Annual report pursuant to Section 13 and 15(d)

Shareholder's Equity, Stock Options and Net Income per Share (Notes)

v2.4.1.9
Shareholder's Equity, Stock Options and Net Income per Share (Notes)
 12 Months Ended
Dec. 31, 2014
Shareholders’ Equity, Stock Options and Net Income per Share [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]
Shareholders' Equity, Stock Options and Net Income per Share
 
Preferred Stock

There are 5,000,000 shares of preferred stock with a par value of $0.01 authorized, but no shares have been issued to date.    

Cash Dividends

During each quarter of 2014 , the Company’s Board of Directors declared a cash dividend of $0.12 per share of Common Stock. During each quarter of 2013 and the third and fourth quarter of 2012, the Company's Board of Directors declared a cash dividend of $0.10 per share of Common Stock. During the first and second quarter of 2012, the Company's Board of Directors declared a cash dividend of $0.07 per share of Common Stock. On February 10, 2015, the Company’s Board of Directors declared a $0.12 per share dividend that will be paid in the first quarter of 2015. The Company expects to continue to pay regular quarterly cash dividends, though each subsequent quarterly dividend is subject to review and approval by the Board of Directors.

Repurchase of Common Stock
In July 2007, our Board of Directors approved a stock repurchase program (“Repurchase Plan”) for up to 2,000,000 shares of our common stock. During the year ended December 31, 2013, we repurchased 8,675 shares of common stock under the Repurchase Plan for $354, or $40.84 per share. No shares were repurchased during the year ended December 31, 2012.

Also, on February 7, 2014, our Board of Directors approved a stock repurchase authorization for up to 2,000,000 shares of the Company’s common stock. In connection with this action, the board cancelled the Company’s Repurchase Plan. During the year ended December 31, 2014, we repurchased 881,979 shares of common stock for $39,972, or $45.32 per share. As of December 31, 2014, 1,118,021 shares remain that may be repurchased.

Share-Based Compensation

The Company had previously reserved for issuance 4,500,000 common shares under the 1999 Stock Option and Incentive Plan (the “1999 Plan”). Options issued under the 1999 Plan have seven to ten-year terms and vested over a one to five year period.

In May 2008, with the approval of shareholders, the Company amended and restated the 1999 Stock Option and Incentive Plan (the “1999 Amended Plan”) to reserve for issuance an additional 3,000,000 common shares, increasing the total number of reserved common shares under the 1999 Amended Plan to 7,500,000. As of December 31, 2014, there were approximately 746,000 shares remaining available for grant.

Employee Activity - Options

The following tables summarize the Company’s employee stock option activity and related information for the years ended December 31, 2014, 2013 and 2012:

 
2014
 
2013
 
2012
 
 
 
Weighted-
 
 
 
Weighted-
 
 
 
Weighted-
 
 
 
Average
 
 
 
Average
 
 
 
Average
 
Options
 
Exercise
 
Options
 
Exercise
 
Options
 
Exercise
 
(000)
 
Price
 
(000)
 
Price
 
(000)
 
Price
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at beginning of year
1,732

 
$
27

 
2,874

 
$
26

 
3,363

 
$
26

Granted
106

 
43

 
118

 
38

 
94

 
37

Exercised
(450
)
 
28

 
(1,260
)
 
26

 
(570
)
 
27

Forfeited
(25
)
 
37

 
—

 
—

 
(13
)
 
29

Outstanding at end of year
1,363

 
$
28

 
1,732

 
$
27

 
2,874

 
$
26

Exercisable at end of year
1,160

 
$
26

 
1,514

 
$
26

 
2,487

 
$
26

Weighted-average fair value of options granted during the year
$
14

 
 
 
$
14

 
 
 
$
13

 
 
Aggregate intrinsic value for options exercised
$
7,259

 
 
 
$
15,477

 
 
 
$
3,924

 
 
Average aggregate intrinsic value for options outstanding
$
24,425

 
 
 
 
 
 
 
 
 
 
Average aggregate intrinsic value for exercisable options
$
23,274

 
 
 
 
 
 
 
 
 
 











Outstanding



Exercisable






Weighted-

Weighted-



Weighted-
Range of

Number

Average

Average

Number

Average
Exercise

Outstanding

Remaining

Exercise

Exercisable

Exercise
Price

(000)

Contractual Life

Price

(000)

