Company, or to a consultant or advisor to the Company, at the discretion of the Board of Directors. Vesting provisions are at the discretion of the Board of Directors. Options may be granted at option prices based at or above the fair market value of the shares at the date of grant. The maximum term of the awards granted under the Plan is ten years.
 
In February 2014, the Company’s Board of Directors approved grants of 46,064 shares of restricted stock to certain individuals. These shares, which vest 100% in February 2018, were granted pursuant to the Plan. The Company’s stock price closed at $33.65 on the date of these restricted stock grants.
 
In May 2014, the Company’s Board of Directors approved grants of 46,674 shares of restricted stock. These shares, which vest in their entirety four years from the date of grant, were granted pursuant to the Plan. The Company’s Board of Directors also approved grants of 15,868 shares of restricted stock. These shares, which vest over a three-year period, were awarded to non-employee members of the Company’s Board of Directors, as part of the Company’s annual director compensation program. The Company’s stock price closed at $42.85 on the date of these restricted stock grants.
 
Dividends paid on unvested restricted stock are reimbursed to the Company if the recipient forfeits his or her shares as a result of termination of employment prior to vesting in the award, unless waived by the Board of Directors.
 
Restricted Stock and Restricted Stock Units
 
The table below sets forth the restricted stock and restricted stock units activity for the six months ended June 30, 2014:
 
 
 
Number
of shares
or units
 
 
Weighted-
average grant
price
 
Balance, December 31, 2013
 
 
487,773
 
 
$
131.51
 
Grants
 
 
108,606
  
 
$
38.95
 
Vested shares
 
 
(61,600
)
 
$
175.13
 
Forfeitures
 
 
(227
)
 
$
132.23
 
Balance, June 30, 2014
 
 
534,552
  
 
$
115.73
 
 
Stock Options
 
The table below sets forth the stock option activity for the six months ended June 30, 2014 and other stock option information at June 30, 2014:
 
 
 
Number of
shares
 
 
Weighted-average exercise price
 
 
Weighted-average
 remaining
contractual
life (years)
 
 
Aggregate intrinsic
value(1)
(in thousands)
 
Balance, December 31, 2013
 
 
100,000
 
 
$
51.95
 
 
 
7.0
 
 
$
—
 
Grants
 
 
—
  
 
 
—
 
 
 
 
 
 
 
 
 
Exercises
    
—
      
—
                  
Forfeitures/Expirations
 
 
—
  
 
 
—
 
 
 
 
 
 
 
 
 
Balance, June 30, 2014
 
 
100,000
  
 
$
51.95
 
 
 
6.5
 
 
$
 56
 
Exercisable, June 30, 2014
 
 
—
 
 
$
—
 
 
 
—
 
 
$
—
 
 
(1)
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the respective trading day and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holder had all options been exercised on the respective trading day. The amount of intrinsic value will change based on the fair market value of the Company’s common stock.
 
Valuation and Expense Information under Stock Compensation Topic ASC 718
 
At June 30, 2014, total stock-based compensation cost which has not yet been recognized was $33.6 million for unvested restricted stock, restricted stock units, and stock option awards. This cost is expected to be recognized over the next 47 months on a weighted-average basis. Awards of approximately 398,000 shares of restricted stock and restricted stock units are subject to performance conditions. The accrual for stock-based compensation for performance awards is based on the Company’s estimates that such performance criteria are probable of being achieved. Such a determination involves significant judgment surrounding the Company’s ability to maintain regulatory compliance. If the performance targets are not reached during the vesting period, or it is determined it is more likely than not that the performance criteria will not be achieved, related compensation expense is adjusted.
 
The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items (in thousands):
 
 
 
For the three months
ended June 30,
 
 
For the six months
ended June 30,
 
 
 
2013
 
 
2014
 
 
2013
 
 
2014
 
Instruction and educational support
 
$
844
 
 
$
475
 
 
$
1,941
 
 
$
909
 
Marketing
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
Admissions advisory
 
 
—
 
 
 
—
 
 
 
—
 
 
 
—
 
General and administration
 
 
2,138
 
 
 
2,071
 
 
 
3,291
 
 
 
3,598
 
Stock-based compensation expense included in operating expense
 
 
2,982
 
 
 
2,546
 
 
 
5,232
 
 
 
4,507
 
Tax benefit
 
 
1,187
 
 
 
1,013
 
 
 
2,082
 
 
 
1,794
 
Stock-based compensation expense, net of income tax
 
$
1,795
 
 
$
1,533
 
 
$
3,150
 
 
$
2,713
 
 
During the six months ended June 30, 2013 and 2014, the Company recognized a tax shortfall related to share-based payment arrangements of $3.5 million and $1.8 million, respectively. No stock options were exercised during the six months ended June 30, 2013 or 2014.