10.	STOCK-BASED COMPENSATION PLANS

As the primary operating subsidiary of the Company, the Operating Partnership participates in and bears the compensation expenses associated with the Company’s stock-based compensation plans. The information discussed below relating to the Company’s stock-based compensation plans is also applicable for the Operating Partnership.

Incentive stock plans

Incentive stock awards are granted under the Company’s 2003 Incentive Stock Plan, as amended and restated in October 2008 (the “2003 Stock Plan”). Under the 2003 Stock Plan, an aggregate of 3,469 shares of common stock were reserved for issuance. Of this amount, stock grants count against the total shares available under the 2003 Stock Plan as 2.7 shares for every one share issued, while options (and stock appreciation rights (“SAR”) settled in shares) count against the total shares available as one share for every one share issued on the exercise of an option (or SAR). The exercise price of each option granted under the 2003 Stock Plan may not be less than the market price of the Company’s common stock on the date of the option grant and all options may have a maximum life of ten years. Participants receiving restricted stock grants are generally eligible to vote such shares and receive dividends on such shares. Substantially all stock option and restricted stock grants are subject to annual vesting provisions (generally three years) as determined by the compensation committee overseeing the 2003 Stock Plan.

Compensation costs for stock options have been estimated on the grant date using the Black-Scholes option-pricing method. The weighted average assumptions used in the Black-Scholes option-pricing model are as follows:

	Year ended December 31,
	2015		2014		2013
Dividend yield		2.7%		2.8%		2.0%
Expected volatility		42.8%		43.0%		43.1%
Risk-free interest rate		1.4%		1.8%		1.1%
Expected option term (years)	6.0 years		6.0 years		6.0 years

The Company’s assumptions were derived from the methodologies discussed herein. The expected dividend yield reflects the Company’s current historical yield, which was expected to approximate the future yield. Expected volatility was based on the historical volatility of the Company’s common stock. The risk-free interest rate for the expected life of the options was based on the implied yields on the U.S. Treasury yield curve. The weighted average expected option term was based on the Company’s historical data for prior period stock option exercise and forfeiture activity.

Restricted stock

Compensation cost for restricted stock is amortized ratably into compensation expense over the applicable vesting periods. Total compensation expense related to restricted stock was $4,111, $3,165 and $3,020 in 2015, 2014 and 2013, respectively. At December 31, 2015, there was $3,624 of unrecognized compensation cost related to restricted stock. This cost is expected to be recognized over a weighted average period of 1.8 years. The total value of restricted shares vested in 2015, 2014 and 2013 was $4,448, $3,670 and $2,933, respectively.

A summary of the activity related to the Company’s restricted stock for the years ended December 31, 2015, 2014 and 2013 is as follows:

	Year ended December 31,
	2015					2014					2013
				Weighted-Avg.					Weighted-Avg.					Weighted-Avg.
				Grant-Date					Grant-Date					Grant-Date
	Shares			Fair Value		Shares			Fair Value		Shares			Fair Value
Unvested shares, beginning of period		76		$	49		75		$	48		65		$	42
Granted (1)		77			60		63			48		75			50
Vested		(75	)		53		(62	)		47		(64	)		44
Forfeited		-			-		-			-		(1	)		50
Unvested shares, end of period		78			56		76			49		75			48

(1)	The total value of the restricted share grants in 2015, 2014 and 2013 was $4,663, $3,038 and $3,743.

Stock options

Compensation cost for stock options is amortized ratably into compensation expense over the applicable vesting periods. In 2015, 2014 and 2013, the Company recorded compensation expense related to stock options of $509, $507 and $463, respectively, recognized under the fair value method. At December 31, 2015, there was $506 of unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted average period of 1.7 years.

A summary of stock option activity under all plans in 2015, 2014 and 2013, is presented below:

	Year ended December 31,
	2015					2014					2013
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Options outstanding, beginning of period		148		$	46		539		$	36		685		$	34
Granted		28			60		35			47		29			50
Exercised		(43	)		47		(426	)		33		(174	)		29
Forfeited		-			-		-			-		(1	)		50
Options outstanding, end of period (1)		133			49		148			46		539			36
Options exercisable, end of period (1)		72			46		86			46		486			35
Options vested and expected to vest, end of period (1)		130			49		145			46		536			36
Weighted average fair value of options granted during the period	$	19.49				$	15.21				$	17.26

(1)

At December 31, 2015, the aggregate intrinsic value of stock options outstanding, exercisable and vested/expected to vest was $1,351, $986 and $1,332, respectively. At that same date, the weighted average remaining contractual lives of stock options outstanding, exercisable and vested/expected to vest was 6.8 years, 5.4 years and 6.8 years, respectively.

Upon the exercise of stock options, the Company issues shares of common stock from treasury shares or, to the extent treasury shares are not available, from authorized common shares. The total intrinsic value of stock options exercised in 2015, 2014 and 2013 and was $634, $8,677 and $2,808, respectively.

At December 31, 2015, the Company segregated its outstanding options into two ranges, based on exercise prices, as follows:

Option Ranges	Options Outstanding						Options Exercisable
	Shares		Weighted Avg. Exercise Price		Weighted Avg. Life (Years)		Shares		Weighted Avg. Exercise Price
$37.04 - $46.93		75	$	45		6.2		51	$	44
$48.00 - $60.40		58		55		7.5		21		50
Total		133		49		6.8		72		46

Employee stock purchase plan

The Company maintains an Employee Stock Purchase Plan (the “ESPP”) approved by Company shareholders. The purchase price of shares of common stock under the ESPP is equal to 85% of the lesser of the closing price per share of common stock on the first or last day of the trading period, as defined. The Company records the aggregate cost of the ESPP (generally the 15% discount on the share purchases) as a period expense. Total compensation expense relating to the ESPP was $178, $328 and $164 in 2015, 2014 and 2013, respectively.