Annual report pursuant to Section 13 and 15(d)

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

v3.8.0.1
Shareholder's Equity, Stock Options and Net Income per Share (Notes)
 12 Months Ended
Dec. 31, 2017
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 2017 and the fourth quarter of 2016, the Company’s Board of Directors declared a cash dividend of $0.15 per share of Common Stock. During the first, second and third quarters of 2016 and each quarter of 2015, the Company's Board of Directors declared a cash dividend of $0.12 per share of Common Stock. On February 6, 2018, the Company’s Board of Directors declared a $0.15 per share dividend that will be paid in the first quarter of 2018. 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
On July 21, 2016, our Board of Directors approved a stock repurchase plan that authorized the repurchase of up to 3,000,000 shares of the Company's Common Stock. Under the 2016 repurchase plan, during the year ended December 31, 2017, we repurchased 947,819 shares of Common Stock for $48,983, or $51.68 per share. As of December 31, 2017, 1,818,665 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”). 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. Options issued under these plans have seven to ten-year terms and vested over a one to five year period.

In May 2016, with the approval of shareholders, the Company adopted the 2016 Omnibus Incentive Compensation Plan (the “Omnibus Plan”) to reserve for issuance 2,000,000 common shares. With the adoption of the Omnibus Plan, no further awards will be issued under the 1999 Amended Plan. As of December 31, 2017, there were approximately 1,691,567 shares remaining available for grant under the Omnibus Plan.


Employee Activity - Options

The following tables summarize the Company’s employee stock option activity and related information for the years ended December 31, 2017, 2016 and 2015:

 
2017
 
2016
 
2015
 
 
 
Weighted-
 
 
 
Weighted-
 
 
 
Weighted-
 
 
 
Average
 
 
 
Average
 
 
 
Average
 
Options
 
Exercise
 
Options
 
Exercise
 
Options
 
Exercise
 
(000)
 
Price
 
(000)
 
Price
 
(000)
 
Price
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at beginning of year
564

 
$
41

 
786

 
$
32

 
1,363

 
$
28

Granted
128

 
48

 
137

 
44

 
96

 
50

Exercised
(206
)
 
35

 
(346
)
 
24

 
(659
)
 
26

Forfeited
(46
)
 
46

 
(13
)
 
35

 
(14
)
 
29

Outstanding at end of year
440

 
$
45

 
564

 
$
41

 
786

 
$
32

Exercisable at end of year
226

 
$
42

 
331

 
$
37

 
586

 
$
28

Weighted-average fair value of options granted during the year
$
13

 
 
 
$
12

 
 
 
$
15

 
 
Aggregate intrinsic value for options exercised
$
3,569

 
 
 
$
7,803

 
 
 
$
16,191

 
 
Average aggregate intrinsic value for options outstanding
$
3,387

 
 
 
 
 
 
 
 
 
 
Average aggregate intrinsic value for exercisable options
$
2,259

 
 
 
 
 
 
 
 
 
 









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
36.55

-
37.14


83


1.6

36.85


83


36.85

41.32

-
44.90


159


4.4

43.29


90


43.07

45.34

-
48.32


123


6.0

47.73


10


46.44

50.71

-
53.73


70


4.3

51.03


43


50.81

57.18

-
57.18


5


7.0

57.18


—


—

$
36.55

-
57.18


440


3.5

$
44.70


226


$
42.39



    
Year ended

December 31,
2017

December 31,
2016

December 31,
2015
Shared-based compensation for options
$
1,313


$
1,473


$
1,386

Tax benefit for option compensation
$
466


$
546


$
542

Unrecognized compensation cost for options
$
1,647






Weighted average period over which unrecognized compensation will be recognized (years)
1.8

 
 
 
 


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

2017

2016

2015



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
222


$
45


191


$
46


190


$
40

Granted
126


48


134


44


100


51

Vested
(105
)

45


(94
)

44


(93
)

39

Forfeited
(16
)

47


(9
)

45


(6
)

45

Outstanding and non-vested at end of year
227


$
47


222


$
45


191


$
46

Aggregate grant date fair value
$
10,618




$
10,108




$
8,773



Total fair value of shares vested during the year
$
5,040




$
4,064




$
4,694





Year ended

December 31,
2017

December 31,
2016

December 31,
2015
Shared-based compensation for non-vested shares
$
5,045


$
4,614


$
4,070

Tax benefit for non-vested share compensation
$
1,791


$
1,712


$
1,591

Unrecognized compensation cost for non-vested shares
$
6,137






Weighted average period over which unrecognized compensation will be recognized (years)
1.7

