Stock and Other Incentive Plans

Stock Incentive Plan

In May 2015, the Company's shareholders approved the 2015 Incentive Plan which authorizes the Company to issue 3,500,000 shares of common stock to its employees and directors. The 2015 Incentive Plan, which superseded the 2007 Incentive Plan (the "Predecessor Plan"), will continue until terminated by the Company’s Board of Directors. As of December 31, 2015, the Company had issued, net of forfeitures, a total of 139,520 restricted shares under the 2015 Incentive Plan for compensation-related awards to employees and directors, with a total of 3,360,480 remaining which had not been issued. Also in 2015, the Company issued, net of forfeitures a total of 1,878,637 shares under its Predecessor Plan. As of December 31, 2014 and 2013, the Company had issued, net of forfeitures, a total of 1,816,580 and 1,693,266 restricted shares respectively, under its Predecessor Plan for compensation-related awards to employees and directors with a total 573,692 and 697,006 authorized shares, respectively, remaining which had not been issued. Non-vested shares issued under the Incentive Plan are generally subject to fixed vesting periods varying from three to eight years beginning on the date of issue. If a recipient voluntarily terminates his or her relationship with the Company or is terminated for cause before the end of the vesting period, the shares are forfeited, at no cost to the Company. Once the shares have been issued, the recipient has the right to receive dividends and the right to vote the shares. Compensation expense recognized during the years ended December 31, 2015, 2014 and 2013 from the amortization of the value of shares over the vesting period issued to employees was $4.9 million, $3.6 million and $4.3 million, respectively.

Executive Incentive Plan

On July 31, 2012, the Company adopted an Executive Incentive Plan. The Executive Incentive Plan was amended and restated on February 16, 2016 to provide specific award criteria with respect to incentive awards made under the Incentive Plan subject to the discretion of the Compensation Committee. No new shares of common stock were authorized in connection with the Executive Incentive Plan. Under the terms of the Executive Incentive Plan, the Company's named executive officers, and certain other members of senior management, may earn incentive awards in the form of cash and non-vested stock. Cash incentive awards are based on individual and Company performance. Company performance is measured over a four-quarter period against targeted financial and operational metrics set in advance by the Compensation Committee. Non-vested stock awards are based on the Company's relative total shareholder return ("TSR") performance over one-year and three-year periods, measured against the Company's peer group. From 2013 through 2015, the officers could elect to receive all or a portion of the cash based awards on Company performance in the form of non-vested stock awards. This option has been eliminated from the Executive Incentive Plan beginning in 2016. The following details the awards that have been earned from this plan:

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On February 16, 2016, the Company granted cash incentive and non-vested performance-based awards totaling $5.8 million to its five named executive officers and five senior vice presidents. The officers could elect cash based awards or non-vested stock awards. Cash awards totaled $1.1 million. The non-vested awards, which the officers elected to receive in lieu of cash, had a grant date fair value totaling $4.7 million, which were granted in the form of 163,788 non-vested shares, with either a three- or five-year vesting period, resulting in annual compensation expense of $1.1 million for the years ended 2016, 2017, 2018 and $0.7 million for the years ended 2019 and 2020.

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On December 18, 2015, the Company granted non-vested stock awards for TSR performance to its five named executive officers and five senior vice presidents with a grant date fair value totaling $3.9 million. The awards were granted in the form of 139,000 non-vested shares, with a three-year vesting period, which will result in annual compensation expense of $1.3 million for the years ended 2016, 2017 and 2018, respectively.

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On December 31, 2014, the Company granted non-vested stock awards for TSR performance to its five named executive officers and five senior vice presidents with a grant date fair value totaling $3.9 million, which were granted in the form of 140,930 non-vested shares, with a three-year vesting period, which will result in annual compensation expense of $1.3 million for the years ended 2015, 2016 and 2017, respectively.

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On December 31, 2013, the Company granted non-vested stock awards for TSR performances to its five named executive officers and six senior vice presidents with a grant date fair value totaling $1.0 million, which were granted in the form of 47,709 non-vested shares, with a three-year vesting period, which will result in annual compensation expense of $0.3 million for the years ended 2014, 2015 and 2016, respectively.

