Stock plans


(a)	Long Term Incentive Plan

The Company’s Amended and Restated 2005 Long Term Incentive Plan (“LTIP”) provides for grants to employees of options, stock appreciation rights (“SARs”), restricted shares, restricted share units, performance shares, dividend equivalents or other share-based awards. The total number of shares reserved for issuance under the LTIP are 2,753,292 shares of which 1,251,411 shares are remaining. The LTIP is administered by the Compensation Committee of the Board of Directors. No SARs have been granted to date. Grant prices are established at the fair market value of the Company’s common shares at the date of grant.

(i) Options

Options may be exercised for voting common shares upon vesting. Options have a life of 10 years and vest either pro rata or at the end of the required service period from the date of grant. Fair value of the option awards at the date of grant is determined using the Black-Scholes option-pricing model.

Expected volatility is based on stock price volatility of comparable publicly-traded companies. The Company used the simplified method consistent with U.S. GAAP authoritative guidance on stock compensation expenses to estimate expected lives for options granted during the period as historical exercise data was not available and the options met the requirement as set out in the guidance.

The Company has not granted any stock option awards since September 4, 2009. These stock option awards were fully amortized during the year ended December 31, 2012.

Activity with respect to options for the year ended December 31, 2016 was as follows:



	Options		Weighted Average Grant Date Fair Value		Weighted Average Grant Date Exercise Price		Total Intrinsic Value ^(a)		Company Proceeds Received
Options outstanding, beginning of year	65,401		$	7.74	$	20.17
Options exercised	(39,265	)	8.37		17.96		$	1,260	$	277
Options outstanding, end of year	26,136		$	6.78	$	23.48

Activity with respect to options for the year ended December 31, 2015 was as follows:



	Options		Weighted Average Grant Date Fair Value		Weighted Average Grant Date Exercise Price		Total Intrinsic Value ^(a)		Company Proceeds Received
Options outstanding, beginning of year	1,160,057		$	7.12	$	17.74
Options exercised	(1,094,656	)	7.09		17.60		$	26,367	$	6,277
Options outstanding, end of year	65,401		$	7.74	$	20.17

Activity with respect to options for the year ended December 31, 2014 was as follows:



	Options		Weighted Average Grant Date Fair Value		Weighted Average Grant Date Exercise Price		Total Intrinsic Value^(a)		Company Proceeds Received
Options outstanding, beginning of year	1,572,713		$	6.66	$	18.88
Options exercised	(412,656	)	5.36		22.07		$	7,459	$	9,107
Options outstanding, end of year	1,160,057		$	7.12	$	17.74


(a)	The total intrinsic value in the tables above represent the amount by which the market price of the Company’s common stock is greater than the option strike price multiplied by the number of options exercised during the year.

There have been no unamortized share compensation expenses in respect of options since the year ended December 31, 2012. The aggregate intrinsic value of the options outstanding and exercisable at December 31, 2016 was $831 (December 31, 2015: $1,740).

(ii) Restricted share awards

Restricted shares granted under the LTIP vest either pro rata or at the end of the required service period and contain certain restrictions during the vesting period, relating to, among other things, forfeiture in the event of termination of employment and transferability. Share compensation expenses of $36,887 were recorded for the year ended December 31, 2016 (2015: $35,386; 2014: $31,335). The expenses represent the proportionate accrual of the fair value of each grant based on the remaining vesting period.

Activity with respect to unvested restricted share awards for the years ended December 31, 2016, 2015 and 2014 was as follows:



	Years Ended December 31,
	2016				2015				2014
	Restricted Share Awards		Weighted Average Grant Date Fair Value		Restricted Share Awards		Weighted Average Grant Date Fair Value		Restricted Share Awards		Weighted Average Grant Date Fair Value
Restricted share awards outstanding, beginning of year	2,739,446		$	38.25	2,858,711		$	35.81	2,684,745		$	33.74
Restricted share awards granted	564,345		48.83		724,357		43.67		1,051,348		37.81
Restricted share awards vested	(796,716	)	37.40		(788,758	)	34.41		(797,446	)	31.44
Restricted share awards forfeited	(37,093	)	41.27		(54,864	)	38.14		(79,936	)	36.09
Restricted share awards outstanding, end of year	2,469,982		$	40.89	2,739,446		$	38.25	2,858,711		$	35.81

At December 31, 2016, there were $58,804 (December 31, 2015: $69,143) of total unrecognized share compensation expenses in respect of restricted share awards that are expected to be recognized over a weighted-average period of 2.3 years (December 31, 2015: 2.4 years).

