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, of which 702,305 shares are remaining. The LTIP is administered by the Compensation Committee of the Board of Directors. No SARs have been granted to date. The grant date fair value of each award is established at the fair market value of the Company’s common shares at the date of grant.

(i) Options

The Company has not granted any stock option awards since September 4, 2009. These stock option awards were fully amortized as at December 31, 2012, and the final options outstanding were exercised during the year ended December 31, 2017.

While outstanding, the Company’s options could be exercised for voting common shares upon vesting and had a term of ten years. The fair value of the option awards at the date of grant was determined using the Black-Scholes option-pricing model. Expected volatility was based on the 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.

Activity with respect to options for the year ended December 31, 2017 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	26,136		$	6.78	$	23.48
Options exercised	(26,136	)	6.78		23.48		$	748	$	614
Options outstanding, end of year	—		$	—	$	—

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


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

The aggregate intrinsic value of the options outstanding and exercisable at December 31, 2016 was $831.

(ii) Restricted share awards

Restricted shares granted under the LTIP vest either pro rata or 100% 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 $35,011 were recorded in connection with restricted share awards for the year ended December 31, 2017 (2016: $36,887; 2015: $35,386). 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, 2017, 2016 and 2015 was as follows:



	Years Ended December 31,
	2017				2016				2015
	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	2,469,982		$	40.89	2,739,446		$	38.25	2,858,711		$	35.81
Restricted share awards granted	511,561		53.22		564,345		48.83		724,357		43.67
Restricted share awards vested	(842,469	)	41.34		(796,716	)	37.40		(788,758	)	34.41
Restricted share awards forfeited	(58,677	)	43.77		(37,093	)	41.27		(54,864	)	38.14
Restricted share awards outstanding, end of year	2,080,397		$	43.66	2,469,982		$	40.89	2,739,446		$	38.25

At December 31, 2017, there were $48,907 (December 31, 2016: $58,804) 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, 2016: 2.3 years).

(iii) Restricted share units

Restricted share units under the LTIP vest either ratably or 100% 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 $1,319 were recorded in connection with restricted share units for the year ended December 31, 2017 (2016: $1,285; 2015: $1,160). 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, 2017, 2016 and 2015 was as follows:



	Years Ended December 31,
	2017				2016				2015
	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	112,808		$	40.95	114,337		$	38.47	103,484		$	36.54
Restricted share units granted	12,236		53.40		27,609		50.03		28,057		42.91
Restricted share units vested	(18,748	)	41.91		(23,982	)	38.18		(19,455	)	34.58
Restricted share units issued in lieu of cash dividends	3,098		41.63		3,182		39.36		3,143		37.53
Restricted share units forfeited	—		—		(8,338	)	44.34		(892	)	35.42
Restricted share units outstanding, end of year	109,394		$	42.20	112,808		$	40.95	114,337		$	38.47

At December 31, 2017, there were $1,909 (December 31, 2016: $2,542) of total unrecognized share compensation expenses in respect of restricted share units that are expected to be recognized over a weighted-average period of 2.4 years (December 31, 2016: 2.6 years).

(iv) Performance share awards

Performance share awards vest three years after the grant date, with the grant date fair value of each share awarded recognized evenly over this period. The number of performance shares initially granted is adjusted via “conversion adjustments” to reflect the compounded growth in the Dividend-Adjusted Book Value per Diluted Share over the three years. The cumulative compensation expense recognized and unrecognized as at any reporting period date represents the adjusted estimate of performance shares that will ultimately be awarded, valued at their original grant date fair values.

Share compensation expenses of $3,781 were recorded for the year ended December 31, 2017 (2016: $4,735; 2015: $1,795). The share compensation expenses represent the proportionate accrual of the fair value of each grant based on the remaining vesting period.

Activity with respect to unvested performance share awards for the years ended December 31, 2017, 2016 and 2015 was as follows:



	Years Ended December 31,
	2017				2016				2015
	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	285,820		$	44.53	172,594		$	40.70	106,369		$	36.03
Performance share awards granted	107,209		53.40		125,290		48.75		81,569		45.03
Performance share awards vested	(52,639	)	37.33		(57,581	)	36.11		(15,344	)	31.38
Performance share awards conversion adjustment	(26,322	)	36.82		45,517		36.82		—		—
Performance share awards outstanding, end of year	314,068		$	49.37	285,820		$	44.53	172,594		$	40.70

At December 31, 2017, there were $7,813 (December 31, 2016: $6,902) of total unrecognized share compensation expenses in respect of performance share awards that are expected to be recognized over a weighted-average period of 1.9 years (December 31, 2016: 2.1 years).


(b)	Total share compensation expenses

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



	Years Ended December 31,
	2017		2016		2015
Restricted share awards	$	35,011	$	36,887	$	35,386
Restricted share units	1,319		1,285		1,160
Performance share awards	3,781		4,735		1,795
Total	$	40,111	$	42,907	$	38,341

In addition, the Company recorded $(246) of associated tax (expense) for the year ended December 31, 2017 (2016: benefit of $1,869; 2015: benefit of $3,436). The Company also recognized $1,837 of net windfall taxes during the year ended December 31, 2017 (2016: $1,203; 2015: $906) in relation to share vestings and option exercises.