Stock and Other Incentive Plans

Stock Incentive Plan

In May 2015, the Company's stockholders 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 The 2015 Incentive Plan, which superseded the 2007 Employee Stock Incentive Plan (the "Predecessor Plan"), will continue until terminated by the Company’s Board of Directors. As of December 31, 2016 and 2015, the Company had issued a total of 1,024,739 and 139,520 restricted shares, respectively, under the 2015 Incentive Plan for compensation-related awards to employees and directors, with a total of 2,475,261and 3,360,480, respectively, remaining which had not been issued. Under the Predecessor Plan for compensation-related awards to employees and directors, the Company had issued, net of forfeitures, a total of 1,878,637 and 1,816,580 restricted shares for the years ended December 31, 2015 and 2014, respectively. Non-vested shares issued under the 2015 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. The Company recognizes the impact of forfeitures as they occur. 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, 2016, 2015 and 2014 from the amortization of the value of shares over the vesting period issued to employees and directors was $7.4 million, $5.9 million and $4.1 million, respectively. The following table represents expected amortization of the Company's non-vested shares issued:



(Dollars in millions)	Future Amortization of Non-Vested Shares
2017	$	8.8
2018	$	6.7
2019	$	4.6
2020	$	4.4
2021	$	3.4
2022 and thereafter	$	4.3
Total	$	32.2

Executive Incentive Plan

On July 31, 2012, the Company adopted an Executive Incentive Plan, which was amended and restated on February 16, 2016 ("Executive Incentive Plan") to provide specific award criteria with respect to incentive awards made under the 2015 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. For 2016, 2015 and 2014, compensation expense resulting from the amortization of non-vested share grants to officers was approximately $2.6 million, $2.5 million, and $1.3 million, respectively. Details of the awards that have been earned from this plan are as follows:

•

On December 16, 2016, 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 $6.3 million, which were granted in the form of 213,639 non-vested shares, with a five-year vesting period, which will result in annual compensation expense of $1.3 million for the years ended 2017, 2018, 2019, and 2020, and $1.2 million for the year ended 2021, respectively.

•

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 2017, 2018 and $0.7 million for the years ended 2019 and 2020, respectively.

•

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 2017 and 2018, respectively.


•	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 year ended 2017.

Long-Term Incentive Program

In the first quarter of 2016 and 2015, the Company granted a performance-based award to officers excluding five named executive officers and five senior vice presidents under the Long-term Incentive Program adopted under the 2015 Incentive Plan (the "LTIP") totaling approximately $1.3 million and $1.0 million, respectively, which was granted in the form of 44,162 non-vested shares and 33,145 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. 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.

For 2016, 2015 and 2014, compensation expense resulting from the amortization of non-vested share grants to officers was approximately $0.5 million, $0.3 million, and $0.1 million, respectively.

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 2015 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 2016, 2015 and 2014, the Company issued 42,256 shares, 55,923 shares and 71,460 shares, respectively, to its officers through the salary deferral plan. For 2016, 2015 and 2014, compensation expense resulting from the amortization of non-vested share grants to officers was approximately $1.1 million, $1.1 million, and $1.7 million, respectively.

Non-employee Directors Incentive Plan

The Company issues non-vested shares to its non-employee directors under the 2015 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 2016, 2015 and 2014, the Company issued 21,374 shares, 23,201 shares, and 26,677 shares, respectively, to its non-employee directors through the 2015 Incentive Plan. For 2016, 2015 and 2014, compensation expense resulting from the amortization of non-vested share grants to directors was approximately $1.0 million, $1.0 million, and $0.5 million, respectively.

Other Grants

The Company issued three one-time non-vested share grants. For 2016, compensation expense resulting from the amortization of these non-vested share grants to officers was approximately $0.1 million, respectively. The following information provides information about each grant:


•	On March 1, 2016, the Company issued 50,000 shares to the Chief Financial Officer with a 10-year vesting period, resulting in compensation expense of $0.2 million per year, beginning in 2017.


