Common Shares and Preferred Shares

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Common Shares and Preferred Shares [Text Block]

Common Shares and Preferred Shares

Preferred Shares--We have authorized a class of 4,000,000 preferred shares, no par value, of which none were issued.

Common Shares--The number of common shares authorized is 48,000,000, par value $1.00. The number of common shares issued during each of the three years in the period ended December 31, 2016 was 21,456,880. The number of shares in the treasury for each of the three years in the period ended December 31, 2016 was as follows: 2016--8,995,310; 2015--8,713,566; and 2014--8,291,947.

Our common shares are not listed or traded on an established public trading market, and market prices are, therefore, not available. Semiannually, an independent stock valuation firm determines the fair market value of our common shares based upon our performance and financial condition. Since 1979, we have provided a ready market for all shareholders through our direct purchase of their common shares, although we are under no obligation to do so. During 2016, purchases of common shares totaled 746,041 shares for $25,290 in cash; we also had direct sales to directors and employees of 12,121 shares for $397, excluding those shares issued through either the exercise of options or the Employee Stock Purchase Plan. We also sold 44,986 shares to our 401(k) plan for $1,488and issued 103,154 shares to participant accounts to satisfy our liability for the

L. Common Shares and Preferred Shares (continued)

2015 employer match in the amount of $3,373. The liability accrued at December 31, 2016 for the 2016 employer match was $3,661. There were also 148,631 shares purchased during 2016 under the Employee Stock Purchase Plan.

Common Shares Outstanding--The table below reconciles the activity of the common shares outstanding:

	December 31,
	2016		2015
Shares outstanding, beginning of year	12,743,314		13,164,933
Shares purchased	(746,041	)	(823,827	)
Shares sold	308,892		287,875
Stock subscription offering, employee cash purchases	24,365		43,071
Options exercised	131,040		71,262
	(281,744	)	(421,619	)
Shares outstanding, end of year	12,461,570		12,743,314

On December 31, 2016, we had 12,461,570 common shares outstanding, employee options exercisable to purchase 375,448 common shares, partially-paid subscription for 416,720 common shares and purchase rights outstanding for 169,191 common shares.

Stock Subscription Offering--Beginning May 2012, the Company offered to eligible employees and nonemployee directors the right to subscribe to common shares of the Company at $19.70 per share in accordance with the provisions of The Davey Tree Expert Company 2004 Omnibus Stock Plan and the rules of the Compensation Committee of the Company's Board of Directors (collectively, the "plan"). The offering period ended on August 1, 2012 and resulted in the subscription of 637,714 common shares for $12,563 at $19.70 per share.

Under the plan, a participant in the offering purchasing common shares for an aggregate purchase price of less than $5 had to pay with cash. All participants (excluding Company directors and officers) purchasing $5 or more of the common shares had an option to finance their purchase through a down-payment of at least 10% of the total purchase price and a seven-year promissory note for the balance due with interest at 2%. Payments on the promissory note can be made either by payroll deductions or annual lump-sum payments of both principal and interest.

Common shares purchased under the plan have been pledged as security for the payment of the promissory note and the common shares will not be issued until the promissory note is paid-in-full. Dividends will be paid on all subscribed shares, subject to forfeiture to the extent that payment is not ultimately made for the shares.

All participants in the offering purchasing in excess of $5 of common shares were granted a "right" to purchase one additional common share at a price of $19.70 per share for every three common shares purchased under the plan. As a result of the stock subscription, employees were granted rights to purchase 211,800 common shares. Each right may be exercised at the rate of one-seventh per year and will expire seven years after the date that the right was granted. Employees may not exercise a right should they cease to be employed by the Company.