

10.	Share-Based Compensation

Stock Incentive Plans

At December 31, 2016, there were stock options, non-vested shares and restricted stock units outstanding under our existing stock incentive plans. At December 31, 2016, we maintained two plans: the 2006 Equity Incentive Plan (“2006 Plan”) and the 2015 Equity Incentive Plan ("2015 Plan"). Pursuant to the 2015 Plan, new options and other stock awards may only be granted under the 2015 Plan. In addition, any shares that are forfeited, canceled, expired or settled in cash under the 2006 Plan will not be available for issuance under the 2006 Plan nor the 2015 Plan. The number of shares of common stock remaining



10.	Share-Based Compensation, continued

available for future issuance under the 2015 Plan may increase by any shares of common stock underlying prior outstanding options that expire, are forfeited, canceled or terminate for any reason without having been exercised in full. The number of shares available for issuance at December 31, 2016 was 2,761,369. Outstanding options, non-vested shares and restricted stock units granted under our plans typically vest over periods that range from three to four years, and outstanding options typically expire between five and ten years from the date of grant.

Stock Options

A summary of our stock option activity for 2016 and 2015 is as follows (in thousands, except weighted-average exercise price and weighted-average remaining contractual term):



	Stock Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2014	845		$	17.54
Granted	—		$	—
Exercised	(166	)	$	16.13
Expired	—		$	—
Forfeited/Canceled	(11	)	$	15.98
Outstanding at December 31, 2015	668		$	17.91	1.7	$	24,768
Granted	—		$	—
Exercised	(225	)	$	17.66
Expired	—		$	—
Forfeited/Canceled	—		$	—
Outstanding at December 31, 2016	443		$	18.05	0.9	$	22,430
Exercisable at December 31, 2016	443		$	18.05	0.9	$	22,430
Vested and expected to vest at December 31, 2016	443		$	18.05	0.9	$	22,430

There were no stock options granted during 2016, 2015 and 2014. The aggregate intrinsic value of our stock options exercised during 2016, 2015 and 2014 was $11.2 million, $6.4 million and $4.6 million, respectively. The actual tax benefit

realized on options exercised during 2016, 2015 and 2014 was $4.4 million, $2.5 million and $1.8 million, respectively. The total fair value of options vested during 2016, 2015 and 2014 was $0.6 million, $1.8 million and $1.8 million, respectively.

The following table summarizes information about the options outstanding at December 31, 2016 (in thousands, except per share amounts and the weighted-average remaining contractual life):



Options Outstanding				Options Exercisable
Exercise Price	Outstanding	Weighted-Avg. Remaining Contractual Life	Weighted-Avg. Exercise Price	Exercisable	Weighted-Avg. Exercise Price
$15.98 - $18.94	443,245	0.9	$18.05	443,245	$18.05

At December 31, 2016, we have fully recognized compensation cost for our outstanding options.

Calculation of Fair Value

The fair value of our options is estimated on the date of grant using the Black-Scholes option pricing model. We amortize the fair value of our options on a straight-line basis, net of estimated forfeitures, over the requisite service period. There were no options granted during 2016, 2015 and 2014.



10.	Share-Based Compensation, continued

We use historical data to estimate pre-vesting option forfeitures. We recognize share-based compensation only for those awards that we expect to vest.

The compensation cost charged against income for stock options was $0.4 million, $1.3 million and $1.6 million for 2016, 2015 and 2014, respectively. The corresponding income tax benefit recognized in the income statement was $0.2 million, $0.5 million and $0.6 million for 2016, 2015 and 2014, respectively.