•	On December 30, 2016, the Company issued 200,000 shares to the President and Chief Executive Officer with a 10-year vesting period, resulting in compensation expense of $0.6 million per year.


•	On December 30, 2016, the Company issued 150,000 shares to the Executive Chairman with a 5-year vesting period, resulting in compensation expense of $0.9 million per year.

A summary of the activity under the 2015 Incentive Plan and related information for the three years in the period ended December 31, 2016 follows:



	Year Ended December 31,
(Dollars in thousands, except per share data)	2016			2015			2014
Stock-based awards, beginning of year	1,092,262			1,057,732			1,788,168
Granted	885,219			251,789			269,129
Vested	(190,984		)	(210,955		)	(931,767		)
Forfeited	—			(6,304		)	(67,798		)
Stock-based awards, end of year	1,786,497			1,092,262			1,057,732
Weighted-average grant date fair value of:
Stock-based awards, beginning of year	$	24.72		$	24.01		$	23.81
Stock-based awards granted during the year	$	29.60		$	27.70		$	25.27
Stock-based awards vested during the year	$	24.34		$	25.05		$	24.13
Stock-based awards forfeited during the year	$	—		$	24.80		$	22.01
Stock-based awards, end of year	$	27.18		$	24.72		$	24.01
Grant date fair value of shares granted during the year	$	26,204		$	6,975		$	6,800

The vesting periods for the non-vested shares granted during 2016 ranged from one to ten years with a weighted-average amortization period remaining as of December 31, 2016 of approximately 5.9 years.

During 2016, 2015 and 2014, the Company withheld 48,428 shares, 49,225 shares and 371,017 shares, respectively, of common stock from its officers to pay estimated 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 for each year during 2016, 2015 and 2014.

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, 2016, the Company had issued 555,596 shares under the plan of which 9,575 shares were issued in 2016, 13,950 shares were issued in 2015 and 12,606 shares were issued in 2014.

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, 2016, 2015 and 2014, the Company had a total of 63,690 shares, 96,977 shares and 88,495 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 $1.2 million for the year ended December 31, 2016, $0.9 million for the year ended December 31, 2015, and $1.2 million for the year ended December 31, 2014.

A summary of the Employee Stock Purchase Plan activity and related information for the three years in the period ended December 31, 2016 is as follows:



	Year Ended December 31,
(Dollars in thousands, except per share data)	2016			2015			2014
Options outstanding, beginning of year	340,958			393,902			391,108
Granted	198,450			197,640			275,655
Exercised	(57,924		)	(44,462		)	(51,078		)
Forfeited	(22,081		)	(47,176		)	(63,908		)
Expired	(143,082		)	(158,946		)	(157,875		)
Options outstanding and exercisable, end of year	316,321			340,958			393,902
Weighted-average exercise price of:
Options outstanding, beginning of year	$	20.70		$	19.17		$	17.05
Options granted during the year	$	24.07		$	23.22		$	18.11
Options exercised during the year	$	21.40		$	19.41		$	17.76
Options forfeited during the year	$	23.16		$	19.90		$	18.58
Options expired during the year	$	18.11		$	20.41		$	15.80
Options outstanding, end of year	$	23.69		$	20.70		$	19.17
Weighted-average fair value of options granted during the year (calculated as of the grant date)	$	5.37		$	5.39		$	4.35
Intrinsic value of options exercised during the year	$	634		$	381		$	437
Intrinsic value of options outstanding and exercisable (calculated as of December 31)	$	2,098		$	2,597		$	3,209
Exercise prices of options outstanding (calculated as of December 31)	$	23.69		$	20.70		$	19.17
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.



	2016		2015		2014
Risk-free interest rates	1.06	%	0.67	%	0.38	%
Expected dividend yields	4.64	%	4.79	%	4.94	%
Expected life (in years)	1.42		1.38		1.39
Expected volatility	17.6	%	21.0	%	23.0	%
Expected forfeiture rates	85	%	80	%	75	%