On February 16, 2016, the Company amended and restated the Executive Incentive Plan (the “Amended and Restated Executive Incentive Plan”). The Amended and Restated Executive Incentive Plan modifies the existing Executive Incentive Plan by revising the methodology used by the compensation committee of the Board of Directors for setting performance targets. The revised plan is intended to further increase the percentage of executive compensation that is subject to performance-based measurement criteria. The Amended and Restated Executive Incentive Plan is filed as Exhibit 10.1 to this Annual Report on Form 10-K and is incorporated herein by reference.

Long-Term Incentive Program

In the first quarter of 2015 and 2014, the Company granted a performance-based award under the Long-term Incentive Program adopted under the Incentive Plan (the "LTIP") totaling approximately $1.0 million and $0.6 million, respectively, which was granted in the form of 33,145 non-vested shares and 27,094 non-vested shares, respectively. The shares have vesting periods ranging from three to eight years with a weighted average vesting period of approximately six years. No performance-based awards were released under the Incentive Plan during 2013. Beginning in 2012, the Company's executive officers were no longer eligible to participate in the LTIP and beginning in 2013, five senior vice presidents were also no longer eligible to participate.

In the first quarter of 2014, the Company granted a special release of 2,968 non-vested shares to three of its officers in lieu of a cash compensation increase. The shares have a vesting period of eight years.

Salary Deferral Plan

The Company's salary deferral plan allows officers to elect to defer up to 50% of their base salary in the form of non-vested shares issued under the Incentive Plan subject to long-term vesting. The number of shares will be increased through a Company match depending on the length of the vesting period selected by the officer. The officer's vesting period choices are: three years for a 30% match; five years for a 50% match; and eight years for a 100% match. During 2015, 2014 and 2013, the Company issued 55,923 shares, 71,460 shares and 66,787 shares, respectively, to its officers through the salary deferral plan.

Non-employee Directors Incentive Plan

The Company issues non-vested shares to its non-employee directors under the Incentive Plan. The directors’ shares issued have a one-year vesting period beginning with the May 2015 grant (previously a three-year vesting period) and are subject to forfeiture prior to such date upon termination of the director’s service, at no cost to the Company. During 2015, 2014 and 2013, the Company issued 23,201 shares, 26,677 shares, and 20,256 shares, respectively, to its non-employee directors through the Incentive Plan. For 2015, 2014 and 2013, compensation expense resulting from the amortization of non-vested share grants to directors was approximately $1.0 million, $0.5 million, and $0.6 million, respectively.

A summary of the activity under the Incentive Plan and related information for the three years in the period ended December 31, 2015 follows:



	Year Ended December 31,
	2015			2014			2013
Stock-based awards, beginning of year	1,057,732			1,788,168			1,770,061
Granted	251,789			269,129			134,752
Vested	(210,955		)	(931,767		)	(116,645		)
Forfeited	(6,304		)	(67,798		)	—
Stock-based awards, end of year	1,092,262			1,057,732			1,788,168
Weighted-average grant date fair value of:
Stock-based awards, beginning of year	$	24.01		$	23.81		$	23.97
Stock-based awards granted during the year	$	27.70		$	25.27		$	23.90
Stock-based awards vested during the year	$	25.05		$	24.13		$	26.35
Stock-based awards forfeited during the year	$	24.80		$	22.01		$	—
Stock-based awards, end of year	$	24.72		$	24.01		$	23.81
Grant date fair value of shares granted during the year	$	6,975,024		$	6,800,122		$	3,220,623

The vesting periods for the non-vested shares granted during 2015 ranged from one to eight years with a weighted-average amortization period remaining as of December 31, 2015 of approximately 3.6 years.

During 2015, 2014 and 2013, the Company withheld 49,225 shares, 371,017 shares and 18,118 shares, respectively, of common stock from its officers to pay estimated minimum withholding taxes related to the vesting of shares.

