10. Stock-Based Compensation Plans

The Company has a stock incentive plan, the 2009 Stock Option and Incentive Plan (the "2009 Plan"). The 2009 Plan includes an authorization to issue up to 4,199,822 shares of the Company's common stock, par value $0.01 per share, (2,930,000 newly authorized shares plus 1,269,822 shares that were available for grant as of May 21, 2009 under the Company's 1994 Stock Option and Incentive Plan (the "1994 Plan")), pursuant to awards under the 2009 Plan. In addition, any awards that were outstanding under the 1994 Plan on May 21, 2009 that are subsequently forfeited, canceled, surrendered or terminated (other than by exercise) will become available for awards under the 2009 Plan. The 2009 Plan provides for various types of equity awards to associates, officers, non-employee directors and other key personnel of the Company and its subsidiaries. The types of awards that may be granted under the 2009 Plan include restricted and deferred stock, stock options that qualify as incentive stock options ("ISOs") under Section 422 of the Code, non-qualified stock options, and stock appreciation rights. The 2009 Plan will expire on May 21, 2019.

Information with respect to stock options granted under the 2009 and 1994 Plans is as follows (dollars in thousands, other than per share amounts):

			Weighted average exercise price per share				Weighted average exercise price per share

Options Outstanding, December 31, 2010	126,484		$	74.20	2,072,217		$	88.50


Exercised	(23,908	)		75.75	(930,391	)		82.43
Granted	144,827			115.83	—			—
Forfeited	—			—	(28,867	)		68.29


Options Outstanding, December 31, 2011	247,403		$	98.42	1,112,959		$	94.10


Exercised	(43,265	)		85.09	(364,519	)		68.21
Granted	115,303			133.16	—			—
Forfeited	(11,887	)		115.15	(28,610	)		139.58


Options Outstanding, December 31, 2012	307,554		$	112.67	719,830		$	105.40


Exercised	(19,949	)		84.43	(24,292	)		79.42
Granted	215,230			129.03	—			—
Forfeited	(1,267	)		131.56	(4,012	)		127.56


Options Outstanding, December 31, 2013	501,568		$	120.77	691,526		$	106.19




Options Exercisable:
December 31, 2011	30,771		$	81.54	1,012,304		$	98.62




December 31, 2012	74,618		$	97.46	719,830		$	105.40




December 31, 2013	184,167		$	107.18	691,526		$	106.19

The following summarizes the exercise prices and contractual lives of options outstanding as of December 31, 2013:

2009 Plan Number of Options	Range—Exercise Price

53,836	$70.00 - $79.99	6.1
124,414	110.00 - 119.99	7.1
75,059	120.00 - 129.99	9.2
246,760	130.00 - 139.99	8.6
1,499	140.00 - 149.99	8.5


501,568

1994 Plan Number of Options	Range—Exercise Price

88,323	$40.00 - $49.99	3.5
41,556	60.00 - 69.99	1.1
730	70.00 - 79.99	1.5
104,013	80.00 - 89.99	4.1
174,323	90.00 - 99.99	2.1
282,581	140.00 - 149.99	3.1


691,526

Options outstanding under the 2009 and 1994 Plans at December 31, 2013 had an intrinsic value of $2,669,000 and $15,424,000, respectively. Options exercisable under the 2009 and 1994 Plans at December 31, 2013 had an intrinsic value of $2,593,000 and $15,424,000, respectively. Options exercisable under the 2009 and 1994 Plans had a weighted average contractual life of 8.1 years and 3.1 years, respectively. The intrinsic value of options exercised during 2013, 2012 and 2011 was $2,395,000, $26,746,000 and $46,126,000, respectively.

The cost related to stock-based employee compensation for employee stock options included in the determination of net income is based on estimated forfeitures for the given year. Estimated forfeitures are adjusted to reflect actual forfeitures at the end of the vesting period. The following table summarizes the weighted average fair value of employee stock options for the periods shown and the associated assumptions used to calculate the value:

	2013			2012			2011

Weighted average fair value per share	$	26.78		$	29.11		$	29.40
Life of options (in years)		5.0			5.0			7.0
Dividend yield		3.7	%		3.5	%		4.0	%
Volatility		34.00	%		35.00	%		35.00	%
Risk-free interest rate		0.91	%		0.87	%		3.04	%

During 2013, the Company adopted a revised compensation framework under which share-based compensation will be granted, composed of annual awards and multiyear long term incentive performance awards. Annual awards will include restricted stock awards for which one third of the award will vest annually over a three year period following the measurement period. Under the multiyear long term incentive component of the revised framework, the Company will grant a target number of restricted stock units, with the ultimate award determined by the total shareholder return of the Company's common stock and/or operating performance metrics, measured in each case over a three-year measurement period. The share-based compensation earned will be in the form of restricted stock, or upon election of the recipient, up to 25% in the form of stock options, for which one third of the award will vest annually over a three year period following the measurement period.

