Stock and Other Incentive Plans

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Incentive Plan

In May 2015, the Company's stockholders approved the 2015 Stock Incentive Plan (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 The 2015 Incentive Plan, which superseded the 2007 Employee Stock Incentive Plan (the "Predecessor Plan"), will continue until terminated by the Company’s Board of Directors.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, 2018 and 2017, the Company had issued a total of 1,711,240 and 1,438,228 restricted shares, respectively, under the 2015 Incentive Plan for compensation-related awards to employees and directors, with a total of 1,788,760 and 2,061,772, 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 restricted shares for the year ended December 31, 2015. 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, included in general and administrative expense, recognized during the years ended December 31, 2018, 2017 and 2016 from the amortization of the value of shares over the vesting period issued to employees and directors was $10.4 million, $9.8 million and $7.4 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
2019	$	8.6
2020	8.1
2021	7.0
2022	4.5
2023	2.3
2024 and thereafter	2.8
Total	$	33.3

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. For 2018, 2017 and 2016, compensation expense, included in general and administrative expense, resulting from the amortization of non-vested share grants to officers was approximately $5.7 million, $5.0 million, and $4.0 million, respectively. Details of the awards that have been earned from this plan are as follows:

•

On December 12, 2018, the Company granted non-vested stock awards for TSR performance to its four named executive officers and five senior vice presidents with a grant date fair value totaling $5.0 million, which were granted in the form of 165,261 non-vested shares, with a five-year vesting period, which will result in annual compensation expense of $1.0 million for the each of 2019, 2020, 2021, and 2022, and $0.9 million for 2023, respectively.

•

On December 11, 2017, the Company granted non-vested stock awards for TSR performance to its five named executive officers and four senior vice presidents with a grant date fair value totaling $10.1 million, which were granted in the form of 309,874 non-vested shares, with a five-year vesting period, which will result in annual compensation expense of $2.0 million for the each of 2019, 2020, and 2021, and $1.9 million for 2022, respectively.


•	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 each of 2019, and 2020, and $1.2 million for 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 year 2018 and $0.7 million for each of 2019 and 2020, respectively.

Long-Term Incentive Program

In the first quarter of 2018 and 2017, the Company granted a performance-based award to officers, excluding the four named executive officers and five senior vice presidents, under the Long-term Incentive Program adopted under the 2015 Incentive Plan (the "LTIP") totaling approximately $1.2 million and $1.3 million, which was granted in the form of 43,414 non-vested shares and 41,368 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.

For 2018, 2017 and 2016, compensation expense resulting from the amortization of non-vested share grants to officers was approximately $1.2 million, $1.1 million, and $1.1 million, respectively.

Salary Deferral Plan

The Company's salary deferral plan allows certain of its 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 2018, 2017 and 2016, the Company issued 33,348 shares, 39,016 shares and 42,256 shares, respectively, to its officers through the salary deferral plan. For 2018, 2017 and 2016, compensation expense resulting from the amortization of non-vested share grants to officers was approximately $1.0 million, $1.2 million, and $1.2 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 2018, 2017 and 2016, the Company issued 30,989 shares, 23,231 shares, and 21,374 shares, respectively, to its non-employee directors through the 2015 Incentive Plan. For 2018, 2017 and 2016, compensation expense resulting from the amortization of non-vested share grants to directors was approximately $0.8 million, $0.8 million, and $1.0 million, respectively.

Other Grants

The Company issued three one-time non-vested share grants related to executive management transition in 2016. For 2018, 2017 and 2016 compensation expense resulting from the amortization of these non-vested share grants to officers was approximately $1.7 million, $1.7 million, and $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.


•	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, 2018 follows:



	Year Ended December 31,
(Dollars in thousands, except per share data)	2018			2017			2016
Stock-based awards, beginning of year	1,907,645			1,786,497			1,092,262
Granted	273,012			413,489			885,219
Vested	(410,794		)	(292,341		)	(190,984		)
Stock-based awards, end of year	1,769,863			1,907,645			1,786,497
Weighted-average grant date fair value of:
Stock-based awards, beginning of year	$	28.44		$	27.18		$	24.72
Stock-based awards granted during the year	$	29.72		$	32.05		$	29.60
Stock-based awards vested during the year	$	25.32		$	25.88		$	24.34
Stock-based awards, end of year	$	29.36		$	28.44		$	27.18
Grant date fair value of shares granted during the year	$	8,114		$	13,254		$	26,204

The vesting periods for the non-vested shares granted during 2018 ranged from one to eight years with a weighted-average amortization period remaining as of December 31, 2018 of approximately 5.1 years.

During 2018, 2017 and 2016, the Company withheld 151,353 shares, 94,403 shares and 48,248 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 2018, 2017 and 2016.

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, 2018, the Company had issued 591,114 shares under the plan of which 9,487 shares were issued in 2018, 26,031 shares were issued in 2017 and 9,575 shares were issued in 2016.

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. 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 $0.4 million for the year ended December 31, 2018, $0.8 million for the year ended December 31, 2017, and $1.2 million for the year ended December 31, 2016.

A summary of the Employee Stock Purchase Plan activity and related information for the three years in the period ended December 31, 2018 is as follows:



	Year Ended December 31,
(Dollars in thousands, except per share data)	2018			2017			2016
Options outstanding, beginning of year	318,100			316,321			340,958
Granted	203,836			206,824			198,450
Exercised	(16,716		)	(32,076		)	(57,924		)
Forfeited	(40,897		)	(40,659		)	(22,081		)
Expired	(135,790		)	(132,310		)	(143,082		)
Options outstanding and exercisable, end of year	328,533			318,100			316,321
Weighted-average exercise price of:
Options outstanding, beginning of year	$	25.00		$	23.69		$	20.70
Options granted during the year	$	27.30		$	25.77		$	24.07
Options exercised during the year	$	24.01		$	24.31		$	21.40
Options forfeited during the year	$	24.06		$	25.01		$	23.16
Options expired during the year	$	23.55		$	23.22		$	18.11
Options outstanding, end of year	$	24.17		$	25.00		$	23.69
Weighted-average fair value of options granted during the year (calculated as of the grant date)	$	7.81		$	6.31		$	5.37
Intrinsic value of options exercised during the year	$	71		$	271		$	634
Intrinsic value of options outstanding and exercisable (calculated as of December 31)	$	1,402		$	2,683		$	2,098
Exercise prices of options outstanding (calculated as of December 31)	$	24.17		$	25.00		$	23.69
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.



	2018		2017		2016
Risk-free interest rates	1.89	%	1.20	%	1.06	%
Expected dividend yields	3.66	%	3.70	%	4.64	%
Expected life (in years)	1.45		1.45		1.42
Expected volatility	28.4	%	20.4	%	17.6	%
Expected forfeiture rates	85	%	85	%	85	%