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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-Based Compensation | Stock-Based Compensation The company’s 2013 Omnibus Incentive Plan (the “2013 Omnibus Plan”) was approved by shareholders on May 7, 2013 and replaced the 2003 Incentive Stock and Awards Plan (the “2003 Stock Plan”) and 2004 Non-Employee Director Stock and Awards Plan (the “2004 Stock Plan”). The 2013 Omnibus Plan also replaced the company’s Short-Term Incentive Plan (the “STIP”) as of December 31, 2013. The 2003 Stock Plan, the 2004 Stock Plan and the STIP are referred to as the “Prior Plans.” No new awards may be granted under the Prior Plans after the respective termination dates, but the Prior Plans continue to govern awards outstanding; outstanding awards will continue in force and effect until vested, exercised or forfeited pursuant to their terms. The 2013 Omnibus Plan provides for both short-term and long-term incentive awards for employees and non-employee directors. Stock-based awards may take the form of stock options, stock appreciation rights, restricted stock, restricted stock units, and performance share or performance unit awards. The total number of shares of the company’s common stock originally available for awards under the 2013 Omnibus Plan is 8.0 million shares and is subject to adjustments for stock splits, stock dividends and certain other transactions or events in the future. The 2003 Stock Plan provided for both short-term and long-term incentive awards for employees. Options granted under the plan prior to 2011 became exercisable in 25% increments beginning on the second anniversary of the grant date over a four-year period and expire ten years subsequent to the grant date. Option grants to employees beginning in 2011 became exercisable in 25% increments beginning on the first anniversary of the grant date over a four-year period and expire ten years subsequent to the grant date. Restrictions on restricted stock awarded under this plan lapse 100% on the third anniversary of the grant date. Performance shares granted under the 2013 Omnibus Plan and the 2003 Stock Plan are earned based on the extent to which performance goals are met over the applicable performance period. The performance goals and the applicable performance period vary for each grant year. An explanation of the performance goals and the applicable performance period for the 2014, 2013 and 2012 awards is set forth below. There have been no awards of stock appreciation rights or performance units under the 2003 Stock Plan. The 2004 Stock Plan provided for the granting of stock options to non-employee members of the Board of Directors. No new awards may be made under the 2004 Stock Plan. Stock options awarded under the plan were granted at an exercise price equal to the market price of the common stock at the date of grant and vest immediately and expire ten years subsequent to the grant date. Restrictions on restricted stock awarded to date under the plan lapse on the third anniversary of the award date. The company recognizes expense for all stock-based compensation on a straight-line basis over the vesting period of the entire award. Total stock-based compensation expense before tax was $12.2 million, $12.6 million and $14.9 million during 2015, 2014, and 2013, respectively. In 2015, the company also recognized $2.2 million of expense before tax related to restricted stock retention awards; this expense is included in "Separation expense" in the Consolidated Statements of Operations. Stock Options Any option grants to directors are exercisable immediately upon granting and expire ten years subsequent to the grant date. For all outstanding grants made to officers and employees prior to 2011, options become exercisable in 25% increments annually over a four-year period beginning on the second anniversary of the grant date and expire ten years subsequent to the grant date. Starting with 2011 grants to officers and directors, options become exercisable in 25% increments annually over a four-year period beginning on the first anniversary of the grant date and expire ten years subsequent to the grant date. The company granted options to acquire 0.7 million, 0.3 million and 0.4 million shares of common stock during 2015, 2014, and 2013, respectively. Stock-based compensation expense is calculated by estimating the fair value of incentive and non-qualified stock options at the time of grant and is amortized over the stock options’ vesting period. The company recognized $4.4 million ($2.8 million after taxes), $5.7 million ($3.6 million after taxes) and $6.3 million ($4.0 million after taxes) of compensation expense associated with stock options during 2015, 2014, and 2013, respectively. A summary of the company’s stock option activity is as follows (in millions, except weighted average exercise price per share):
