8. Stock option and award plan:

Incentive award plan

The Company grants restricted stock and options for common stock under its award plan, the 2004 Incentive Award Plan, as amended (the "Award Plan"). Stock options granted under the Award Plan generally vest over a four-year period and have a term of ten years. Grants of shares of restricted stock granted under the Award Plan generally vest over periods ranging from three to four years. Compensation expense for all awards is recognized over the service period. Awards with graded vesting terms that are subject only to service conditions are recognized on a straight-line basis. Certain option and share grants provide for accelerated vesting if there is a change in control, as defined. For grants of restricted stock, when an employee terminates prior to full vesting the employee retains their vested shares and the employees' unvested shares are returned to the plan. For grants of options for common stock, when an employee terminates prior to full vesting, the employee may elect to exercise their vested options for a period of ninety days and any unvested options are returned to the plan. Shares issued to satisfy awards are provided from the Company's authorized shares. In May 2016 the Company granted 73,450 restricted shares under the Award Plan with a grant date fair value of $2.9 million that are subject to certain performance conditions and cliff vesting based upon the Company's operating metrics and will be recognized as equity-based compensation expense on a straight line basis over the service period.

The accounting for equity-based compensation expense requires the Company to make estimates and judgments that affect its financial statements. These estimates include the following.

Expected Dividend Yield—The Company uses an expected dividend yield based upon expected annual dividends and the Company's stock price.

Expected Volatility—The Company uses its historical volatility for a period commensurate with the expected term of the option.

Risk-Free Interest Rate—The Company uses the zero coupon US Treasury rate during the quarter having a term that most closely resembles the expected term of the option.

Expected Term of the Option—The Company estimates the expected life of the option term by analyzing historical stock option exercises.

Forfeiture Rates—The Company estimates its forfeiture rate based on historical data with further consideration given to the class of employees to whom the options or shares were granted.

The weighted-average per share grant date fair value of options was $6.23 in 2016, $6.29 in 2015 and $8.32 in 2014. The following assumptions were used for determining the fair value of options granted in the three years ended December 31, 2016:

	Years Ended December 31,
Black-Scholes Assumptions	2016			2015			2014
Dividend yield		3.7	%		3.8	%		3.6	%
Expected volatility		30.8	%		32.5	%		37.0	%
Risk-free interest rate		1.4	%		1.5	%		1.6	%
Expected life of the option term (in years)		4.6			4.6			4.6

Stock option activity under the Company's Award Plan during the year ended December 31, 2016, was as follows:

	Number of Options			Weighted-Average Exercise Price
Outstanding at December 31, 2015		201,587		$	28.42
Granted		72,752		$	37.54
Cancelled and expired		(37,772	)	$	34.66
Exercised—intrinsic value $0.9 million; cash received $1.2 million		(53,245	)	$	22.92

Outstanding at December 31, 2016—$1.7 million intrinsic value and 7.4 years weighted-average remaining contractual term		183,322		$	32.35

Exercisable at December 31, 2016—$1.2 million intrinsic value and 6.2 years weighted-average remaining contractual term		103,898		$	29.61

Expected to vest—$1.5 million intrinsic value and 7.1 years weighted-average remaining contractual term		162,235		$	31.85

A summary of the Company's non-vested restricted stock awards as of December 31, 2016 and the changes during the year ended December 31, 2016 are as follows:

Non-vested awards	Shares			Weighted-Average Grant Date Fair Value
Non-vested at December 31, 2015		870,751		$	32.25
Granted		358,130		$	38.87
Vested		(316,296	)	$	29.07
Forfeited		(3,824	)	$	37.27

Non-vested at December 31, 2016		908,761		$	35.94

The weighted average per share grant date fair value of restricted stock granted was $38.87 in 2016 (0.4 million shares) $33.19 in 2015 (0.1 million shares) and $34.57 in 2014 (0.8 million shares). The fair value was determined using the quoted market price of the Company's common stock on the date of grant. The fair value of shares of restricted stock vested in 2016, 2015 and 2014 was $12.0 million $14.3 million and $19.0 million, respectively.

Equity-based compensation expense related to stock options and restricted stock was $10.7 million, $11.5 million, and $9.6 million for 2016, 2015, and 2014, respectively. The income tax benefit related to stock options and restricted stock was $2.8 million, $1.8 million, and $2.1 million for 2016, 2015, and 2014, respectively. The Company capitalized compensation expense related to stock options and restricted stock for 2016, 2015, and 2014 of $1.2 million, $1.0 million and $0.8 million, respectively. As of December 31, 2016, there was $21.6 million of total unrecognized compensation cost related to non-vested equity-based compensation awards. That cost is expected to be recognized over a weighted average period of 2.3 years.