(iii) Restricted share units

Restricted share units under the LTIP vest either ratably or at the end of the required service period and contain certain restrictions during the vesting period, relating to, among other things, forfeiture in the event of termination of employment and transferability. Share compensation expenses of $1,285 were recorded for the year ended December 31, 2016 (2015: $1,160; 2014: $876). The expenses represent the proportionate accrual of the fair value of each grant based on the remaining vesting period.

Activity with respect to unvested restricted share units for the years ended December 31, 2016, 2015 and 2014 was as follows:



	Years Ended December 31,
	2016				2015				2014
	Restricted Share Units		Weighted Average Grant Date Fair Value		Restricted Share Units		Weighted Average Grant Date Fair Value		Restricted Share Units		Weighted Average Grant Date Fair Value
Restricted share units outstanding, beginning of year	114,337		$	38.47	103,484		$	36.54	66,518		$	33.74
Restricted share units granted	27,609		50.03		28,057		42.91		53,025		38.10
Restricted share units vested	(23,982	)	38.18		(19,455	)	34.58		(18,325	)	30.71
Restricted share units issued in lieu of cash dividends	3,182		39.36		3,143		37.53		2,266		35.00
Restricted share units forfeited	(8,338	)	44.34		(892	)	35.42		—		—
Restricted share units outstanding, end of year	112,808		$	40.95	114,337		$	38.47	103,484		$	36.54

At December 31, 2016, there were $2,542 (December 31, 2015: $2,790) of total unrecognized share compensation expenses in respect of restricted share units that are expected to be recognized over a weighted-average period of 2.6 years (December 31, 2015: 2.6 years).

(iv) Performance share awards

The performance share awards contain a performance based component. The performance component relates to the compounded growth in the Dividend Adjusted Book Value per Diluted Share (“DBVPS”) over a three year period. For performance share awards granted during the period, the grant date is based on the DBVPS at the end of the most recent financial reporting year. The performance period end DBVPS will be the DBVPS three years after the grant date DBVPS. The fair value estimate earns over the requisite attribution period and the estimate will be reassessed at the end of each performance period which will reflect any adjustments in the consolidated statements of comprehensive income in the period in which they are determined.

Share compensation expenses of $4,735 were recorded for the year ended December 31, 2016 (2015: $1,795; 2014: $862). The share compensation expenses represent the proportionate accrual of the fair value of each grant based on the remaining vesting period. The negative expense is due to a reversal of expenses on unvested performance share awards based on a review of current and projected performance criteria.

Activity with respect to unvested performance share awards for the years ended December 31, 2016, 2015, and 2014 was as follows:



	Years Ended December 31,
	2016				2015				2014
	Performance Share Awards		Weighted Average Grant Date Fair Value		Performance Share Awards		Weighted Average Grant Date Fair Value		Performance Share Awards		Weighted Average Grant Date Fair Value
Performance share awards outstanding, beginning of year	172,594		$	40.70	106,369		$	36.03	101,820		$	33.56
Performance share awards granted	125,290		48.75		81,569		45.03		52,639		37.33
Performance share awards vested	(57,581	)	36.11		(15,344	)	31.38		(32,746	)	32.62
Performance share awards conversion adjustment	45,517		36.82		—		—		(15,344	)	31.38
Performance share awards outstanding, end of year	285,820		$	44.53	172,594		$	40.70	106,369		$	36.03

At December 31, 2016, there were $6,902 (December 31, 2015: $4,011) of total unrecognized share compensation expenses in respect of performance share awards that are expected to be recognized over a weighted-average period of 2.1 years (December 31, 2015: 2.1 years).


(b)	Total share compensation expenses

The breakdown of share compensation expenses by award type is as follows:



	Years Ended December 31,
	2016		2015		2014
Restricted share awards	$	36,887	$	35,386	$	31,335
Restricted share units	1,285		1,160		876
Performance share awards	4,735		1,795		862
Total	$	42,907	$	38,341	$	33,073

In addition, the Company recorded $1,869 of associated tax benefits for the year ended December 31, 2016 (2015: $3,436; 2014: $1,610). The Company also recognized $1,203 of net windfall taxes during the year ended December 31, 2016 (2015: $906; 2014: $3,513) in relation to share vestings and option exercises.