|  | Shares |  | Weighted Average Exercise Price |  | Aggregate Intrinsic Value
Options outstanding as of January 1, 2014 |  | 7.0 |  |  | $ | 16.00 |  |  |  |
Granted |  | 0.3 |  |  | 29.08 |  |  |  |
Exercised |  | (1.7 | ) |  | 10.92 |  |  |  |
Cancelled |  | — |  |  | 27.07 |  |  |  |
Options outstanding as of December 31, 2014 |  | 5.6 |  |  | $ | 18.23 |  |  |  |
Granted |  | 0.7 |  |  | 21.02 |  |  |  |
Exercised |  | (0.5 | ) |  | 9.63 |  |  |  |
Cancelled |  | (0.3 | ) |  | 23.70 |  |  |  |
Options outstanding as of December 31, 2015 |  | 5.5 |  |  | $ | 19.04 |  |  | $ | 11.0 |
Options exercisable as of: |  |  |  |  |  |  |  |  |
December 31, 2015 |  | 4.7 |  |  | $ | 18.64 |  |  | $ | 11.0 |
The outstanding stock options at December 31, 2015 have a range of exercise prices from $4.41 to $47.84 per share. The following table shows the options outstanding and exercisable by range of exercise prices at December 31, 2015 (in millions, except range of exercise price per share, weighted average remaining contractual life and weighted average exercise price):
|  | Outstanding |  | Weighted Average Remaining Contractual |  | Weighted Average |  | Exercisable |  | Weighted Average
Range of Exercise Price per Share |  | Options |  | Life (Years) |  | Exercise Price |  | Options |  | Exercise Price
$4.41 - $11.34 |  | 0.6 |  |  | 2.6 |  | $ | 4.41 |  |  | 0.6 |  |  | $ | 4.41 |
$11.35 - $16.79 |  | 1.6 |  |  | 3.4 |  | 13.26 |  |  | 1.5 |  |  | 12.88 |
$16.80 - $21.80 |  | 1.6 |  |  | 4.4 |  | 19.82 |  |  | 1.1 |  |  | 19.36 |
$21.81 - $27.03 |  | 0.5 |  |  | 0.3 |  | 26.11 |  |  | 0.5 |  |  | 26.11 |
$27.04- $29.52 |  | 0.7 |  |  | 2.9 |  | 29.34 |  |  | 0.6 |  |  | 29.41 |
$29.53 - $30.47 |  | 0.1 |  |  | 8.2 |  | 30.47 |  |  | — |  |  | 30.47 |
$30.48 - $47.84 |  | 0.4 |  |  | 1.5 |  | 38.87 |  |  | 0.4 |  |  | 38.87 |
|  | 5.5 |  |  | 3.1 |  | $ | 19.04 |  |  | 4.7 |  |  | $ | 18.64 |
The company uses the Black-Scholes valuation model to value stock options. The company used its historical stock prices as the basis for its volatility assumption. The assumed risk-free rates were based on ten-year U.S. Treasury rates in effect at the time of grant. The expected option life represents the period of time that the options granted are expected to be outstanding and is based on historical experience. As of December 31, 2015, the company has $4.5 million of unrecognized compensation expense before tax related to stock options, which will be recognized over a weighted average period of 2.9 years. The weighted average fair value of options granted per share during the years ended December 31, 2015, 2014, and 2013 was $10.93, $14.84, and $9.00, respectively. The fair value of each option grant was estimated at the date of grant using the Black-Scholes option-pricing method with the following assumptions:
|  | 2015 |  | 2014 |  | 2013
Expected Life (years) |  | 6.0 |  |  | 6.0 |  |  | 6.0 |
Risk-free Interest rate |  | 1.8 | % |  | 1.9 | % |  | 1.1 | %
Expected volatility |  | 56.0 | % |  | 55.0 | % |  | 56.0 | %
Expected dividend yield |  | 0.3 | % |  | 0.4 | % |  | 0.6 | %
For the years ended December 31, 2015, 2014, and 2013 the total intrinsic value of stock options exercised was $5.6 million, $28.5 million, and $6.9 million, respectively. Restricted Stock Awards The company granted restricted stock of 0.4 million, 0.0 million and 0.1 million shares of restricted stock during 2015, 2014, and 2013, respectively. Restricted stock award expense is based on the fair value of the company’s shares as of the grant date. The company recognized $0.3 million ($0.2 million after taxes), $1.0 million ($0.6 million after taxes), and $2.8 million ($1.8 million after taxes) of compensation expense associated with restricted stock for the years ended December 31, 2015, 2014, and 2013, respectively. The restrictions on all shares of restricted stock granted in 2013 generally expire on the third anniversary of the applicable grant date. The 0.4 million of restricted stock awards granted to employees in April 2015 were issued as retention awards to provide additional incentive for the employees to continue in employment and contribute toward the successful completion of the separation. Under the retention agreements, each employee was granted restricted shares of common stock of the company that will vest on the second anniversary of the separation if the employee has been continuously employed with the company or an affiliate through that second anniversary; if the separation has not occurred by April 8, 2017, the awards will be forfeited. In 2015, the company recognized $2.2 million of expense before tax on accelerated vesting of 0.1 million of retention awards under severance agreements; this expense is included in "Separation expense" in the Consolidated Statements of Operations. The company will begin to recognize expense related to the unvested retention awards upon Spin-Off, when the performance condition (the Spin-Off) is satisfied and vesting becomes probable. A summary of activity for restricted stock awards for the year ended December 31, 2015 is as follows (in millions except weighted average grant date fair value):