At December 31, 2013 and 2012, the Company had 182,083 and 202,218, respectively, outstanding unvested shares granted under restricted stock awards. The Company issued 123,977 shares of restricted stock valued at $16,019,000 as part of its stock-based compensation plan during the year ended December 31, 2013. Restricted stock vesting during the year ended December 31, 2013 totaled 141,673 shares and had fair values at the grant date ranging from $48.60 to $149.05 per share. The total fair value of shares vested was $14,832,000, $36,337,000 and $35,029,000 for the years ended December 31, 2013, 2012 and 2011, respectively.

The Company granted 191,008 restricted stock units with an estimated aggregate compensation cost of $13,371,000, as part of its stock-based compensation plan during the year ended December 31, 2013. The Company used a Monte Carlo model to assess the compensation cost associated with the restricted stock units. The estimated compensation cost was derived using the following assumptions: baseline share value of $130.23; dividend yield of 3.3%; estimated volatility figures ranging from 17.0% to 21.0% over the life of the plan for the Company using 50% historical volatility and 50% implied volatility; and risk free rates over the life of the plan ranging from 0.09% to 0.46%; resulting in an average estimated fair value per restricted stock unit of $70.00.

Total employee stock-based compensation cost recognized in income was $17,775,000, $9,961,000 and $9,721,000 for the years ended December 31, 2013, 2012 and 2011, respectively, and total capitalized stock-based compensation cost was $8,379,000, $5,140,000 and $5,284,000 for the years ended December 31, 2013, 2012 and 2011, respectively. At December 31, 2013, there was a total of $2,674,000 and $7,889,000 in unrecognized compensation cost for unvested stock options and unvested restricted stock, respectively, which does not include estimated forfeitures. The unrecognized compensation cost for unvested stock options and restricted stock is expected to be recognized over a weighted average period of 1.8 and 2.5 years, respectively.

The Company estimates the forfeiture of stock options and recognizes compensation cost net of the estimated forfeitures. The estimated forfeitures included in compensation cost are adjusted to reflect actual forfeitures at the end of the vesting period. The forfeiture rate at December 31, 2013 was 1.4%. The application of estimated forfeitures did not materially impact compensation expense for the years ended December 31, 2013, 2012 or 2011.

Employee Stock Purchase Plan

In October 1996, the Company adopted the 1996 Non-Qualified Employee Stock Purchase Plan (as amended, the "ESPP"). Initially 1,000,000 shares of common stock were reserved for issuance under this plan. There are currently 724,675 shares remaining available for issuance under the ESPP. Full-time employees of the Company generally are eligible to participate in the ESPP if, as of the last day of the applicable election period, they have been employed by the Company for at least one month. All other employees of the Company are eligible to participate provided that, as of the applicable election period, they have been employed by the Company for 12 months. Under the ESPP, eligible employees are permitted to acquire shares of the Company's common stock through payroll deductions, subject to maximum purchase limitations. During 2013, the purchase period was a period of seven months beginning April 1 and ending October 30. The Company modified the ESPP beginning in 2014, establishing two purchase periods of approximately six months each. The first purchase period begins January 1 and ends June 10, and the second purchase period begins July 1 and ends December 10. The purchase price for common stock purchased under the plan is 85% of the lesser of the fair market value of the Company's common stock on the first day of the applicable purchase period or the last day of the applicable purchase period. The offering dates, purchase dates and duration of purchase periods may be changed, if the change is announced prior to the beginning of the affected date or purchase period. The Company issued 9,260, 6,260 and 6,972 shares and recognized compensation expense of $174,000, $127,000 and $216,000 under the ESPP for the years ended December 31, 2013, 2012 and 2011, respectively. The Company accounts for transactions under the ESPP using the fair value method prescribed by accounting guidance applicable to entities that use employee share purchase plans.