12.	Stock-Based Compensation Plans

Our stock-based compensation program is a broad-based program designed to attract and retain employees while also aligning employees’ interests with the interests of our shareholders. In addition, members of our Board of Directors participate in our stock-based compensation program in connection with their service on our board. In May 2016, our Board of Directors and Shareholders approved the 2016 Omnibus Incentive Plan. The 2016 Omnibus Incentive Plan supersedes the 2006 Omnibus Incentive Plan, which terminated in May 2016. The 2016 Omnibus Incentive Plan is the only remaining plan available to provide stock-based incentive compensation to our employees, directors and other eligible persons.

Under the 2016 Omnibus Incentive Plan, which terminates in May 2026, we are authorized to issue, among other things, shares of restricted and performance-based stock to eligible employees and restricted stock to directors of up to 1,100,000 shares. Shares issued under the plan that are cancelled, forfeited or expire by their terms are eligible to be granted again under the 2016 Omnibus Incentive Plan. Awards previously granted under the 2006 Omnibus Incentive Plan are not affected by the plan’s termination, while shares not yet granted under the plan are not available for future issuance.

We account for our stock-based compensation plans in accordance with the provisions of FASB ASC 718, Stock Compensation, which requires that a company measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The service period is the period of time that the grantee must provide services to us before the stock-based compensation is fully vested.

Stock-based compensation expense under our existing plans was $5.7 million ($3.6 million, net of tax) or $0.16 per basic and diluted share, $5.0 million ($3.2 million, net of tax) or $0.14 per basic and diluted share, and $4.3 million ($2.8 million, net of tax) or $0.12 per basic and diluted share for the years ended December 31, 2016, 2015 and 2014, respectively.

Restricted Stock and Performance Share Grants

We currently grant shares of restricted stock to eligible employees and our independent directors and performance-based stock to eligible employees. Selected executives and other key personnel are granted performance awards whose vesting is contingent upon meeting various performance measures with a retention feature. Performance-based shares are subject to a three year measuring period and the achievement of performance targets and, depending upon the achievement of such performance targets, they may become vested on the third anniversary of the date of grant. Each period we evaluate the probability of achieving the applicable targets and we adjust our accrual accordingly. Restricted shares granted to employees become fully vested upon the third anniversary of the date of grant; and for selected key executives certain additional restricted share grants vest 25% upon the attainment of age 60, 25% upon the attainment of age 63 and become fully vested upon the attainment of age 65. Restricted shares granted to directors become fully vested upon the first anniversary of the date of grant. Commencing with the 2015 grants, restricted and performance shares issued to certain key executives and directors are subject to a one or two year holding period upon the lapse of the three year vesting period.

Prior to the time a restricted share becomes fully vested or a performance share is issued, the awardees cannot transfer, pledge, hypothecate or encumber such shares. Prior to the time a restricted share is fully vested, the awardees have all other rights of a stockholder, including the right to vote (but not receive dividends during the vesting period). Prior to the time a performance share is issued, the awardees shall have no rights as a stockholder. All shares and rights are subject to forfeiture if certain employment conditions are not met.

Under the 2016 Omnibus Incentive Plan, 1,100,000 shares are authorized to be issued. At December 31, 2016, under the plan, there were an aggregate of (a) 212,500 shares of restricted and performance-based stock grants issued, net of forfeitures, and (b) 887,500 shares of common stock available for future grants. For the year ended December 31, 2016, 212,500 restricted and performance-based shares were granted (163,000 restricted shares and 49,500 performance-based shares).

In determining the grant date fair value, the stock price on the date of grant, as quoted on the New York Stock Exchange, was reduced by the present value of dividends expected to be paid on the shares issued and outstanding during the requisite service period, discounted at a risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the restriction or vesting period at the grant date. In addition, a further discount for the lack of marketability reduced the fair value of grants issued to certain key executives and directors subject to the one or two year post vesting holding period. Assumptions used in calculating the discount for the lack of marketability include an estimate of stock volatility, risk-free interest rate, and a dividend yield.

The fair value of the shares at the date of grant is amortized to expense ratably over the vesting period. Forfeitures on restricted stock grants are estimated at 5% for employees and 0% for executives and directors, respectively, based on evaluation of historical and expected future turnover.

As related to restricted and performance stock shares, we recorded compensation expense of $5.7 million ($3.6 million, net of tax), $5.0 million ($3.2 million, net of tax) and $4.3 million ($2.8 million, net of tax), for the years ended December 31, 2016, 2015 and 2014, respectively. The unamortized compensation expense related to our restricted and performance-based shares was $15.6 million and $12.7 million at December 31, 2016 and 2015, respectively and is expected to be recognized over a weighted average period of 5.7 years and 0.3 years for employees and directors, respectively, as of December 31, 2016 and over a weighted average period of 5.8 years and 0.3 years for employees and directors, respectively, as of December 31, 2015.

Our restricted and performance-based share activity was as follows for the years ended December 31, 2016 and 2015:

	Shares			Weighted Average Grant Date Fair Value per Share
Balance at December 31, 2014		749,018			24.62
Granted		211,950			31.79
Vested		(192,768	)		22.13
Forfeited		(9,650	)		29.30
Balance at December 31, 2015		758,550		$	27.19
Granted		212,500			42.93
Vested		(138,427	)		31.55
Forfeited		(9,775	)		31.79
Balance at December 31, 2016		822,848		$	30.46

The weighted-average grant date fair value of restricted and performance-based shares outstanding as of December 31, 2016, 2015 and 2014 was $25.1 million (or $30.46 per share), $20.6 million (or $27.19 per share), and $18.4 million (or $24.62 per share), respectively.