Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  


Stock Compensation Plans


Stock options and time lapse restricted shares (TLRSs) have been issued to officers and other management employees under the Company’s Employee Stock Incentive Plan.


Stock Options


The Company’s stock options generally vest over a five-year period and expire ten years from the issuance date. For the years ended December 31, 2015 and 2014, respectively, the Company did not issue any shares of common stock upon exercise of stock options by employees.


In order to estimate the fair value of stock options, the Company used the Black-Scholes option valuation model, which was developed for use in estimating the fair value of publicly traded options, which have no vesting restrictions and are fully transferable. Option valuation models require the input of highly subjective assumptions and these assumptions can vary over time.


Option activity under the Company’s stock option plan as of December 31, 2015, 2014 and 2013 and changes during the year ended December 31, 2015 were as follows:


(in thousands except per share data)   Shares   Weighted Average Exercise Price   Weighted Average Remaining Contractual Term
(in years)
  Aggregate Intrinsic Value
Outstanding at December 31, 2012     1     $ 3.68       0.08     $ 17  
Exercised     (1 )     3.68                  
Outstanding at December 31, 2013     —         —         —         —    
Exercised     —         —                    
Outstanding at December 31, 2014     —       $ —         —       $ —    
Exercised     —         —                    
Outstanding at December 31, 2015     —       $ —         —       $ —    
Exercisable at December 31, 2015     —       $ —         —       $ —    


The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the year and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on that day. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s stock.


There were no options exercised during the years ended December 31, 2015 or 2014. The aggregate intrinsic value of options exercised during the year ended December 31, 2013 was $0.1 million. Exercise of options during the year ended December 31, 2013 resulted in cash receipts of less than $10 thousand.


Time Lapse Restricted Shares and Restricted Stock Units


TLRSs provide for the issuance of a share of the Company’s Common Stock at no cost to the holder and generally vest after a certain stipulated number of years from the grant date, depending on the terms of the issue. TLRSs vest in 20 percent increments starting with the second anniversary of the grant, over six years from the date of grant. During these years, grantees receive all dividends declared and retain voting rights for the granted shares. The agreements under which the restricted stock is issued provide that shares awarded may not be sold or otherwise transferred until restrictions established under the plans have lapsed.


The Company issued time lapse restricted shares of 0.7 million, 0.6 million, and 0.7 million for the years ended December 31, 2015, 2014, and 2013, respectively.


The Company issues new shares from its authorized but unissued share pool. At December 31, 2015, approximately 5.1 million shares of the Company’s common stock were reserved for issuance. In accordance with the FASB ASC Topic 718, “Compensation – Stock Compensation,” the Company recognizes the fair value of the award on a straight line basis over the service periods of each award. The Company estimates restricted share forfeiture rates based on its historical experience.


The following table summarizes the components of the Company’s stock-based compensation programs recorded as expense ($ in thousands):


Years ended December 31,   2015   2014   2013
Time Lapse Restricted Stock:                        
Pre-tax compensation expense   $ 12,110     $ 10,579     $ 10,427  
Tax benefit     (4,687 )     (4,094 )     (4,014 )
Restricted stock expense, net of tax   $ 7,423     $ 6,485     $ 6,413  


As of December 31, 2015 and 2014, $31.3 million and $29.4 million, respectively, of total unrecognized compensation cost related to time-lapse restricted shares are expected to be recognized over a weighted average period of approximately 3.8 years at December 31, 2015 and approximately 3.7 years at December 31, 2014.


The following table summarizes information on unvested restricted stock units outstanding as of December 31, 2015, 2014 and 2013:

    Number of Shares
(in thousands)
  Weighted-Average Grant-Date Fair Value
Unvested Restricted Stock Grants                
Unvested as of December 31, 2012     4,114     $ 10.94  
Forfeited     (84 )     11.68  
Vested     (1,045 )     8.89  
Granted     695       16.19  
Unvested as of December 31, 2013     3,680       12.50  
Forfeited     (178 )     14.27  
Vested     (1,018 )     10.31  
Granted     616       19.16  
Unvested as of December 31, 2014     3,100       14.45  
Forfeited     (85 )     15.71  
Vested     (946 )     12.04  
Granted     682       22.43  
Unvested as of December 31, 2015     2,751     $ 17.21