Note 15 - Stock-Based Compensation

The Company’s incentive compensation plans allow the Company to grant awards to certain employees in the form of stock options, stock awards, RSUs, stock appreciation rights, PSUs, dividend equivalents and other awards. Compensation related to these awards is determined based on the fair value on the date of the grant and is amortized to expense over the vesting period. For RSUs and PSUs, the Company recognizes compensation expense based on the earlier of the vesting date or the date when the employee becomes eligible to retire. Awards settled in common shares have been settled with treasury shares. If awards can be settled in cash, these awards are recorded as liabilities and marked to market.

The following table discloses the amount of stock-based compensation expense:


	Stock-Based Compensation
	2012		2013		2014
Stock options	$	3,388	$	3,934	$	4,218
Stock awards		67		—		—
Restricted stock units		1,169		1,092		2,206
Performance stock units		3,412		1,947		2,623

Total stock-based compensation	$	8,036	$	6,973	$	9,047

Stock Options

The 2001, 2006, 2010 and 2014 incentive compensation plans provide for granting options to key employees to purchase common shares at prices not less than market at the date of grant. Options under these plans may have terms of up to ten years becoming exercisable in whole or in consecutive installments, cumulative or otherwise. The plans allow the granting of nonqualified stock options which are not intended to qualify for the tax treatment applicable to incentive stock options under provisions of the Internal Revenue Code.

The Company’s 2002 nonqualified stock option plan provides for granting options to directors who are not current or former employees of the Company to purchase common shares at prices not less than market at the date of grant. Options granted under this plan have a term of ten years and become exercisable one year after the date of grant.

In April 2009, executives participating in the 2009 – 2011 Long-Term Incentive Plan were granted 1,155,000 stock options which vested one third each year through April 2012. This plan does not contain any performance-based criteria. In March 2010, executives participating in the 2010 – 2012 Long-Term Incentive Plan were granted 303,120 stock options which vested one third each year through March 2013. During 2011, executives participating in the 2011 – 2013 Long-Term Incentive Plan were granted 311,670 stock options, which vested one-third each year through 2014. In February 2012, executives participating in the 2012 – 2014 Long-Term Incentive Plan were granted 589,934 stock options which will vest one-third each year through February 2015. In February 2013, executives participating in the 2013-2015 Long-Term Incentive Plan were granted 330,639 stock options, which will vest one-third each year through February 2016. In February 2014, executives participating in the 2014-2016 Long-Term Incentive Plan were granted 380,064 stock options, which will vest one-third each year through February 2017. The fair value of these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:


	2012			2013			2014
Risk-free interest rate		1.2	%		1.2	%		2.0	%
Dividend yield		2.7	%		1.7	%		1.8	%
Expected volatility of the Company’s common stock		0.644			0.646			0.640
Expected life in years		6.0			6.0			6.0

The weighted average fair value of options granted in 2012, 2013 and 2014 was $7.33, $12.97 and $12.26, respectively. Compensation expense for these options is recorded over the vesting period.

Summarized information for the plans follows:


	Number of Shares			Weighted Average Exercise Price (per share)		Aggregate Intrinsic Value (thousands)
Outstanding at January 1, 2014		1,710,244		$	19.09
Granted		380,064			23.96
Exercised		(245,745	)		18.11
Canceled		(78,641	)		20.76

Outstanding at December 31, 2014		1,765,922			20.20	$	25,514

Exercisable at December 31, 2014		992,759			18.55		15,985

Available for Grant at December 31, 2014		2,834,394


	Year ended December 31
	2012		2013		2014
Weighted average grant-date fair value of options granted (per share)	$	7.33	$	12.97	$	12.26

Aggregate intrinsic value of options exercised (thousands)	$	10,256	$	877	$	2,711

Total fair value of shares vested (thousands)	$	2,641	$	3,407	$	3,905

The weighted average remaining contractual life of options outstanding at December 31, 2014 is 7.0 years. Approximately 393,157 stock options will become exercisable over the next twelve months.

Segregated disclosure of options outstanding at December 31, 2014 was as follows:


	Range of Exercise Prices
	Less than or equal to $15.63		Greater than $15.63

Options outstanding		597,663		1,168,259

Weighted average exercise price	$	14.34	$	23.20

Remaining contractual life		6.5		7.3

Options exercisable		408,525		584,234

Weighted average exercise price	$	13.75	$	21.91

At December 31, 2014, the Company had $5,128 of unvested compensation cost related to stock options, and this cost will be recognized as expense over a weighted average period of 21 months.

