NOTE L: STOCK-BASED COMPENSATION PLANS

The Company has a long-term incentive program for directors, officers and employees. Under this program, the Company initially authorized 4,000,000 shares of Company common stock for the grant of incentive stock options, nonqualified stock options, restricted stock awards, and retroactive stock appreciation rights. The long-term incentive program was amended effective May 25, 2011 and May 14, 2014 to authorize an additional 900,000 shares and 1,000,000 shares of Company common stock, respectively, for the grant of incentive stock options, nonqualified stock options, restricted stock awards, and retroactive stock appreciation rights. As of December 31, 2014, the Company has authorization to grant up to 1,723,456 additional shares of Company common stock for these instruments. The nonqualified (offset) stock options in its Director’s Stock Balance Plan vest and become exercisable immediately and expire one year after the date the director retires or two years in the event of death. The remaining options have a ten-year term, and vest and become exercisable on a grant-by-grant basis, ranging from immediate vesting to ratably over a five-year period.

Activity in this long-term incentive program is as follows:

	Stock Options
				Weighted-average
				Exercise Price of
	Outstanding			Shares
Outstanding at December 31, 2012		2,760,723			22.86
Granted		369,589			29.79
Exercised		(840,556	)		22.70
Forfeited		(14,865	)		24.45
Outstanding at December 31, 2013		2,274,891			24.03
Granted		281,603			37.77
Exercised		(380,265	)		23.19
Forfeited		(24,453	)		28.71
Outstanding at December 31, 2014		2,151,776			25.92
Exercisable at December 31, 2014		1,396,303		$	23.12

The following table summarizes the information about stock options outstanding under the Company’s stock option plan at December 31, 2014:

		Options outstanding						Options exercisable
Range of Exercise Price		Shares		Weighted-average Exercise Price		Weighted- average Remaining Life (years)		Shares		Weighted-average Exercise Price
$	0.00 – $18.00		163,916	$	17.60		4.15		163,916	$	17.60
$	18.001 – $23.00		629,242		19.63		3.72		579,234		19.64
$	23.001 – $28.00		433,612		25.55		4.45		355,440		25.16
$	28.001 – $29.00		304,939		28.78		7.22		145,582		28.78
$	29.001 – $30.00		342,654		29.79		8.21		108,559		29.79
$	30.001 – $40.00		277,413		37.77		9.22		43,572		37.77
TOTAL			2,151,776	$	25.92		5.82		1,396,303	$	23.12

The weighted-average remaining contractual term of outstanding and exercisable stock options at December 31, 2014 is 5.8 years and 4.7 years, respectively. The aggregate intrinsic value of outstanding and exercisable stock options at December 31, 2014 is $26.3 million and $21.0 million, respectively.

The Company recognized stock-based compensation expense related to incentive and non-qualified stock options of $2.0 million, $2.0 million and $1.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. A related income tax benefit was recognized of $0.9 million, $1.1 million and $0.8 million for the 2014, 2013 and 2012 years, respectively. Compensation expense related to restricted stock vesting recognized in the income statement for 2014, 2013 and 2012 was approximately $2.0 million, $2.0 million and $1.8 million, respectively.

Management estimated the fair value of options granted using the Black-Scholes option-pricing model. This model was originally developed to estimate the fair value of exchange-traded equity options, which (unlike employee stock options) have no vesting period or transferability restrictions. As a result, the Black-Scholes model is not necessarily a precise indicator of the value of an option, but it is commonly used for this purpose. The Black-Scholes model requires several assumptions, which management developed based on historical trends and current market observations.

	2014			2013			2012
Weighted-average Fair Value of Options Granted	$	8.38		$	6.24		$	6.40
Assumptions:
Weighted-average expected life (in years)		6.50			7.23			7.40
Future dividend yield		3.70	%		3.90	%		3.90	%
Share price volatility		30.71	%		31.21	%		31.79	%
Weighted-average risk-free interest rate		2.69	%		1.91	%		2.34	%

Unrecognized stock-based compensation expense related to non-vested stock options totaled $3.8 million at December 31, 2014, which will be recognized as expense over the next five years. The weighted-average period over which this unrecognized expense would be recognized is 2.8 years. The total fair value of stock options vested during 2014, 2013, and 2012 were $1.9 million, $2.0 million and $1.7 million, respectively.

During the 12 months ended December 31, 2014 and 2013, proceeds from stock option exercises totaled $9.4 million and $16.0 million, respectively, and the related tax benefits from exercise were approximately $1.6 million and $1.6 million, respectively. During the twelve months ended December 31, 2014 and 2013, 359,679 and 680,705 shares, respectively, were issued in connection with stock option exercises. The total intrinsic value of options exercised during 2014, 2013 and 2012 were $5.7 million, $7.9 million and $4.9 million, respectively.

A summary of the status of the Company’s unvested restricted stock awards as of December 31, 2014, and changes during the twelve months ended December 31, 2014 and 2013, is presented below:

	Restricted Shares			Weighted-average grant date fair value
Unvested at December 31, 2012		192,083			23.98
Awards		142,353			22.13
Forfeitures		(2,896	)		25.34
Vestings		(70,575	)		22.28
Unvested at December 31, 2013		260,965		$	23.42
Awards		53,518			37.77
Forfeitures		(4,329	)		29.98
Vestings		(64,433	)		24.55
Unvested at December 31, 2014		245,721		$	26.13