Shared-Based Compensation

The Corporation maintains share-based compensation plans under which it periodically grants share-based awards for a fixed number of shares to certain officers of the Corporation. The fair value of share-based awards is recognized as compensation expense over the requisite service or performance period. During the years ended December 31, 2016, 2015 and 2014, share-based compensation expense related to share-based awards totaled $14.7 million, $3.7 million and $2.9 million, respectively. The excess tax benefit realized from shared-based compensation transactions during the years ended December 31, 2016, 2015 and 2014 was $2.2 million, $0.5 million and $0.2 million, respectively.

During the year ended December 31, 2016, the Corporation granted options to purchase 441,167 shares of common stock, 165,876 restricted stock units and 6,381 shares of common stock to certain officers of the Corporation. In addition, the Corporation assumed options to purchase 1,466,408 shares of common stock and 484,892 restricted stock awards in connection with the Talmer merger.

On April 20, 2015, the shareholders of the Corporation approved the Stock Incentive Plan of 2015, which provides for 1,300,000 shares of the Corporation's common stock to be made available for future equity-based awards and canceled the amount of shares available for future grant under prior share-based compensation plans. At December 31, 2016, there were 626,353 shares of common stock available for future grants under the Stock Incentive Plan of 2015.

Stock Options

The Corporation issues stock options to certain officers from time to time. The exercise price on stock options equals the current market price of the Corporation's common stock on the date of grant and stock options expire ten years from the date of grant. Stock options granted after 2012 vest ratably over a five-year period. Stock options granted prior to 2013 generally vest ratably over a three-year period. Stock options granted prior to 2016 fully vested upon completion of the merger with Talmer. Stock options assumed by the Corporation in the merger with Talmer were fully vested prior to assumption.

The following summarizes information about stock options outstanding and exercisable at December 31, 2016:



	Options outstanding				Options exercisable
Range of exercise prices per share	Number outstanding	Weighted average exercise price per share		Weighted average contractual term (in years)	Number exercisable	Weighted average exercise price per share		Weighted average contractual term (in years)
$10.56 - 12.80	289,512	$	11.83	3.50	289,512	$	11.83	3.50
$13.20 - 16.24	1,044,881	16.20		5.99	1,044,881	16.20		5.99
$19.97 - 21.10	62,422	20.49		3.39	62,422	20.49		3.39
$28.43 - 32.81	703,378	31.58		8.58	295,439	29.88		7.76
$23.78 - 25.14	353,202	24.60		4.49	353,202	24.60		4.49
$10.56 - 32.81	2,453,395	$	21.41	6.16	2,045,456	$	19.14	5.56

The intrinsic value of all outstanding in-the-money stock options and exercisable in-the-money stock options was $80.4 million and $71.7 million, respectively, at December 31, 2016. The aggregate intrinsic values of outstanding and exercisable options at December 31, 2016 were calculated based on the closing market price of the Corporation's common stock on December 31, 2016 of $54.17 per share less the exercise price. Options with intrinsic values less than zero, or "out-of-the-money" options, are not included in the aggregate intrinsic value reported. The total intrinsic value of stock options for the years ended December 31, 2015 and 2014 was $7.6 million and $5.1 million, respectively.

Total cash received from option exercises during the years ended December 31, 2016, 2015 and 2014 was $2.7 million, $2.3 million and $1.0 million, respectively, resulting in the issuance of 229 thousand shares, 135 thousand shares and 45 thousand shares, respectively.

At December 31, 2016, unrecognized compensation expense related to stock options totaled $2.1 million and is expected to be recognized over a remaining weighted average period of 4.2 years. Stock options granted prior to 2016 contain change-of-control provisions that triggered full vesting upon completion of the merger with Talmer. As a result, unrecognized compensation expense related to these stock options was recognized by the Corporation during the year ended December 31, 2016.

A summary of activity for the Corporation's stock options as of and during the years ended December 31, 2016, 2015 and 2014 is presented below:



	Non-vested stock options outstanding						Stock options outstanding
	Number of options		Weighted- average exercise price per share		Weighted- average grant date fair value per share		Number of options		Weighted- average exercise price per share
Outstanding at December 31, 2013	414,080		$	24.29	$	7.19	1,073,990		$	26.84
Granted	190,011		29.45		9.64		190,011		29.45
Exercised	—		—		—		(72,936	)	24.67
Vested	(148,016	)	23.43		6.98		—		—
Expired or forfeited	(23,876	)	25.67		7.79		(153,754	)	37.50
Outstanding at December 31, 2014	432,199		26.75		8.30		1,037,311		25.90
Granted	244,165		30.18		8.40		244,165		30.18
Acquired	—		—		—		132,883		12.93
Exercised	—		—		—		(310,985	)	25.10
Vested	(150,224	)	25.57		7.80		—		—
Expired or forfeited	(46,385	)	27.99		8.50		(48,635	)	28.18
Outstanding at December 31, 2015	479,755		$	28.75	$	8.49	1,054,739		$	25.38
Acquired	—		—		—		1,466,408		15.08
Granted	441,167		32.81		6.15		441,167		32.81
Exercised	—		—		—		(450,296	)	20.02
Vested	(454,360	)	28.74		8.49		—		—
Forfeited/expired	(58,623	)	31.10		7.17		(58,623	)	31.10
Outstanding at December 31, 2016	407,939		$	32.81	$	6.15	2,453,395		$	21.41
Exercisable/vested at December 31, 2016							2,045,456		$	19.14

