Equity Incentive Plans

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement, Noncash Expense [Abstract]

Equity Incentive Plan

All grants of common shares and options to purchase common shares were issued under the Company's 2007 Equity Incentive Plan prior to May 12, 2016 and under the 2016 Equity Incentive Plan on and after May 12, 2016. Under the 2016 Equity Incentive Plan, an aggregate of 1,950,000 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 December 31, 2019, there were 1,091,880 shares available for grant under the 2016 Equity Incentive Plan.

Share Options

Share options 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. 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, 2016	285,986		$	19.02	—	$	61.79	$	51.93
Exercised	(29,253	)	46.86		—	61.79		54.54
Granted	2,215		76.63		—	76.63		76.63
Forfeited/Expired	(1,342	)	51.64		—	61.79		59.52
Outstanding at December 31, 2017	257,606		$	19.02	—	$	76.63	$	51.81
Exercised	(25,721	)	45.20		—	61.79		50.68
Granted	3,835		56.94		—	56.94		56.94
Forfeited/Expired	(845	)	51.64		—	61.79		61.12
Outstanding at December 31, 2018	234,875		$	19.02	—	$	76.63	$	51.98
Exercised	(118,786	)	19.02		—	61.79		48.71
Granted	1,941		73.84		—	73.84		73.84
Outstanding at December 31, 2019	118,030		$	44.62	—	$	76.63	$	55.63

The weighted average fair value of options granted was $4.64, $3.03 and $7.91 during 2019, 2018 and 2017, respectively. The intrinsic value of stock options exercised was $2.8 million, $0.4 million, and $0.5 million during the years ended December 31, 2019, 2018 and 2017, respectively. Additionally, the Company repurchased 90,873 shares in conjunction with the stock options exercised during the year ended December 31, 2019 with a total value of $6.5 million.

The expense related to share options included in the determination of net income for the years ended December 31, 2019, 2018 and 2017 was $10 thousand, $0.3 million, and $0.7 million, respectively. The following assumptions were used in applying the Black-Scholes option pricing model at the grant dates: risk-free interest rate of 2.4%, 2.7% and 2.1% in 2019, 2018 and 2017, respectively, dividend yield of 6.7%, 7.6% and 5.4% in 2019, 2018 and 2017, respectively, volatility factors in the expected market price of the Company’s common shares of 19.1%, 18.9% and 22.0% in 2019, 2018 and 2017, respectively, 0.75%, 0.74% and 0.74% expected forfeiture rates for the years ended 2019, 2018 and 2017, respectively, and an expected life of approximately six years for the years ended 2019, 2018 and 2017. 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.

At December 31, 2019, stock-option expense to be recognized in future periods was as follows (in thousands):



	Amount
Year:
2020	$	9
2021	5
2022	2
Total	$	16

The following table summarizes outstanding and exercisable options at December 31, 2019:



	Options outstanding						Options exercisable
Exercise price range	Options outstanding	Weighted avg. life remaining	Weighted avg. exercise price		Aggregate intrinsic value (in thousands)		Options outstanding	Weighted avg. life remaining	Weighted avg. exercise price		Aggregate intrinsic value (in thousands)
44.62 - 49.99	31,445	2.1					31,445	2.1
50.00 - 59.99	31,710	4.5					28,834	4.1
60.00 - 69.99	50,719	5.1					50,719	5.1
70.00 - 76.63	4,156	8.1					1,108	7.1
	118,030	4.3	$	55.63	$	1,791	112,106	4.0	$	55.08	$	1,751

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, 2018	655,056		$	64.16
Granted	208,755		74.13
Vested	(346,145	)	64.66
Forfeited	(8,328	)	66.38
Outstanding at December 31, 2019	509,338		$	67.88	0.86

The holders of nonvested shares have voting rights and receive dividends from the date of grant. The fair value of the nonvested shares that vested was $22.7 million, $16.0 million, and $15.1 million for the years ended December 31, 2019, 2018 and 2017, respectively. At December 31, 2019, unamortized share-based compensation expense related to nonvested shares was $15.3 million and will be recognized in future periods as follows (in thousands):



	Amount
Year:
2020	$	8,187
2021	5,243
2022	1,873
Total	$	15,303

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, 2018	23,571		$	61.25
Granted	27,392		77.19
Vested	(24,727	)	61.62
Outstanding at December 31, 2019	26,236		$	77.54	0.42

The holders of restricted share units receive dividend equivalents from the date of grant. At December 31, 2019, unamortized share-based compensation expense related to restricted share units was $848 thousand which will be recognized in 2020.