 
 
 
 


Employee Activity – Performance shares

In 2017, 2016 and 2015, 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 total shareholder return as compared to the total shareholder return of a selected peer group. No shares may be issued if the Company total shareholder return outperforms 25% or less of the peer group, but the number of shares issued may be doubled if the Company total shareholder return 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

2017

2016

2015



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
80


$
55


77


$
52


74


$
44

Granted
27


56


29


49


27


67

Additional shares awarded based on performance
—


—


7


40


—


—

Vested
—


—


(33
)

40


(24
)

45

Forfeited
(38
)

51


—


—


—


—

Outstanding and non-vested at end of year
69


$
58


80


$
55


77


$
52

Aggregate grant date fair value
$
3,980




$
4,373




$
4,016





Year ended

December 31,
2017

December 31,
2016

December 31,
2015
Shared-based compensation for performance shares
$
1,045


$
1,447


$
1,308

Tax benefit for performance share compensation
$
371


$
537


$
512

Unrecognized compensation cost for performance shares
$
1,383







Weighted average period over which unrecognized compensation will be recognized (years)
1.7

 
 
 
 


Employee Activity – Employee Stock Purchase Plan

Under the ESPP, at December 31, 2017, the Company is authorized to issue up to a remaining 371,859 shares of Common Stock to employees of the Company. For the years ended December 31, 2017, 2016 and 2015, participants under the ESPP purchased 9,954, 11,174, and 10,805 shares, respectively, at an average price of $46.01, $39.50, and $41.55 per share, respectively. The weighted-average fair value of each purchase right under the ESPP granted for the years ended December 31, 2017, 2016 and 2015, which is equal to the discount from the market value of the Common Stock at the end of each six month purchase period, was $9.26, $6.46, and $5.82 per share, respectively. Share-based compensation expense of $92, $72, and $61 was recognized in salaries, wages and employee benefits, during the years ended December 31, 2017, 2016 and 2015, respectively.

Non-employee Directors – Non-vested shares
 
In May 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.

In May 2016, with the approval of shareholders, the Company further amended the Amended Plan to reserve for issuance an additional 160,000 common shares, increasing the total number of reserved common shares under the Amended Plan to 360,000. As of December 31, 2017, there were approximately 148,019 shares remaining available for grant.
  
The following tables summarize the Company's non-employee non-vested share activity and related information:
Year ended

2017

2016

2015

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
16


$
44


15


$
51


15


$
44

Granted
14


52


16


44


14


51

Vested
(16
)

44


(15
)

51


(14
)

43

Forfeited
(3
)

49


—


—


—


—

Outstanding and non-vested at end of year
11


$
52


16


$
44


15


$
51

Aggregate grant date fair value
$
742




$
688




$
740



Total fair value of shares vested during the year
$
809




$
639




$
727



    
Year ended

December 31,
2017

December 31,
2016

December 31,
2015
Shared-based compensation for non-vested shares
$
608


$
728


$
661

Tax benefit for non-vested share compensation
$
216


$
263


$
259

Unrecognized compensation cost for non-vested shares
$
215






Weighted average period over which unrecognized compensation will be recognized (years)
0.4

 
 
 
 



Net Income per Share

The following table sets forth the computation of net income per basic and diluted share:
 
2017
 
2016
 
2015
Numerator:
 
 
 
 

Net income and comprehensive income
$
87,321

 
$
27,670

 
$
55,575

Income allocated to participating securities
(700
)
 
(212
)
 
(369
)
Numerator for basic and diluted income per share - net income
86,621

 
27,458

 
55,206


 
 
 
 

Denominator:
 
 
 
 

Denominator for basic net income per share - weighted-average shares (in thousands)
29,867

 
30,283

 
30,728

Effect of dilutive stock options (in thousands)
64

 
130

 
277

Effect of dilutive performance shares (in thousands)
33

 
31

 
35

Denominator for diluted net income per share - adjusted weighted-average shares (in thousands)
29,964

 
30,444

 
31,040

Basic net income per share
$
2.90

 
$
0.91

 
$
1.80

Diluted net income per share
$
2.89

 
$
0.90

 
$
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:
 
2017
 
2016
 
2015
Anti-dilutive stock options (in thousands)
172

 
310

 
184

Anti-dilutive performance shares (in thousands)
—

 
—

 
24

Total anti-dilutive shares (in thousands)
172

 
310

 
208