Stock Plans

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Under various stock plans, officers, employees, and outside directors have received or may receive grants of restricted stock, stock units, stock appreciation rights or options to purchase common stock. Grants have been made at the discretion of the Committees of the Board of Directors. Grants generally vest either on a straight-line basis over four years or on a cliff basis over three years. Shares offered under the plan are authorized but unissued shares.

Recipients of restricted stock do not pay any cash consideration to the Company for the shares and have the right to vote all shares subject to such grant. Restricted stock grants contain forfeitable rights to dividends. Dividends for these grants are accrued on the dividend payment dates but are not paid until the shares vest, and dividends accrued for shares that ultimately do not vest are forfeited. Recipients of stock units do not pay any cash consideration for the units, do not have the right to vote, and do not receive dividends with respect to such units.

During the year ended December 31, 2019, the Company granted performance shares to its executives in the form of restricted stock. The shares granted contain (1) a performance condition based on Return on Invested Capital (“ROIC”), and (2) a market condition based on Total Shareholder Return (“TSR”). The ROIC performance condition and the TSR market condition measure the Company’s performance against a peer group. Shares will be delivered at the end of a three year vesting, TSR and ROIC performance period based on the Company’s actual performance compared to the peer group. The ROIC performance condition is calculated first and has a range of possible outcomes of zero percent (0%) to one hundred fifty percent (150%). The TSR condition is considered a modifier of the ROIC performance condition. The range for the TSR condition is seventy-five percent (75%) to one hundred twenty-five percent (125%). The result calculated by multiplying the ROIC percentage by the TSR percentage is used to calculate the actual number of shares earned. The fair value of this award was determined using a Monte Carlo simulation with the following assumptions: a historical volatility of 26.20%, a 0% dividend yield, and a risk-free interest rate of 2.36%. The historical volatility was based on the most recent 2.71-year period for the

Company and the components of the peer group. The stock price movements have been modeled such that the dividends are incorporated in the returns of each company’s stock, therefore the Monte Carlo simulation reflects a 0% dividend yield for each stock. The use of a 0% dividend yield is mathematically equivalent to including the dividends in the calculation of TSR. The risk-free interest rate is equal to the yield, as of the valuation date, of the zero-coupon U.S. Treasury bill that is commensurate with the remaining performance period.

Unrecognized compensation cost is expected to be recognized over the next four years. Total unrecognized compensation cost, net of estimated forfeitures, for restricted stock and stock units was $71.6 million, $65.6 million, and $62.7 million for the years ended December 31, 2019, 2018 and 2017, respectively.

The following table reflects activity under all stock plans from December 31, 2016 through December 31, 2019, and the weighted average exercise prices (in thousands, except per share amounts):



	Time Based Awards			Performance Based Awards with Market Conditions				Performance Based Awards without Market Conditions			Total Awards with Performance Condition
	Number of Shares/ Units	Weighted Average Grant Date Fair Value	Number of Shares/ Units		Weighted Average Grant Date Fair Value	Number of Shares/ Units	Weighted Average Grant Date Fair Value		Number of Shares/ Units	Weighted Average Grant Date Fair Value
Outstanding, December 31, 2016	1,243	$43.78	950		$54.42	—	—		950	$54.42
Granted	574	$48.10	50		$50.09	330	$47.45		380	$47.80

Restrictions lapsed	(616)	$44.09	(384)		$50.09	—	—		(384)	$50.09
Forfeited	(41)	$43.68	—		—	—	—		—	—
Outstanding, December 31, 2017	1,160	$45.75	616		$56.76	330	$47.45		946	$53.51
Granted	533	$57.16	—		—	278	$56.83		278	$56.83

Restrictions lapsed	(568)	$47.62	(129)		$71.86	—	—		(129)	$71.86
Forfeited	(40)	$49.10	(129)		$71.86	—	—		(129)	$71.86
Outstanding, December 31, 2018	1,085	$50.24	358		$45.93	608	$51.74		966	$49.58
Granted	434	$66.66	236		$74.01	—	—		236	$74.01

Restrictions lapsed	(557)	$50.29	(338)		$45.93	—	—		(338)	$45.93
Forfeited	(15)	$53.85	(20)		$45.93	—	—		(20)	$45.93
Outstanding, December 31, 2019	947	$57.67	236		$74.01	608	$51.74		844	$57.97

The total fair value of shares vested was $57.0 million, $40.6 million, and $50.4 million for the years ended December 31, 2019, 2018 and 2017, respectively.

At December 31, 2019, the total number of available shares to grant under the plans (consisting of either restricted stock, stock units, stock appreciation rights or options to purchase common stock) was approximately 4.8 million.