The fair value of the stock options granted during the years ended December 31, 2016, 2015 and 2014 were estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions.



	2016		2015		2014
Expected dividend yield	3.30	%	3.50	%	3.00	%
Risk-free interest rate	1.39	%	1.78	%	2.16	%
Expected stock price volatility	27.9	%	39.1	%	42.2	%
Expected life of options — in years	6.5		7.0		7.0
Weighted average fair value of options granted	$6.15		$8.40		$9.64

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant and the expected life of the options granted. Expected stock volatility was based on historical volatility of the Corporation's common stock over a the expected life of the option. The expected life of options represents the period of time that options granted are expected to be outstanding and is based primarily upon historical experience, including option exercise behavior.

Because of the unpredictability of the assumptions required, the Black-Scholes (or any other valuation) model is incapable of accurately predicting the Corporation's common stock price or of placing an accurate present value on options to purchase its stock. In addition, the Black-Scholes model was designed to approximate value for types of options that are very different from those issued by the Corporation. In spite of any theoretical value that may be placed on a stock option grant, no value is possible under options issued by the Corporation without an increase in the market price per share of the Corporation's common stock over the market price per share of the Corporation's common stock at the date of grant.

Restricted Stock Units

The Corporation grants restricted stock performance units and restricted stock service-based units (collectively referred to as restricted stock units) to certain officers from time to time. The restricted stock performance units vest based on the Corporation achieving certain performance target levels and the grantee completing the requisite service period. The restricted stock performance units are eligible to vest from 0.5x to 1.5x the number of units originally granted depending on which, if any, of the performance target levels are met. However, if the minimum performance target levels are not achieved, no shares will become vested or be issued for that respective year's restricted stock performance units. The restricted stock service-based units vest upon satisfaction of a service condition. Upon achievement of the performance target level and/or satisfaction of a service condition, as applicable, the restricted stock units are converted into shares of the Corporation's common stock on a one-to-one basis. Compensation expense related to restricted stock units is recognized over the expected requisite performance or service period, as applicable.

A summary of the activity for restricted stock units during the year ended December 31, 2016 is presented below:



	Number of units		Weighted-average grant date fair value per unit
Outstanding at December 31, 2015	207,989		$	26.41
Granted	165,876		37.41
Converted into shares of common stock	(67,331	)	24.54
Forfeited/expired	(8,177	)	31.19
Outstanding at December 31, 2016	298,357		$	32.81

At December 31, 2016, unrecognized compensation expense related to restricted stock units totaled $4.7 million and is expected to be recognized over a remaining weighted average period of 2.4 years. Certain restricted stock units granted prior to 2016 fully vested upon completion of the merger with Talmer. In addition, in consideration for the award of additional restricted stock units that the holder and the Corporation agreed was a material benefit to which the holder was not otherwise entitled, certain holders of restricted stock units agreed with the Corporation to amend the terms of their restricted stock units such that vesting did not occur upon completion of the merger with Talmer and remained subject to existing performance-based or time-based vesting schedules. As a result, unrecognized compensation expense related to the elected restricted stock units was recognized by the Corporation during the year ended December 31, 2016.

Restricted Stock Awards

The Corporation assumed restricted stock awards in the merger with Talmer that vest upon completion of future service requirements . The fair value of these awards is equal to the market price of the Corporation's common stock at the date the awards were assumed with the portion of the fair value related to post-combination service. The Corporation recognizes stock-based compensation expense over the vesting period, using the straight-lined method, based upon the number of shares of restricted stock ultimately expected to vest. If an individual awarded restricted stock awards terminates employment prior to the end of the vesting period, the unvested portion of the stock is forfeited, with certain exceptions.

The following table provides information regarding nonvested restricted stock awards:



Nonvested restricted stock awards	Number of awards		Weighted-average acquisition-date fair value
Nonvested at January 1, 2016	—		$	—
Acquired	484,892		46.23
Vested	(118,493	)	46.23
Forfeited	(508	)	46.23
Nonvested at December 31, 2016	365,891		$	46.23

At December 31, 2016, unrecognized compensation expense related to nonvested restricted stock awards totaled $9.0 million and is expected to be recognized over a remaining weighted average period of 1.4 years.