Non-Vested Shares

Additionally, under the 2006 and 2015 Equity Incentive Plans, we have issued non-vested stock awards in our common stock to certain employees and members of our Board of Directors. The outstanding non-vested stock awards to employees and executives generally vest in three or four equal annual installments starting with the first anniversary of the grant date. The non-vested stock awards to members of our Board of Directors generally vest in equal annual installments over three years from the date of grant. A summary of our non-vested stock activity for 2016 and 2015 is as follows (in thousands, except weighted-average fair value per share):



	Shares		Grant Date Weighted- Average Fair Value Per Share
Outstanding at December 31, 2014	822		$	25.77
Granted	131		$	53.76
Vested	(484	)	$	22.40
Forfeited/Canceled	(52	)	$	26.77
Outstanding at December 31, 2015	417		$	38.28
Granted	136		$	68.10
Vested	(195	)	$	31.59
Forfeited/Canceled	(9	)	$	43.05
Outstanding at December 31, 2016	349		$	53.48

During 2016, we granted 135,619 shares of non-vested common stock. Of these awards, 130,627 shares were granted to employees and 4,992 shares were granted to our non-employee directors. The awards to employees will vest in equal annual installments over four years. The shares awarded to our non-employee directors will vest in three equal annual installments.

Total compensation expense related to non-vested stock awards was $7.0 million, $6.0 million and $7.5 million in 2016, 2015 and 2014, respectively. The corresponding income tax benefit recognized in the income statement was $2.8 million, $2.3 million and $2.9 million for 2016, 2015 and 2014, respectively. As of December 31, 2016, there was $17.4 million of unrecognized compensation cost related to these non-vested shares that will be recognized over a weighted-average period of 2.9 years.

Restricted Stock Units

Pursuant to the terms of the 2006 and 2015 Equity Incentive Plans, we have also granted performance-based restricted stock units ("RSUs") to our executive and non executive officers representing the right to receive one share of common stock. These RSUs will be earned upon achievement of the applicable performance criteria during a three year performance period from the date of grant and in accordance with the specific equity performance award agreement they were issued from. Assuming achievement of the required performance conditions and continued service through each vesting date, these awards will generally vest in equal annual installments over four years from the date of grant.



10.	Share-Based Compensation, continued

A summary of our RSU award activities for 2016 and 2015 is as follows (in thousands, except weighted-average fair value per share):



	Units		Grant Date Weighted- Average Fair Value Per Unit
Outstanding at December 31, 2014	685		$	29.60
Granted	250		$	50.37
Vested/Paid out	(261	)	$	26.15
Performance Share Units Adjustment ⁽¹⁾	73		$	27.78
Forfeited/Canceled	—		$	—
Outstanding at December 31, 2015	747		$	37.91
Granted	230		$	55.96
Vested/Paid out	(305	)	$	31.39
Forfeited/Canceled	(2	)	$	21.04
Outstanding at December 31, 2016	670		$	47.11

____________________________


⁽¹⁾	The Performance Share Units Adjustment represent the difference of restricted stock units earned above or below the units that were initially granted and what were actually earned at the end of each performance period.

Share-based compensation expense related to performance-based restricted stock units reflects the estimated probable outcome at each performance period. Upon completion of the performance period, the actual number of restricted stock units earned are determined and are subject to further vesting. Total compensation cost charged against income related to RSU awards was $11.3 million, $9.0 million and $8.1 million for 2016, 2015 and 2014, respectively. The corresponding income tax benefit recognized in the income statement was $4.4 million, $3.5 million and $3.2 million for 2016, 2015 and 2014, respectively. As of December 31, 2016, there was $17.6 million of total unrecognized compensation cost related to our RSU awards. This cost is expected to be recognized over a weighted-average period of over 3.3 years.

During the year ended December 31, 2016, we granted 229,590 performance based RSUs to our executive and non executive officers representing the right to receive on share of common stock. These RSUs will be earned upon the achievement of applicable performance criteria during the performance periods, from fiscal period 2016 to 2019, as set forth in the 2016 equity performance award agreements. Assuming achievement of the required performance conditions and continued service through each vesting date, these awards will further vest in four equal annual installments on the later of the certification of the applicable results or the annual anniversary of the grant date.