Price
$
22.47

-
24.98

 
672

 
1.7
 
$
22.66

 
672

 
$
22.66

28.61

-
29.44

 
401

 
0.9
 
28.95

 
401

 
28.95

36.55

-
41.80

 
184

 
4.7
 
37.03

 
87

 
36.90

42.48

-
45.97

 
106

 
6.2
 
43.17

 
—

 
—

$
22.47

-
45.97

 
1,363

 
2.2
 
$
28.05

 
1,160

 
$
25.91


    
Year ended

December 31,
2014

December 31,
2013

December 31,
2012
Shared-based compensation for options
$
1,302


$
1,410


$
2,585

Tax benefit for option compensation
$
497


$
508


$
713

Unrecognized compensation cost for options, net of estimated forfeitures
$
1,632









Employee Activity – Non-vested shares
 
Non-vested share grants to employees vest ratably over a three-year period. The following tables summarize the Company's employee non-vested share activity and related information:


Year ended

2014

2013

2012



Weighted-



Weighted-



Weighted-

Non-vested

Average

Non-vested

Average

Non-vested

Average

Shares

Grant Date

Shares

Grant Date

Shares

Grant Date

(000)

Fair Value

(000)

Fair Value

(000)

Fair Value












Outstanding and non-vested at beginning of year
186


$
35


168


$
33


108


$
29

Granted
99


42


98


37


103


37

Vested
(94
)

43


(68
)

37


(36
)

29

Forfeited
(1
)

37


(12
)

36


(7
)

33

Outstanding and non-vested at end of year
190


$
40


186


$
35


168


$
33

Aggregate grant date fair value
$
7,585




$
6,588




$
5,579



Total fair value of shares vested during the year
$
4,008




$
2,503




$
1,249





Year ended

December 31,
2014

December 31,
2013

December 31,
2012
Shared-based compensation for non-vested shares
$
3,626


$
3,058


$
2,039

Tax benefit for non-vested share compensation
$
1,385


$
1,165


$
785

Unrecognized compensation cost for non-vested shares, net of estimated forfeitures
$
4,325








Employee Activity – Performance shares

In 2014, 2013 and 2012, the Company granted performance shares to key employees. Under the terms of the performance share agreements, on the third anniversary of the grant date, the Company will issue to the employees a calculated number of common stock shares based on the three year performance of the Company's common stock share price as compared to the share price performance of a selected peer group. No shares may be issued if the Company share price performance outperforms 30% or less of the peer group, but the number of shares issued may be doubled if the Company share price performs better than 90% of the peer group.

The following tables summarize the Company's employee performance share activity, assuming median share awards, and related information:
Year ended

2014

2013

2012



Weighted-



Weighted-



Weighted-

Non-vested

Average

Non-vested

Average

Non-vested

Average

Shares

Grant Date

Shares

Grant Date

Shares

Grant Date

(000)

Fair Value

(000)

Fair Value

(000)

Fair Value












Outstanding and non-vested at beginning of year
88


$
37


62


$
36


38


$
30

Granted
23


48


26


40


24


45

Additional shares awarded based on performance
19


30


—


—


—


—

Vested
(56
)

30


—


—


—


—

Forfeited
—


—


—


—


—


—

Outstanding and non-vested at end of year
74


$
44


88


$
37


62


$
36

Aggregate grant date fair value
$
3,279




$
3,278




$
2,205





Year ended

December 31,
2014

December 31,
2013

December 31,
2012
Shared-based compensation for performance shares
$
1,098


$
1,055


$
699

Tax benefit for performance share compensation
$
419


$
402


$
269

Unrecognized compensation cost for performance shares, net of estimated forfeitures
$
1,225









Employee Activity – Employee Stock Purchase Plan

Under the ESPP at December 31, 2014, the Company is authorized to issue up to a remaining 403,792 shares of Common Stock to employees of the Company. For the years ended December 31, 2014, 2013 and 2012, participants under the plan purchased 8,530, 8,800, and 8,846 shares, respectively, at an average price of $41.51, $33.68, and $29.26 per share, respectively. The weighted-average fair value of each purchase right under the ESPP granted for the years ended December 31, 2014, 2013 and 2012, which is equal to the discount from the market value of the Common Stock at the end of each six month purchase period, was $7.74, $7.52, and $4.47 per share, respectively. Share-based compensation expense of $66, $66, and $40 was recognized in salaries, wages and employee benefits, during the years ended December 31, 2014, 2013 and 2012, respectively.