401(k) Plan

The Company maintains a 401(k) plan that allows eligible employees to defer salary, subject to certain limitations imposed by the Internal Revenue Code. The Company provides a matching contribution of up to 3% of each eligible employee’s salary, subject to certain limitations. The Company’s matching contributions were approximately $0.4 million during 2015, 2014 and 2013.

Dividend Reinvestment Plan

The Company is authorized to issue 1,000,000 shares of common stock to stockholders under the Dividend Reinvestment Plan. As of December 31, 2015, the Company had issued 546,021 shares under the plan of which 13,950 shares were issued in 2015, 12,606 shares were issued in 2014 and 16,422 shares were issued in 2013.

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan, pursuant to which the Company is authorized to issue shares of common stock. As of December 31, 2015, 2014 and 2013, the Company had a total of 96,977 shares, 88,495 shares and 142,367 shares authorized under the Employee Stock Purchase Plan, respectively, which had not been issued or optioned. Under the Employee Stock Purchase Plan, each eligible employee in January of each year is able to purchase up to $25,000 of common stock at the lesser of 85% of the market price on the date of grant or 85% of the market price on the date of exercise of such option. The number of shares subject to each year’s option becomes fixed on the date of grant. Options granted under the Employee Stock Purchase Plan expire if not exercised 27 months after each such option’s date of grant. Cash received from employees upon exercising options under the Employee Stock Purchase Plan was approximately $0.9 million for the year ended December 31, 2015, $1.2 million for the year ended December 31, 2014, and $1.3 million for the year ended December 31, 2013.

A summary of the Employee Stock Purchase Plan activity and related information for the three years in the period ended December 31, 2015 is as follows:



	Year Ended December 31,
	2015			2014			2013
Options outstanding, beginning of year	393,902			391,108			433,452
Granted	197,640			275,655			246,717
Exercised	(44,462		)	(51,078		)	(69,076		)
Forfeited	(47,176		)	(63,908		)	(49,434		)
Expired	(158,946		)	(157,875		)	(170,551		)
Options outstanding and exercisable, end of year	340,958			393,902			391,108
Weighted-average exercise price of:
Options outstanding, beginning of year	$	19.17		$	17.05		$	16.78
Options granted during the year	$	23.22		$	18.11		$	20.41
Options exercised during the year	$	19.41		$	17.76		$	17.09
Options forfeited during the year	$	19.90		$	18.58		$	17.98
Options expired during the year	$	20.41		$	15.80		$	17.99
Options outstanding, end of year	$	20.70		$	19.17		$	17.05
Weighted-average fair value of options granted during the year (calculated as of the grant date)	$	5.39		$	4.35		$	5.08
Intrinsic value of options exercised during the year	$	380,615		$	436,547		$	375,335
Intrinsic value of options outstanding and exercisable (calculated as of December 31)	$	2,597,238		$	3,209,456		$	1,665,331
Exercise prices of options outstanding (calculated as of December 31)	$	20.70		$	19.17		$	17.05
Weighted-average contractual life of outstanding options (calculated as of December 31, in years)	0.8			0.8			0.8

The fair values for these options were estimated at the date of grant using a Black-Scholes options pricing model with the weighted-average assumptions for the options granted during the period noted in the following table. The risk-free interest rate was based on the U.S. Treasury constant maturity-nominal two-year rate whose maturity is nearest to the date of the expiration of the latest option outstanding and exercisable; the expected dividend yield was based on the expected dividends of the current year as a percentage of the average stock price of the prior year; the expected life of each option was estimated using the historical exercise behavior of employees; expected volatility was based on historical volatility of the Company’s common stock; and expected forfeitures were based on historical forfeiture rates within the look-back period.



	2015		2014		2013
Risk-free interest rates	0.67	%	0.38	%	0.25	%
Expected dividend yields	4.79	%	4.94	%	5.17	%
Expected life (in years)	1.38		1.39		1.35
Expected volatility	21.0	%	23.0	%	25.6	%
Expected forfeiture rates	85	%	75	%	85	%