Stock-Based Compensation

The Company’s incentive compensation plans allow the Company to grant awards to employees in the form of stock options, stock awards, restricted stock units, stock appreciation rights, performance stock units, dividend equivalents and other awards. Compensation related to these awards is determined based on the grant-date fair value and is amortized to expense over the vesting period. The Company recognizes compensation expense based on the earlier of the vesting date or the date when the employee becomes eligible to retire without forfeiture of the award. If awards can be settled in cash, these awards are recorded as liabilities and marked to market.

The following table discloses the amount of stock-based compensation expense:



	Stock-Based Compensation
	2016		2015		2014
Stock options	$	506	$	3,986	$	4,218
Restricted stock units	5,595		4,879		2,206
Performance stock units	7,469		6,054		2,623
Total stock-based compensation	$	13,570	$	14,919	$	9,047

Stock Options

The 2001, 2006, 2010 and 2014 incentive compensation plans provide for granting options to key employees to purchase common shares at prices not less than market at the date of grant. Options under these plans may have terms of up to ten years becoming exercisable in whole or in consecutive installments, cumulative or otherwise. The plans allow the granting of nonqualified stock options which are not intended to qualify for the tax treatment applicable to incentive stock options under provisions of the Internal Revenue Code.

The Company’s 2002 nonqualified stock option plan provides for granting options to directors who are not current or former employees of the Company to purchase common shares at prices not less than market at the date of grant. Options granted under this plan have a term of ten years and become exercisable one year after the date of grant.

In February 2011, executives participating in the 2011 – 2013 Long-Term Incentive Plan were granted 311,670 stock options, which vested one-third each year through February 2014. In February 2012, executives participating in the 2012 – 2014 Long-Term Incentive Plan were granted 589,934 stock options which vested one-third each year through February 2015. In February 2013, executives participating in the 2013-2015 Long-Term Incentive Plan were granted 330,639 stock options, which vested one-third each year through February 2016. In February 2014, executives participating in the 2014-2016 Long-Term Incentive Plan were granted 380,064 stock options, which will vest one-third each year through February 2017. No stock options were granted in 2015 or 2016. These options do not contain any performance-based criteria. The Company recognizes compensation expense based on the earlier of the vesting date or the date when the employee becomes eligible to retire.

The fair value of these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:



	2014
Risk-free interest rate	2.0	%
Dividend yield	1.8	%
Expected volatility of the Company’s common stock	0.640
Expected life in years	6.0

The weighted average fair value of options granted in 2014 was $12.26. Compensation expense for these options is recorded over the vesting period.

Summarized information for the plans follows:



	Number of Shares		Weighted Average Exercise Price (per share)		Aggregate Intrinsic Value (thousands)
Outstanding at December 31, 2015	668,132		$	21.71
Granted	—		—
Exercised	(166,434	)	23.12
Expired	(1,596	)	12.53
Canceled	(4,398	)	24.65
Outstanding at December 31, 2016	495,704		21.24		$	8,730
Exercisable at December 31, 2016	381,477		20.43		7,029



	Year ended December 31,
	2016		2015		2014
Weighted average grant-date fair value of options granted (per share)	$	—	$	—	$	12.26
Aggregate intrinsic value of options exercised (thousands)	$	2,640	$	20,100	$	2,711
Weighted average grant-date fair value of shares vested (thousands)	2,633		$	4,602	$	3,905

The weighted average remaining contractual life of options outstanding at December 31, 2016 is 5.7 years. Approximately 114,227 stock options will become exercisable over the next twelve months.

Segregated disclosure of options outstanding at December 31, 2016 was as follows:



	Range of Exercise Prices
	Less than or equal to $15.63		Greater than $15.63
Options outstanding	113,374		382,330
Weighted average exercise price	$	12.86	$	23.72
Remaining contractual life	5.4		7.1
Options exercisable	113,374		268,103
Weighted average exercise price	$	12.86	$	23.62

At December 31, 2016, the Company had $14 of unvested compensation cost related to stock options, and this cost will be recognized as expense over a weighted average period of two months.

