Share-Based Compensation

The Company has historically granted the majority of its share-based awards during the second quarter of each fiscal year. On May 2, 2017, shareholders approved the 2017 Omnibus Incentive Plan (2017 Plan), which made available 2.5 million shares of the Company's common stock in aggregate to be issued under any award type allowed by the 2017 Plan. In the second quarter of 2017, the Company awarded 583 restricted stock units (RSU) under the 2017 Plan to certain employees at a weighted-average grant date fair value of $54.04. The RSU vest annually over 3 years based on continued employment and are settled upon vesting in shares of the Company's common stock on a one-for-one basis. The value of an RSU grant is based on the Company's stock price on the date of grant. Additionally, in the second quarter of 2017 and 2016, respectively, 38 and 41 fully vested shares were granted to non-employee directors.

The Company also awarded 23 performance stock units (PSU) under the 2017 Plan. The PSU include performance conditions and a time-based vesting component. The final number of PSU will be determined using an adjustment factor of up to two times each PSU granted, depending on the degree of achievement of the designated performance targets. If the minimum performance thresholds are not achieved, no shares will be issued. Each PSU will convert to one share of the Company's common stock upon vesting.

RSU and PSU granted under the 2017 Plan have dividend equivalent rights, which entitle holders of RSU and PSU to the same dividend value per share as holders of common stock. Dividend equivalent rights are subject to the same vesting and other terms and conditions as the corresponding unvested RSU and PSU and are accumulated and paid in shares when the underlying awards vest.

Under the 2016 Stock Option Plan, 2,972 options were granted in the six months ended June 30, 2016, vesting over 3 years from the date of grant. The Company does not plan to grant stock options in 2017.

The grant of employee stock purchase rights and the issuance of shares under the employee stock purchase plan are made in the third quarter of each fiscal year and none were issued in the six-month periods ended June 30, 2017 and 2016.

The Company recognizes stock compensation expense based on an estimate of the fair value of awards granted to employees and directors under the Company’s omnibus incentive, stock option, director restricted stock and employee stock purchase rights plans. This expense, adjusted for expected forfeitures, is recognized in net earnings on a straight-line basis over the service periods as salaries and related costs. RSU awards to certain employees meeting specific retirement eligibility criteria at the time of grant are expensed immediately, as there is no substantive service period associated with those awards. Approximately $4 million of stock compensation expense was recognized in the three and six-month periods ended June 30, 2017 for RSU grants meeting retirement eligibility criteria.

Beginning on January 1, 2017, the Company adopted accounting guidance requiring that, prospectively, excess tax benefits and deficiencies be recorded in income tax expense for vesting of RSU, stock option exercises, cancellations and disqualifying dispositions of employee stock purchase plan shares. Also, the Company has elected to continue to estimate forfeitures expected to occur in determining compensation cost to be recognized in each period.

The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:




	Six months ended June 30,
	2016
Dividend yield	1.70		%
Volatility - stock option plans	24 - 25%
Risk free interest rates	1.31		%
Expected life (years) - stock option plans	5.50 - 6.50
Weighted average fair value of stock options granted during the period	$	9.57

Total stock compensation expense and the total related tax benefit recognized are as follows:



	Three months ended				Six months ended
	June 30,				June 30,
	2017		2016		2017		2016
Stock compensation expense	$	17,203	$	12,957	$	27,826	$	23,788
Recognized tax benefit	$	3,663	$	2,049	$	5,876	$	3,779