Non-employee Directors – Non-vested shares
 
On May 23, 2006, the Company’s shareholders approved the Company’s 2006 Non-Employee Director Stock Plan (the “2006 Plan”).  The Company’s shareholders then approved the Company’s Amended and Restated Non-Employee Director Stock Plan (the “Amended Plan”) on May 22, 2007.  The Amended Plan was then further amended and restated on December 17, 2008.  Under the Amended Plan, on the first business day after each Annual Meeting of Shareholders, each non-employee director will automatically be granted an award (the “Annual Grant”), in such form and size as the Board determines from year to year.  Unless otherwise determined by the Board, Annual Grants will become vested and nonforfeitable one year after the date of grant so long as the non-employee director’s service with the Company does not earlier terminate.  Each director may elect to defer receipt of the shares under a non-vested share award until the director terminates service on the Board of Directors.  If a director elects to defer receipt, the Company will issue deferred stock units to the director, which do not represent actual ownership
in shares and the director will not have voting rights or other incidents of ownership until the shares are issued.  However, the Company will credit the director with dividend equivalent payments in the form of additional deferred stock units for each cash dividend payment made by the Company.
  
The following tables summarize the Company's non-employee non-vested share activity and related information:
Year ended

2014

2013

2012

Non-vested



Non-vested



Non-vested



Shares and

Weighted-

Shares and

Weighted-

Shares and

Weighted-

Deferred

Average

Deferred

Average

Deferred

Average

Stock Units

Grant Date

Stock Units

Grant Date

Stock Units

Grant Date

(000)

Fair Value

(000)

Fair Value

(000)

Fair Value












Outstanding and non-vested at beginning of year
15


$
38


20


$
32


24


$
33

Granted
15


44


15


38


20


32

Vested
(15
)

38


(20
)

32


(24
)

32

Forfeited
—


—


—


—


—


—

Outstanding and non-vested at end of year
15


$
44


15


$
38


20


$
32

Aggregate grant date fair value
$
650




$
560




$
640



Total fair value of shares vested during the year
$
632




$
762




$
752



    
Year ended

December 31,
2014

December 31,
2013

December 31,
2012
Shared-based compensation for non-vested shares
$
589


$
589


$
687

Tax benefit for non-vested share compensation
$
225


$
225


$
264

Unrecognized compensation cost for non-vested shares, net of estimated forfeitures
$
256








Non-employee Directors - Options
 
In addition to the above activity, each May from 1995 to 2005, options were granted to the non-employee directors of the Company.  The options have terms of ten years and are fully exercisable.  The following table summarizes the Company’s non-employee stock option activity and related information for the years ended December 31, 2014, 2013 and 2012:
 
2014
 
2013
 
2012
 
 
 
Weighted-
 
 
 
Weighted-
 
 
 
Weighted-
 
 
 
Average
 
 
 
Average
 
 
 
Average
 
Options
 
Exercise
 
Options
 
Exercise
 
Options
 
Exercise
 
(000)
 
Price
 
(000)
 
Price
 
(000)
 
Price
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at beginning of year
26

 
$
23

 
29

 
$
23

 
41

 
$
21

Granted
—

 
—

 
—

 
—

 
—

 
—

Exercised
(18
)
 
22

 
(3
)
 
20

 
(12
)
 
16

Forfeited
—

 
—

 
—

 
—

 
—

 
—

Outstanding and exercisable at end of year
8

 
$
26

 
26

 
$
23

 
29

 
$
23

Aggregate intrinsic value for options exercised
$
412

 
 
 
$
54

 
 
 
$
207

 
 
Average aggregate intrinsic value for options outstanding and exercisable
$
151

 
 
 
 
 
 
 
 
 
 


At December 31, 2014, weighted average remaining contractual term for these options was 0.4 years.   

Net Income per Share

The following table sets forth the computation of net income per basic and diluted share:
 
2014

2013

2012
Numerator:





Net income and comprehensive income
$
61,169


$
54,467


$
52,668

Income allocated to participating securities
(404
)
 
—

 
—

Numerator for net income and comprehensive income to common shareholders
60,765

 
54,467

 
52,668







Denominator:





Denominator for basic net income per share - weighted-average shares (in thousands)
30,599


30,135


28,967

Effect of dilutive stock options (in thousands)
431

 
615

 
528

Effect of dilutive performance shares (in thousands)
42

 
12

 
41

Denominator for diluted net income per share - adjusted weighted-average shares (in thousands)
31,072


30,762


29,536

Basic net income per share
$
1.99


$
1.81


$
1.82

Diluted net income per share
$
1.96


$
1.77


$
1.78



The number of instruments that could potentially dilute net income per basic share in the future, but that were not included in the computation of net income per diluted share because to do so would have been anti-dilutive for the periods presented, are as follows:

 
2014
 
2013
 
2012
Anti-dilutive stock options (in thousands)
99

 
192

 
226

Anti-dilutive performance shares (in thousands)
—

 
—

 
22

Total anti-dilutive shares (in thousands)
99

 
192

 
248