(8)	STOCK AWARD PLANS

The Company has share-based compensation plans which are described below. The compensation cost that has been charged against earnings for the Company’s stock award plans and the income tax benefit recognized in the statement of earnings for stock awards for the three months and six months ended June 30, 2018 and 2017 were as follows (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2018		2017		2018		2017
Compensation cost	$	6,000	$	3,231	$	13,551	$	5,924
Income tax benefit	$	2,278	$	1,271	$	4,038	$	2,152

The Company has an employee stock award plan for selected officers and other key employees which provides for the issuance of stock options, restricted stock awards and performance awards. On February 19, 2018, the employee stock award plan was amended to also allow for the granting of restricted stock units (“RSUs”) to selected officers and other key employees. The amendment included a provision for the continued vesting of unvested stock options and RSUs for employees who meet certain years of service and age requirements at the time of their retirement. The vesting change resulted in shorter expense accrual periods on stock options and RSUs granted after February 19, 2018 to employees who are nearing retirement and meet the service and age requirements.

The exercise price for each option equals the fair market value per share of the Company’s common stock on the date of grant. Substantially all stock options outstanding under the plan have terms of seven years and vest ratably over three years. No performance awards payable in stock have been awarded under the plan. At June 30, 2018, 1,571,749 shares were available for future grants under the employee plan and no outstanding stock options under the employee plan were issued with stock appreciation rights.

The following is a summary of the stock option activity under the employee plan described above for the six months ended June 30, 2018:

	Outstanding Non- Qualified or Nonincentive Stock Awards			Weighted Average Exercise Price
Outstanding at December 31, 2017		654,655		$	66.45
Granted		115,797		$	75.50
Exercised		(279,718	)	$	61.73
Forfeited		(21,864	)	$	102.42
Outstanding at June 30, 2018		468,870		$	69.82

The following table summarizes information about the Company’s outstanding and exercisable stock options under the employee plan at June 30, 2018:

		Options Outstanding							Options Exercisable
Range of Exercise Prices		Number Outstanding		Weighted Average Remaining Contractual Life in Years		Weighted Average Exercise Price		Aggregate Intrinsic Value	Number Exercisable		Weighted Average Exercise Price		Aggregate Intrinsic Value
$	51.23		90,975		4.6	$	51.23			57,438	$	51.23
$	64.65 - $68.50		129,430		5.1	$	67.18			43,905	$	67.27
$	70.65 - $75.50		208,154		5.0	$	74.54			92,357	$	73.33
$	93.64 - $101.46		40,311		2.6	$	95.90			40,311	$	95.90
$	51.23 - $101.46		468,870		4.7	$	69.82	$6,956,000		234,011	$	70.66	$	3,525,000

The following is a summary of the restricted stock award activity under the employee plan described above for the six months ended June 30, 2018:

	Unvested Restricted Stock Award Shares			Weighted Average Grant Date Fair Value Per Share
Nonvested balance at December 31, 2017		364,121		$	65.84
Vested		(143,923	)	$	72.68
Forfeited		(3,016	)	$	64.45
Nonvested balance at June 30, 2018		217,182		$	64.73

The following is a summary of RSU activity under the employee plan described above for the six months ended June 30, 2018:

	Unvested RSUs			Weighted Average Grant Date Fair Value Per Unit
Nonvested balance at December 31, 2017		—		$	—
Granted		143,890		$	75.59
Forfeited		(1,260	)	$	75.50
Nonvested balance at June 30, 2018		142,630		$	75.59

The Company has a stock award plan for nonemployee directors of the Company which provides for the issuance of stock options and restricted stock. The director plan provides for automatic grants of restricted stock to nonemployee directors after each annual meeting of stockholders. In addition, the director plan allows for the issuance of stock options or restricted stock in lieu of cash for all or part of the annual director fee at the option of the director. The exercise prices for all options granted under the plan are equal to the fair market value per share of the Company’s common stock on the date of grant. The terms of the options are ten years. The restricted stock issued after each annual meeting of stockholders vests six months after the date of grant. Options granted and restricted stock issued in lieu of cash director fees vest in equal quarterly increments during the year to which they relate. At June 30, 2018, 468,058 shares were available for future grants under the director plan. The director stock award plan is intended as an incentive to attract and retain qualified independent directors.

