Stock-Based Compensation

12 Months Ended

Dec. 31, 2018

Stock-Based Compensation

The Company has stock-based compensation plans under which it is currently authorized to grant restricted stock and other stock awards. As of December 31, 2018, there were 5.0 million remaining shares available to grant under these plans. The Company either purchases shares on the open market or issues new shares of common stock to satisfy the vesting of stock based awards.

Total stock-based compensation expense (after tax) was $4.6 million, $2.7 million and $3.3 million in 2018, 2017 and 2016, respectively.

As of December 31, 2018, total remaining unrecognized compensation expense related to stock-based compensation was approximately $7.2 million (before income taxes) which will be amortized over a weighted average period of 1.7 years.

Stock awards

Non-employee directors receive shares of common stock in addition to and in lieu of cash payment for directors' fees. Shares of common stock were issued under the non-employee director stock compensation plan or the non-employee director long-term incentive compensation plan. There were 38,605 shares with a fair value of $1.0 million, 40,572 shares with a fair value of $1.1 million and 37,218 shares with a fair value of $1.1 million issued to non-employee directors during the years ended December 31, 2018, 2017 and 2016, respectively.

Restricted stock awards

In February 2018, the Company began granting restricted stock awards under the long-term performance-based incentive plan to certain key employees. The restricted stock awards granted will vest after three years. The grant-date fair value is the market price of the Company's stock on the grant date. At December 31, 2018, the total nonvested shares were 22,838 with a weighted average grant-date fair value of $27.48 per share.

Performance share awards

Since 2003, key employees of the Company have been granted performance share awards each year under the long-term performance-based incentive plan. Entitlement to performance shares is established by either the market condition or the performance metrics and service condition relative to the designated award.

Target grants of performance shares outstanding at December 31, 2018, were as follows:



Grant Date	Performance Period	Target Grant of Shares
February 2016	2016-2018	255,773
March 2016	2016-2018	2,151
February 2017	2017-2019	164,558
February 2018	2018-2020	246,309

Under the market condition for these performance share awards, participants may earn from zero to 200 percent of the apportioned target grant of shares based on the Company's total shareholder return relative to that of the selected peer group. Compensation expense is based on the grant-date fair value as determined by Monte Carlo simulation. The blended volatility term structure ranges are comprised of 50 percent historical volatility and 50 percent implied volatility. Risk-free interest rates were based on U.S. Treasury security rates in effect as of the grant date. Assumptions used for grants applicable to the market condition for certain performance shares issued in 2018, 2017 and 2016 were:



				2018						2017						2016
Weighted average grant-date fair value					$34.55						$24.31						$14.60
Blended volatility range	17.87	%	–	22.14		%	22.70	%	–	25.56		%	29.25	%	–	32.51		%
Risk-free interest rate range	1.86	%	–	2.46		%	.69	%	–	1.61		%	.47	%	–	.92		%
Weighted average discounted dividends per share					$2.46						$1.70						$1.56

Under the performance conditions for these performance share awards, participants may earn from zero to 200 percent of the apportioned target grant of shares. The performance conditions are based on the Company's compound annual growth rate in earnings from continuing operations before interest, taxes, depreciation, depletion and amortization and the Company's compound annual growth rate in earnings from continuing operations. The performance shares applicable to these performance conditions have a weighted average grant-date fair value of $27.48 per share.

There were no performance shares that vested in 2018. The fair value of the performance shares that vested during the years ended December 31, 2017 and 2016, was $9.6 million and $953,000, respectively.

A summary of the status of the performance share awards for the year ended December 31, 2018, was as follows:



	Number of Shares	Weighted Average Grant-Date Fair Value
Nonvested at beginning of period	425,534	$	18.35
Granted	246,309	31.02
Less:
Forfeited	3,052	14.60
Nonvested at end of period	668,791	$	23.03