NOTE 9. EQUITY-BASED COMPENSATION

As of June 30, 2017, we had two stock incentive plans under which performance shares, restricted stock units (RSUs) and deferred compensation stock equivalent units were outstanding. These plans have received shareholder approval. We were originally authorized to issue up to 1.6 million shares and 1.0 million shares under our 2005 Stock Incentive Plan and 2014 Stock Incentive Plan, respectively. At June 30, 2017, approximately 1.0 million shares were authorized for future use. We issue new shares of common stock to settle performance shares, restricted stock units and deferred compensation stock equivalent units.

The following table details equity-based compensation expense and the related income tax benefit:

	Three Months Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)	2017		2016		2017		2016
Employee equity-based compensation expense:
Performance shares	$	905	$	951	$	1,773	$	1,705
Restricted stock units		286		271		575		471
Total employee equity-based compensation expense	$	1,191	$	1,222	$	2,348	$	2,176

Deferred compensation stock equivalent units expense	$	161	$	220	$	322	$	420

Total tax benefit recognized for share-based expense	$	96	$	89	$	189	$	155

PERFORMANCE SHARES

The following table presents the key inputs used in the Monte Carlo simulation to calculate the fair value of the performance share awards in 2017 and 2016:

	Six Months Ended June 30,
	2017			2016
Stock price as of valuation date	$	43.60		$	25.92
Risk-free rate		1.61	%		0.88	%
Expected volatility		24.22	%		23.82	%
Expected dividends		3.44	%		5.79	%
Expected term (years)		3.00			3.00
Fair value	$	53.85		$	30.02

The following table summarizes outstanding performance share awards as of June 30, 2017, and changes during the six months ended June 30, 2017:

(Dollars in thousands, except grant date fair value)	Shares			Weighted-Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at January 1		203,788		$	32.59
Granted		78,033		$	53.85
Forfeited		(2,187	)	$	39.15
Unvested shares outstanding at June 30		279,634		$	38.47	$	12,779

As of June 30, 2017, there was $5.8 million of unrecognized compensation cost related to unvested performance share awards, which is expected to be recognized over a weighted-average period of 1.5 years.

RESTRICTED STOCK UNITS

The following table summarizes outstanding RSU awards as of June 30, 2017, and changes during the six months ended June 30, 2017:

(Dollars in thousands, except grant date fair value)	Shares			Weighted-Avg. Grant Date Fair Value		Aggregate Intrinsic Value
Unvested shares outstanding at January 1		71,420		$	31.61
Granted		26,507		$	43.64
Vested		(2,000	)	$	32.85
Forfeited		(728	)	$	32.70
Unvested shares outstanding at June 30		95,199		$	34.93	$	4,351

The fair value of each RSU equaled our common share price on the date of grant. The total fair value of RSU awards that vested during the six months ended June 30, 2017 was de minimis. As of June 30, 2017, there was $1.6 million of total unrecognized compensation cost related to unvested RSU awards, which is expected to be recognized over a weighted-average period of 1.4 years.

DEFERRED COMPENSATION STOCK EQUIVALENT UNITS

A long-term incentive award is granted annually to our directors and payable upon a director's separation from service. Directors may also elect to defer their quarterly retainers, which may be payable in the form of stock. All stock unit equivalent accounts are credited with dividend equivalents. As of June 30, 2017, there were 136,226 shares outstanding that will be distributed in the future to directors as common stock.

Issuance of restricted stock units awarded to certain officers and select employees may also be deferred. All stock unit equivalent accounts are credited with dividend equivalents. As of June 30, 2017, there were 72,942 RSUs which had vested, but issuance of the related stock had been deferred.