|  | Shares |  | Weighted Average Grant Date Fair Value
Unvested as of January 1, 2015 |  | 0.2 |  |  | $ | 16.58 |
Granted |  | 0.4 |  |  | 21.73 |
Vested |  | (0.2 | ) |  | 17.12 |
Cancelled |  | — |  |  | 21.18 |
Unvested as of December 31, 2015 |  | 0.4 |  |  | $ | 21.40 |
Restricted Stock Units The company granted 0.6 million, 0.4 million and 0.5 million of restricted stock units in 2015, 2014, and 2013, respectively. The restricted stock units are earned either based on service over the vesting period, or based on service over the vesting period and on the extent to which performance goals are met over the applicable performance period (“performance shares”). The performance goals and the applicable performance period vary for performance shares each grant year. The company recognized $7.5 million ($4.7 million after taxes), $5.9 million ($3.8 million after taxes) and $5.8 million ($3.6 million after taxes) of compensation expense associated with restricted stock units during 2015, 2014 and 2013, respectively. The restricted stock units granted to employees in 2015 generally vest on the third anniversary of the grant date, assuming continued employment. The restricted stock units granted to directors in 2015 generally vest on the second anniversary of the grant date, assuming continued service. Performance shares were not granted in 2015 due to anticipated separation. The restricted stock units granted to employees in 2014 generally vest on the third anniversary of the grant date, assuming continued employment. The restricted stock units granted to directors in 2014 vest on the second anniversary of the grant date, assuming continued service. The performance shares granted in 2014 are earned based on the extent to which performance goals are met by the company over a three-year period from January 1, 2014 to December 31, 2016. The performance goals for the performance shares granted in 2014 are based fifty percent (50%) on total shareholder return relative to a peer group of companies over the three-year period and fifty percent (50%) on EVA® improvement over the three-year period. Depending on the foregoing factors, the number of shares awarded could range from zero to 0.5 million for the 2014 performance share grants. For these awards, the expense is based on the fair value of the company's shares as of the grant date for the EVA® improvement criteria and a Monte Carlo model for the total shareholder return criteria. The performance shares granted in 2013 were earned based on the extent to which performance goals are met by the company over a three-year period from January 1, 2013 to December 31, 2015. The performance goals for the performance shares granted in 2013 were based fifty percent (50%) on total shareholder return relative to a peer group of companies over the three-year period and fifty percent (50%) on debt reduction over the three-year period. These awards were earned at 78.6% of target, which resulted in a payout of 0.3 million shares in 2016. For these awards, the expense was based on the fair value of the company's shares as of the grant date for the debt reduction criteria and a Monte Carlo model for the total shareholder return criteria. A summary of activity for restricted stock units for the year ended December 31, 2015 is as follows (in millions except weighted average grant date fair value):
|  | Shares |  | Weighted Average Grant Date Fair Value
Unvested as of January 1, 2015 |  | 0.8 |  |  | $ | 27.09 |
Granted |  | 0.6 |  |  | 21.06 |
Vested* |  | (0.4 | ) |  | 20.77 |
Cancelled |  | (0.3 | ) |  | 27.64 |
Unvested as of December 31, 2015 |  | 0.7 |  |  | $ | 25.53 |
* Under the terms of the 2013 performance share award, the actual number of shares awarded could have ranged from zero to 0.8 million, depending on the company’s three-year performance as described above. Based on the performance criteria a total of 0.3 million shares was awarded in 2016. As of December 31, 2015, the company has $6.4 million of unrecognized compensation expense before tax related to restricted stock units which will be recognized over a weighted average period of 1.8 years.

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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=6418621&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=51659978&loc=d3e25284-112666 Reference 3: 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 4: 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 5: 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 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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