Restricted Stock Units

Under the 1998, 2001, 2006, 2010 and 2014 Incentive Compensation Plans, RSUs may be granted to officers and certain other employees. Compensation related to the RSUs is determined based on the fair value of the Company’s stock on the date of grant and is amortized to expense over the vesting period. The RSUs granted in 2011, 2012, 2013 and 2014 have vesting periods ranging from two to four years. The Company recognizes compensation expense based on the earlier of the vesting date or the date when the employee becomes eligible to retire. The following table provides details of the nonvested RSUs for 2014:


	Number of Restricted Units			Weighted Average Grant-Date Fair Value (per share)
Nonvested at January 1, 2014		60,686		$	22.61
Granted		181,500			27.53
Vested		(46,144	)		25.69
Accrued dividend equivalents		1,796			31.40

Nonvested at December 31, 2014		197,838		$	26.48


	Year ended December 31
	2012		2013		2014
Weighted average grant-date fair value of restricted shares granted (per share)	$	15.54	$	25.72	$	27.53

Total fair value of shares vested (thousands)	$	1,495	$	1,122	$	1,185

The number of vested RSUs at December 31, 2013 and 2014 was 97,059 and 111,790, respectively. At December 31, 2014, the Company has $3,910 of unvested compensation cost related to RSUs and this cost will be recognized as expense over a weighted average period of 21 months.

Performance Stock Units

Compensation related to the PSUs is determined based on the fair value of the Company’s stock on the date of grant combined with performance metrics and is amortized to expense over the vesting period. During 2010, executives participating in the Company’s Long-Term Incentive Plan earned 244,043 PSUs based on the Company’s financial performance in 2010. Of these units, 183,961 vested in 2010 and 60,082 vested in 2012. No PSUs were earned in 2011. During 2012, executives participating in the Company’s Long-Term Incentive Plan earned 307,813 PSUs based on the Company’s financial performance in 2012. Of these units, 91,190 vested in 2012 and 84,401 vested in 2013 and 132,222 vested in 2014. During 2013, executives participating in the Company’s Long-Term Incentive Plan earned 33,405 PSUs based on the Company’s financial performance in 2013. Of these units, 9,821 vested in 2013, 13,959 vested in 2014 and 9,625 will vest in 2015. During 2014, executives participating in the Company’s Long-Term Incentive Plan earned 123,788 PSUs based on the Company’s financial performance in 2014. Of these units, 49,248 vested in 2014 and 33,910 and 40,630 will vest in 2015 and 2016, respectively. Similar to RSUs, the Company recognizes compensation expense based on the earlier of the vesting date or the date when the employee becomes eligible to retire.

The following table provides details of the nonvested PSUs earned under the Company’s Long-Term Incentive Plan:


	Number of Restricted Units			Weighted Average Grant-Date Fair Value (per share)
Nonvested at January 1, 2014		156,772		$	17.25
Earned		123,788			23.96
Vested		(196,351	)		18.64
Canceled		(3,128	)		20.14
Accrued dividend equivalents		2,434			26.82


Nonvested at December 31, 2014		83,515		$	24.11

The weighted average fair value of PSUs granted in 2012, 2013 and 2014 was $15.63, $25.43 and $23.96, respectively.

At December 31, 2014, the Company has $960 of unvested compensation cost related to PSUs and this cost will be recognized as expense over a weighted average period of 19 months.

The Company’s RSUs and PSUs are not participating securities. These units will be converted into shares of Company common stock in accordance with the distribution date indicated in the agreements. RSUs earn dividend equivalents from the time of the award until distribution is made in common shares. PSUs earn dividend equivalents from the time the units have been earned based upon Company performance metrics until distribution is made in common shares. Dividend equivalents are only earned subject to vesting of the underlying RSUs or PSUs, accordingly, such units do not represent participating securities.

The Company recognized $2,469, $494 and $1,268 of excess tax benefits on stock based compensation transactions as a financing cash inflow for the years ended December 31, 2012, 2013 and 2014, respectively.