Share-Based Compensation Plans

Share-based incentive awards are granted to employees under the 2013 Incentive Award Plan (“2013 Plan”), which is administered by the Compensation Committee of the Board of Directors (“Compensation Committee”). Awards include stock options, restricted stock and other stock awards. The maximum number of shares of common stock that can be granted under the 2013 Plan is 33 million shares plus any shares awarded under the 2013 Plan and any prior plan that have been forfeited or have expired. Stock option awards reduce the number of shares available for grant on a one-for-one basis and all other awards reduce the number of shares available for grant by 3.5 shares for each share awarded. The terms of each award and the exercise date are determined by the Compensation Committee. The 2013 Plan does not permit the holder of an award to elect cash settlement under any circumstances. At December 31, 2016, there were 30,308,073 shares available for grant under the 2013 Plan. If all shares available for grant were for awards other than stock options, shares available for grant would be 8,659,449.

Share-based compensation expense in 2016, 2015 and 2014 was $93.4 million, $99.4 million and $93.5 million, respectively. At December 31, 2016, unamortized share-based compensation that will be expensed over the next five years is $173.2 million. We record a deferred tax asset for the share-based compensation expense recognized for financial reporting purposes that has not been deducted on our income tax return. Historically, the excess of the actual tax deduction over the deferred tax asset was recorded in additional paid-in capital. As a result of the application of ASU 2016-09, Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) (see Note 20), effective January 1, 2017, all excess tax benefits and tax deficiencies related to share-based compensation will be recognized in results of operations. The excess tax benefit or deficiency will be calculated as the difference between the grant date price and the price of our common stock on the vesting or exercise date. As a result, the effect on tax expense is dependent on the price of our common stock and it is not possible to estimate the impact of the new standard on income tax expense.

Stock Options

The exercise price of stock option awards cannot be less than 100% of the market price of our common stock on the grant date and the option term cannot exceed ten years from the grant date. Generally, stock option awards vest over three years from the grant date as follows: 30%, 30% and 40%.

Stock option activity for the three years ended December 31, 2016 was:



	2016			2015			2014
	Shares		Weighted Average Exercise Price	Shares		Weighted Average Exercise Price	Shares		Weighted Average Exercise Price
January 1	1,140,547		$28.86	1,652,140		$27.97	2,643,680		$26.39
Granted	—			—			60,000		$66.16
Exercised	(420,790	)	$30.56	(511,593	)	$25.98	(1,046,540	)	$26.19
Forfeited	—			—			(5,000	)	$23.40
December 31	719,757		$27.88	1,140,547		$28.86	1,652,140		$27.97

Exercisable December 31	695,757		$26.54	1,074,547		$26.47	1,526,140		$24.95

Options outstanding and exercisable at December 31, 2016 were:



			Options Outstanding			Options Exercisable
Exercise Price Range			Shares	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price	Shares	Weighted Average Exercise Price
$23.00	to	$24.00	647,757	2.2 years	$23.40	647,757	$23.40
$66.00	to	$71.00	72,000	7.4 years	$68.04	48,000	$68.99
			719,757			695,757

Restricted Stock

Restricted stock activity for the three years ended December 31, 2016 was:



	2016		2015		2014
January 1	4,349,105		5,040,641		6,090,697
Granted	1,100,396		1,208,964		915,922
Vested	(1,438,386	)	(1,631,343	)	(1,619,444	)
Forfeited	(209,010	)	(269,157	)	(346,534	)
December 31	3,802,105		4,349,105		5,040,641

Weighted average grant date fair value of shares granted in the period	$73.16		$64.49		$64.92

Weighted average grant date fair value at December 31	$61.72		$55.08		$50.98

Generally, restricted shares vest ratably over five years from the grant date provided the employee remains employed by us. Restricted shares may not be sold, transferred, pledged or otherwise encumbered until the forfeiture restrictions lapse. Under most circumstances, the employee forfeits the shares if employment ceases prior to the end of the restriction period.

Performance Restricted Stock Units

The Compensation Committee grants certain employees performance restricted stock units (“PRSUs”). Each PRSU represents the right to receive one share of common stock on vesting. The ultimate number of PRSUs received by the employee depends on the Company's average return on equity over a three year period compared to the average return on equity of a peer group of principal competitors over the same period. The PRSUs vest three years from the grant date. The PRSUs have a service and performance vesting condition and compensation expense is recognized on a graded-vesting basis. Over the performance period, compensation expense is adjusted upward or downward based on our estimate of the probability of achieving the performance target for the portion of the awards subject to the performance vesting condition. We have assumed that substantially all the PRSUs will vest.

PRSU activity for the three years ended December 31, 2016 was:



	2016				2015				2014
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
January 1	534,456		$	66.05	622,859		$	56.16	681,555		$	51.19
Granted	153,492		83.23		161,625		77.68		188,621		69.89
Distributed	(225,567	)	55.20		(239,387	)	48.94		(165,562	)	48.56
Forfeited	—		—		(10,641	)	48.87		(81,755	)	61.76
December 31	462,381		$	77.05	534,456		$	66.05	622,859		$	56.16

Employee Stock Purchase Plan

The employee stock purchase plan (“ESPP”) enables employees to purchase our common stock through payroll deductions over each plan quarter at 95% of the market price on the last trading day of the plan quarter. Purchases are limited to 10% of eligible compensation as defined by the Employee Retirement Income Security Act of 1974 (“ERISA”). Shares purchased by employees in 2016, 2015 and 2014 were 97,935 shares, 111,849 shares and 113,293 shares, respectively. All shares purchased were treasury stock, for which we received $7.8 million, $7.8 million and $8.0 million, respectively. At December 31, 2016, there were 8,868,299 shares available under the ESPP.