Stock Compensation Plans

12 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Compensation Plans

Note 13 - Stock Compensation Plans

Under the Company’s long-term incentive plan, the Company’s common shares have been made available for grant, at the discretion of the Compensation Committee of the Board of Directors, to officers and key employees in the form of stock option awards. Stock option awards typically have a ten-year term and generally vest in 25% increments annually beginning on the first anniversary of the date of grant. In addition to stock option awards, the Company has granted restricted shares, deferred shares, performance-based restricted stock units and time-vested restricted stock units under the long-term incentive plan.

During 2016, 2015 and 2014, the Company recognized stock-based compensation expense of $5.9 million ($3.7 million after tax or $0.05 per diluted share), $6.6 million ($4.1 million after tax or $0.05 per diluted share) and $13.7 million ($8.5 million after tax or $0.09 per diluted share), respectively, for stock option awards.

The fair value of stock option awards granted during 2016, 2015 and 2014 was estimated at the date of grant using a Black-Scholes option-pricing method with the following assumptions:

	2016			2015			2014
Weighted-average fair value per option (Pre-Spinoff for 2014)	$	6.49		$	11.67		$	23.09
Risk-free interest rate	1.22		%	1.58		%	1.64		%
Dividend yield	3.04		%	2.29		%	1.75		%
Expected stock volatility	34.12		%	36.53		%	50.96		%
Expected life - years	5			5			5

Historical information was the primary basis for the selection of the expected dividend yield, expected volatility and the expected lives of the options. The dividend yield was calculated based upon the last dividend prior to the grant compared to the trailing 12 months' daily stock prices. The risk-free interest rate was based upon yields of U.S. zero coupon issues with a term equal to the expected life of the option being valued. Forfeitures were estimated at 2.3%.

A summary of stock option award activity for the year ended December 31, 2016 is presented below:

	Number of Shares		Weighted-average Exercise Price		Weighted-average Remaining Contractual Term	Aggregate Intrinsic Value (millions)
Outstanding - beginning of year	3,279,868		$	35.60
Granted - new awards	733,580		27.75
Exercised	(152,720	)	26.89
Canceled or expired	(77,231	)	36.55
Outstanding - end of year	3,783,497		$	34.41	6 years	$	22.2
Options expected to vest	3,751,006		$	34.41	6 years	$	22.0
Options exercisable	2,370,847		$	34.38	5 years	$	13.6

The total intrinsic value of stock option awards exercised during the years ended December 31, 2016, 2015 and 2014 was $1.7 million, $5.6 million and $21.5 million, respectively. Net cash proceeds from the exercise of stock option awards were $4.3 million, $4.1 million and $16.8 million, respectively. Income taxes were a shortfall of $0.3 million for the year ended December 31, 2016. Income tax benefits were $1.3 million and $5.9 million for the years ended December 31, 2015 and 2014, respectively.

In 2016, the Company issued 368,815 performance-based restricted stock units and 265,930 time-based restricted stock units to officers and key employees. The performance-based restricted stock units are calculated and awarded based on the achievement of specified performance objectives and vest three years from the date of grant. The performance-based restricted stock units settle in either cash or shares, with 10,880 shares expected to settle in cash and 357,935 expected to settle in common shares. Time-vesting restricted stock units vest in 25% increments annually beginning on the first anniversary of the grant or vest five years from the date of grant. Time-based restricted stock units also settle in either cash or shares, with 10,700 time-based restricted stock units expected to settle in cash and 255,230 time-based restricted stock units expected to settle in common shares. For time-based restricted stock units that are expected to settle in cash, the Company had $1.2 million and $6.1 million, accrued in salaries, wages and benefits as of December 31, 2016 and 2015, respectively, on the Consolidated Balance Sheets.

A summary of stock award activity, including restricted shares, deferred shares, performance-based restricted stock units and time-based restricted stock units that will settle in common shares, for the year ended December 31, 2016 is as follows:

	Number of Shares		Weighted-average Grant Date Fair Value
Outstanding - beginning of year	1,014,770		$	40.69
Granted - new awards	613,165		28.21
Vested	(188,383	)	41.48
Canceled or expired	(90,377	)	39.92
Outstanding - end of year	1,349,175		$	34.96

As of December 31, 2016, a total of 1,349,175 stock awards have been awarded that have not yet vested. The Company distributed 188,383, 103,953 and 171,135 shares in 2016, 2015 and 2014, respectively, due to the vesting of stock awards. The shares awarded in 2016, 2015 and 2014 totaled 613,165, 485,975 and 520,912, respectively. The Company recognized compensation expense of $8.2 million, $11.8 million and $10.1 million, for the years ended December 31, 2016, 2015 and 2014, respectively, relating to restricted share activity.

As of December 31, 2016, the Company had unrecognized compensation expense of $24.1 million related to stock options and stock awards. The unrecognized compensation expense is expected to be recognized over a total weighted-average period of two years. The number of shares available for future grants for all plans at December 31, 2016 was 6,238,995.