XML 28 R14.htm IDEA: XBRL DOCUMENT

Stock Options, Restricted Stock and Restricted Stock Units

12 Months Ended

Dec. 31, 2015

Stock Options, Restricted Stock and Restricted Stock Units [Abstract]

Stock Options, Restricted Stock and Restricted Stock Units

7. Stock Options, Restricted Stock and Restricted Stock Units

On May 5, 2015, the Company’s shareholders approved the Strayer Education, Inc. 2015 Equity Compensation Plan (the “2015 Plan”), which replaced the Strayer Education, Inc. 2011 Equity Compensation Plan (the “2011 Plan”). The 2015 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 2015 Plan is ten years. The number of shares of common stock reserved for issuance under the 2015 Plan is 500,000 authorized but unissued shares, plus the number of shares available for grant under the 2011 Plan at the time of stockholder approval of the 2015 Plan, and plus the number of shares which may in the future become available under the 2011 Plan due to forfeitures of outstanding awards.

In February 2015, the Company’s Board of Directors approved grants of 71,991 shares of restricted stock to certain employees. These shares, which vest 100% in February 2019, were granted pursuant to the 2011 Plan. The Company’s stock price closed at $70.15 on the date of these restricted stock grants.

In May 2015, the Company’s Board of Directors approved grants of 40,867 shares of restricted stock, which vest in their entirety four years from the date of grant, and were granted pursuant to the 2015 Plan. The Company’s Board of Directors also approved grants of 13,797 shares of restricted stock. These shares, which vest annually 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 and the 2015 Plan. The Company’s stock price closed at $48.94 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

Restricted Stock and Restricted Stock Units

The table below sets forth the restricted stock and restricted stock units activity for each of the three years in the period ended December 31, 2015:

			Number of shares					Weighted-average grant price
Balance, December 31, 2012			434,439					$	178.88
Grants			225,741						57.90
Vested shares			(51,916	)					164.22
Forfeitures			(120,491	)					140.30
Balance, December 31, 2013			487,773					$	131.51
Grants			108,606						38.95
Vested shares			(69,434	)					158.97
Forfeitures			(2,729	)					93.44
Balance, December 31, 2014			524,216					$	115.67
Grants			126,655						61.00
Vested shares			(13,725	)					52.94
Forfeitures			(2,819	)					115.55
Balance, December 31, 2015			634,327					$	104.66

Stock Options

The table below sets forth the stock option activity for each of the three years in the period ended December 31, 2015 and other stock option information at December 31, 2015:

		Number of shares					Weighted-average exercise price					Weighted- average remaining contractual life (years)				Aggregate intrinsic value(1) (in thousands)
Balance, December 31, 2012		100,000					$	107.28				0.1				$	—
Grants		100,000						51.95
Exercises		—						—
Forfeitures		(100,000	)					107.28
Balance, December 31, 2013		100,000					$	51.95				7.0				$	—
Grants		—						—
Exercises		—						—
Forfeitures		—						—
Balance, December 31, 2014		100,000					$	51.95				6.0				$	2,233
Grants		—						—
Exercises		—						—
Forfeitures/Expirations		—						—
Balance, December 31, 2015		100,000					$	51.95				5.1				$	817
Exercisable, December 31, 2015		100,000					$	51.95				5.1				$	817

____________

(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.

The number of shares exercisable as of December 31, 2013, 2014 and 2015 are as follows:

		Number of shares		Weighted-average exercise price
Exercisable, December 31, 2013		—		$	51.95
Exercisable, December 31, 2014		—		$	51.95
Exercisable, December 31, 2015		100,000		$	51.95

Valuation and Expense Information under Stock Compensation Topic ASC 718

At December 31, 2015, total stock-based compensation cost which has not yet been recognized was $25.7 million for unvested restricted stock, restricted stock units, and stock option awards. This cost is expected to be recognized over the next 33 months on a weighted-average basis. Awards of approximately 467,000 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 over the respective vesting periods. Such a determination involves significant judgment surrounding the Company’s ability to maintain regulatory compliance. If the performance targets are not reached during the respective 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 for the years ended December 31, 2013, 2014 and 2015 (in thousands):

				2013					2014					2015
Instruction and educational support				$	1,976				$	1,736				$	2,134
Marketing					—					—					—
Admissions advisory					—					—					—
General and administration					7,315					7,717					8,079
Stock-based compensation expense included in operating expense					9,291					9,453					10,213
Tax benefit					3,698					3,734					4,032
Stock-based compensation expense, net of tax				$	5,593				$	5,719				$	6,181

The following table summarizes information regarding share-based payment arrangements for the years ended December 31, 2013, 2014 and 2015 (in thousands):

				2013						2014						2015
Proceeds from stock options exercised				$	—					$	—					$	—
Tax shortfall related to share-based payment arrangements				$	(3,567	)				$	(2,039	)				$	(24	)
Intrinsic value of stock options exercised				$	—					$	—					$	—