XML 80 R20.htm IDEA: XBRL DOCUMENT v2.4.0.8
Equity Incentive Plans
9 Months Ended
Sep. 30, 2013
Share-based Compensation [Abstract]  
Equity Incentive Plans
Equity Incentive Plan

All grants of common shares and options to purchase common shares are issued under the Company's 2007 Equity Incentive Plan and an aggregate of 3,650,000 common shares, options to purchase common shares and restricted share units, subject to adjustment in the event of certain capital events, may be granted. At September 30, 2013, there were 1,942,628 shares available for grant under the 2007 Equity Incentive Plan.

Share Options
Share options granted under the 2007 Equity Incentive Plan have exercise prices equal to the fair market value of a common share at the date of grant. The options may be granted for any reasonable term, not to exceed 10 years, and for employees typically become exercisable at a rate of 25% per year over a four-year period. For non-employee Trustees, share options are vested upon issuance, however, the share options may not be exercised for a one year period subsequent to the grant date. The Company generally issues new common shares upon option exercise. A summary of the Company’s share option activity and related information is as follows:
 
 
Number of
shares
 
Option price
per share
 
Weighted avg.
exercise price
Outstanding at December 31, 2012
881,338

 
$
18.18

 

 
$
65.50

 
$
38.51

Exercised
(143,272
)
 
18.18

 

 
47.20

 
30.64

Granted
115,257

 
46.86

 

 
58.09

 
47.86

Forfeited
(12,658
)
 
36.56

 

 
60.42

 
56.90

Outstanding at September 30, 2013
840,665

 
$
18.18

 

 
$
65.50

 
$
40.85


The weighted average fair value of options granted was $12.35 and $12.08 during the nine months ended September 30, 2013 and 2012, respectively. The intrinsic value of stock options exercised was $2.9 million and $1.5 million during the nine months ended September 30, 2013 and 2012, respectively. Additionally, the Company repurchased 66,632 shares into treasury shares in conjunction with the stock options exercised during the nine months ended September 30, 2013 with a total value of $3.4 million. At September 30, 2013, stock-option expense to be recognized in future periods was $2.0 million.

The expense related to share options included in the determination of net income for the nine months ended September 30, 2013 and 2012 was $647 thousand and $709 thousand, respectively. The following assumptions were used in applying the Black-Scholes option pricing model at the grant dates: risk-free interest rate of 1.0% and 1.1% to 1.4% for the nine months ended September 30, 2013 and 2012, respectively, dividend yield of 5.4% to 6.5% for the nine months ended September 30, 2013 and 6.3% to 6.7% for the nine months ended September 30, 2012, volatility factors in the expected market price of the Company’s common shares of 50.7% for the nine months ended September 30, 2013 and 51.3% to 51.4% for the nine months ended September 30, 2012, 0.23% to 0.29% and 0.25% expected forfeiture rate for the nine months ended September 30, 2013 and 2012, respectively, and an expected life of approximately six years for both the nine months ended September 30, 2013 and 2012. The Company uses historical data to estimate the expected life of the option and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. Additionally, expected volatility is computed based on the average historical volatility of the Company’s publicly traded shares.
The following table summarizes outstanding options at September 30, 2013:
Exercise price range
Options
outstanding
 
Weighted avg.
life remaining
 
Weighted avg.
exercise price
 
Aggregate intrinsic
value  (in thousands)
$ 18.18 - 19.99
201,859

 
5.4
 
 
 
 
 20.00 - 29.99

 
0.0
 
 
 
 
 30.00 - 39.99
25,731

 
4.5
 
 
 
 
 40.00 - 49.99
502,222

 
5.9
 
 
 
 
 50.00 - 59.99
17,500

 
6.7
 
 
 
 
 60.00 - 65.50
93,353

 
3.3
 
 
 
 
 
840,665

 
5.5
 
$
40.85

 
$
8,231





The following table summarizes exercisable options at September 30, 2013:
Exercise price range
Options
outstanding
 
Weighted avg.
life  remaining
 
Weighted avg.
exercise price
 
Aggregate  intrinsic
value (in thousands)
$ 18.18 - 19.99
201,859

 
5.4
 
 
 
 
 20.00 - 29.99

 
0.0
 
 
 
 
 30.00 - 39.99
18,460

 
3.8
 
 
 
 
 40.00 - 49.99
292,290

 
4.0
 
 
 
 
 50.00 - 59.99
10,000

 
4.6
 
 
 
 
 60.00 - 65.50
93,353

 
3.3
 
 
 
 
 
615,962

 
4.3
 
$
38.78

 
$
7,667



Nonvested Shares
A summary of the Company’s nonvested share activity and related information is as follows:
 
Number  of
shares
 
Weighted avg.
grant  date
fair value
 
Weighted avg.
life remaining
Outstanding at December 31, 2012
322,808

 
$
42.52

 
 
Granted
198,833

 
47.15

 
 
Vested
(145,570
)
 
39.88

 
 
Forfeited
(4,207
)
 
45.39

 
 
Outstanding at September 30, 2013
371,864

 
$
46.00

 
1.24

The holders of nonvested shares have voting rights and receive dividends from the date of grant. These shares vest ratably over a period of three to four years. The fair value of the nonvested shares that vested was $6.7 million and $7.7 million for the nine months ended September 30, 2013 and 2012, respectively. At September 30, 2013, unamortized share-based compensation expense related to nonvested shares was $9.5 million.

Restricted Share Units
A summary of the Company’s restricted share unit activity and related information is as follows:
 
Number  of
Shares
 
Weighted
Average
Grant Date
Fair Value
 
Weighted
Average
Life
Remaining
Outstanding at December 31, 2012
10,925

 
$
44.62

 
 
Granted
17,530

 
58.38

 
 
Vested
(10,925
)
 
44.62

 
 
Outstanding at September 30, 2013
17,530

 
$
58.38

 
0.61


The holders of restricted share units receive dividend equivalents from the date of grant. The share units vest upon the earlier of the day preceding the next annual meeting of shareholders or a change of control. The settlement date for the shares is selected by the non-employee Trustee, and ranges from one year from the grant date to upon termination of service. At September 30, 2013, unamortized share-based compensation expense related to restricted share units was $627 thousand.