The following is a summary of the stock option activity under the director plan described above for the six months ended June 30, 2018:

	Outstanding Non- Qualified or Nonincentive Stock Options			Weighted Average Exercise Price
Outstanding at December 31, 2017		157,617		$	67.54
Granted		2,640		$	85.30
Exercised		(29,153	)	$	57.47
Outstanding at June 30, 2018		131,104		$	70.14

The following table summarizes information about the Company’s outstanding and exercisable stock options under the director plan at June 30, 2018:

		Options Outstanding							Options Exercisable
Range of Exercise Prices		Number Outstanding		Weighted Average Remaining Contractual Life in Years		Weighted Average Exercise Price		Aggregate Intrinsic Value	Number Exercisable		Weighted Average Exercise Price		Aggregate Intrinsic Value
$	29.60		6,000		0.8	$	29.60			6,000	$	29.60
$	41.24 – $56.45		31,276		2.4	$	50.61			31,276	$	50.61
$	61.89 – $62.48		28,000		4.1	$	62.27			28,000	$	62.27
$	70.65 – $99.52		65,828		5.7	$	86.45			63,848	$	86.49
$	29.60 – $99.52		131,104		4.3	$	70.14	$2,247,000		129,124	$	69.90	$	2,247,000

The following is a summary of the restricted stock award activity under the director plan described above for the six months ended June 30, 2018:

	Unvested Restricted Stock Award Shares			Weighted Average Grant Date Fair Value Per Share

Nonvested balance at December 31, 2017		319		$	70.65
Granted		21,373		$	85.70
Vested		(583	)	$	77.28
Nonvested balance at June 30, 2018		21,109		$	85.71

The total intrinsic value of all stock options exercised under all of the Company’s plans was $6,623,000 and $1,530,000 for the six months ended June 30, 2018 and 2017, respectively. The actual tax benefit realized for tax deductions from stock option exercises was $1,974,000 and $555,000 for the six months ended June 30, 2018 and 2017, respectively.

The total intrinsic value of all the restricted stock vestings under all of the Company’s plans was $11,406,000 and $7,015,000 for the six months ended June 30, 2018 and 2017, respectively. The actual tax benefit realized for tax deductions from restricted stock vestings was $3,399,000 and $2,546,000 for the six months ended June 30, 2018 and 2017, respectively.

There were no RSU vestings for the six months ended June 30, 2018.

As of June 30, 2018, there was $3,245,000 of unrecognized compensation cost related to nonvested stock options, $12,484,000 related to nonvested restricted stock awards and $6,786,000 related to nonvested RSUs. The stock options are expected to be recognized over a weighted average period of approximately 2.0 years, restricted stock awards over approximately 2.5 years and RSUs over approximately 4.4 years. The total fair value of options vested was $3,143,000 and $2,492,000 during the six months ended June 30, 2018 and 2017, respectively. The fair value of the restricted stock vested was $11,406,000 and $7,015,000 for the six months ended June 30, 2018 and 2017, respectively.

The weighted average per share fair value of stock options granted during the six months ended June 30, 2018 and 2017 was $23.53 and $20.73, respectively. The fair value of the stock options granted during the six months ended June 30, 2018 and 2017 was $2,787,000 and $2,594,000, respectively. The Company currently uses treasury stock shares for restricted stock grants and stock option exercises. The fair value of each stock option was determined using the Black-Scholes option pricing model. The key input variables used in valuing the options during the six months ended June 30, 2018 and 2017 were as follows:

	Six months ended June 30,
	2018			2017
Dividend yield	None			None
Average risk-free interest rate		2.7	%		2.0	%
Stock price volatility		27	%		27	%
Estimated option term	Six years			Six years