Restricted Stock Units

Under the 2001, 2006, 2010 and 2014 Incentive Compensation Plans, restricted stock units may be granted to officers and certain other employees as awards for exceptional performance, as a hiring or retention incentive or as part of the Long-Term Incentive Plan. The restricted stock units granted in 2014, 2015 and 2016 have vesting periods of three years. In February 2015, employees participating in the 2015-2017 Long-Term Incentive Plan were granted 105,102 restricted stock units which vest one-third each year through February 2018. In February 2016, employees participating in the 2016-2018 Long-Term Incentive Plan were granted 106,287 restricted stock units which vest one-third each year through February 2019. Compensation expense related to the restricted stock units granted is determined based on the fair value of the Company’s stock on the date of grant. The Company recognizes compensation expense based on the earlier of the vesting date or the date when the employee becomes eligible to retire. Employees must remain employed for at least six months to vest in the restricted stock units, even if retirement eligible.

The following table provides details of the nonvested restricted stock units for 2016:



	Number of Restricted Units		Weighted Average Grant-Date Fair Value (per share)
Nonvested at December 31, 2015	197,388		$	33.50
Granted	143,169		36.02
Vested	(99,697	)	32.05
Canceled	(3,409	)	34.46
Accrued dividend equivalents	3,123		35.09
Nonvested at December 31, 2016	240,574		$	35.75



	Year ended December 31,
	2016		2015		2014
Weighted average grant-date fair value of restricted shares granted (per share)	$	36.02	$	36.35	$	27.53
Weighted average grant-date fair value of shares vested (thousands)	$	3,195	$	2,629	$	1,185

The number of vested restricted stock units at December 31, 2016 and 2015 was 93,440 and 93,017, respectively. At December 31, 2016, the Company has $1,904 of unvested compensation cost related to restricted stock units and this cost will be recognized as expense over a weighted average period of 26 months.

Performance Stock Units

Compensation related to the performance stock units is determined based on the fair value of the Company’s stock on the date of grant combined with performance metrics. During 2012, executives participating in the Company’s Long-Term Incentive Plan earned 309,890 performance stock units based on the Company’s financial performance in 2012. Of these units, 91,190 vested in 2012, 86,170 vested in 2013 and 131,488 vested in 2014. During 2013, executives participating in the Company’s Long-Term Incentive Plan earned 33,405 performance stock units based on the Company’s financial performance in 2013. Of these units, 9,821 vested in 2013, 13,373 vested in 2014 and 8,701 vested in 2015. During 2014, executives participating in the Company’s Long-Term Incentive Plan earned 123,788 performance stock units based on the Company’s financial performance in 2014. Of these units, 49,248 vested in 2014, 32,074 vested in 2015 and 38,091 vested in 2016. During 2015, executives participating in the Company’s Long-Term Incentive Plan earned 231,543 performance stock units based on the Company’s financial performance in 2015. Of these units, 69,912 vested in 2015, 83,371 vested in 2016 and 67,705 will vest in 2017. During 2016, executives participating in the Company’s Long-Term Incentive Plan earned 179,865 performance stock units based on the Company’s financial performance in 2016. Of these units, 55,570 vested in 2016, and 46,139 and 49,252 will vest in 2017 and 2018, respectively. The Company recognizes compensation expense based on the earlier of the vesting date or the date when the employee becomes eligible to retire.

The following table provides details of the nonvested performance stock units earned under the Company’s Long-Term Incentive Plan:



	Number of Performance Units		Weighted Average Grant- Date Fair Value (per share)
Nonvested at December 31, 2015	191,536		$	34.18
Earned	179,865		36.76
Vested	(179,093	)	33.97
Canceled	(30,786	)	36.65
Accrued dividend equivalents	2,445		34.02
Nonvested at December 31, 2016	163,967		$	36.77

The weighted average fair value of performance stock units granted in 2016, 2015 and 2014 was $36.76, $36.62 and $23.96, respectively.

At December 31, 2016, the Company had $1,007 of unvested compensation cost related to performance stock units and this cost will be recognized as expense over a weighted average period of 17 months.

The Company’s nonvested restricted stock units and performance stock units are not participating securities. These units will be converted into shares of Company common stock in accordance with the distribution date indicated in the agreements. Restricted stock units earn dividend equivalents from the time of the award until distribution is made in common shares. Performance stock units earn dividend equivalents from the time the units have been earned based upon Company performance metrics until distribution is made in common shares. Dividend equivalents are only earned subject to vesting of the underlying restricted stock units or performance stock units. Accordingly, such units do not represent participating securities.

At December 31, 2016, the company had 2,303,428 shares available for future issuance under equity compensation plans.

The Company recognized $274, $4,323 and $1,268 of excess tax benefits on stock based compensation transactions as a financing cash inflow for the years ended December 31, 2016, 2015 and 2014, respectively.