XML 29 R13.htm IDEA: XBRL DOCUMENT
v3.6.0.2

CAPITAL STOCK AND STOCK AWARD PLANS | 12 Months Ended
--- | ---
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
CAPITAL STOCK AND STOCK AWARD PLANS | CAPITAL STOCK AND STOCK AWARD PLANS PREFERRED STOCK. Our Certificate of Incorporation authorizes the issuance of 20,000,000 shares of preferred stock, par value $0.10 per share. There are no shares of preferred stock outstanding. The preferred stock may be issued by resolution of our Board of Directors at any time without any action of the stockholders. The Board of Directors may issue the preferred stock in one or more series and fix the designation and relative powers. These include voting powers, preferences, rights, qualifications, limitations, and restrictions of each series. The issuance of any such series may have an adverse effect on the rights of holders of common stock and may impede the completion of a merger, tender offer, or other takeover attempt. COMMON STOCK. Our Certificate of Incorporation authorizes 480,000,000 shares of common stock, par value $.10 per share. Subject to the rights of preferred stock which may from time to time be outstanding, holders of common stock are entitled to receive dividends out of funds legally available, when and if declared by the Board of Directors, and to receive their share of the net assets of the company legally available for distribution upon liquidation or dissolution. For each share of common stock held, stockholders are entitled to one vote on each matter to be voted on by the stockholders, including the election of directors. Holders of common stock are not entitled to cumulative voting. The stockholders do not have preemptive rights. All outstanding shares of common stock are fully paid and nonassessable. STOCK AWARD PLANS. Stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense as it vests. A summary of our total compensation expense recognized in our consolidated statements of operations and comprehensive income for stock-based compensation is as follows (in thousands):
| 2016 |  | 2015 |  | 2014
Stock options | $ | 9,178 |  |  | $ | 14,607 |  |  | $ | 9,243 |
Stock awards | 25,912 |  |  | 40,785 |  |  | 36,510 |
Company expense on ESPP discount | 2,475 |  |  | 2,269 |  |  | 2,108 |
Total stock-based compensation expense | $ | 37,565 |  |  | $ | 57,661 |  |  | $ | 47,861 |
On May 12, 2016, our shareholders approved an amendment to and restatement of our 2013 Equity Incentive Plan, which allows us to grant certain stock awards, including stock options at fair market value and performance shares and restricted stock units, to our key employees and outside directors. A maximum of 13,041,803 shares can be granted under this plan. Approximately 4,851,473 shares were available for stock awards under this plan as of December 31, 2016. Shares subject to awards that expire or are canceled without delivery of shares or that are settled in cash, generally become available again for issuance under the plan. We have awarded performance-based stock options to certain key employees. These options are subject to certain vesting requirements over a five-year period, based on the company’s earnings growth. Any options remaining unvested at the end of the five-year vesting period are forfeited to the company. Although participants can exercise options via a stock swap exercise, we do not issue reloads (restoration options) on the grants. The fair value of these options is established based on the market price on the date of grant, discounted for post-vesting holding restrictions, calculated using the Black-Scholes option pricing model. Changes in measured stock price volatility and interest rates are the primary reasons for changes in the discount. These grants are being expensed based on the terms of the awards. As of December 31, 2016, unrecognized compensation expense related to stock options was $56.8 million. The amount of future expense to be recognized will be based on the company’s earnings growth and certain other conditions. The following schedule summarizes stock option activity in the plans. All outstanding unvested options as of December 31, 2016, relate to the performance-based grants from 2011 through 2016.
| Options |  | Weighted Average Exercise Price |  | Aggregate Intrinsic Value (in thousands) |  | Average Remaining Life (years)
Outstanding at December 31, 2015 | 6,150,861 |  |  | $ | 65.03 |  |  | $ | — |  |  | 8.1
Grants | 1,250,154 |  |  | 76.72 |  |  |  |  |
Exercised | (86,840 | ) |  | 61.82 |  |  |  |  |
Terminated | (306,252 | ) |  | 68.81 |  |  |  |  |
Outstanding at December 31, 2016 | 7,007,923 |  |  | $ | 67.00 |  |  | $ | 43,875 |  |  | 7.7
Vested at December 31, 2016 | 2,646,205 |  |  | $ | 64.63 |  |  |  |  | 6.7
Exercisable at December 31, 2016 | 2,646,205 |  |  | $ | 64.63 |  |  |  |  | 6.7
Additional potential dilutive stock options totaling 233,446 for 2016 and 125,797 for 2015 have been excluded from our diluted net income per share calculations because these securities’ exercise prices were anti-dilutive (e.g., greater than the average market price of our common stock). Information on the intrinsic value of options exercised is as follows (in thousands):
2016 | $ | 981 |
2015 | 400 |
2014 | 4 |
The following table summarizes performance-based options by year of grant:
Year of Grant |  | First Vesting Date |  | Last Vesting Date |  | Options Granted, Net of Forfeitures |  | Weighted Average Grant Date Fair Value |  | Unvested Options
2012 |  | December 31, 2013 |  | December 31, 2017 |  | 1,149,441 |  |  | $ | 13.15 |  |  | 666,676 |
2013 |  | December 31, 2014 |  | December 31, 2018 |  | 1,425,529 |  |  | 11.83 |  |  | 541,701 |
2014 |  | December 31, 2015 |  | December 31, 2019 |  | 1,277,409 |  |  | 14.17 |  |  | 804,595 |
|  |  |  |  |  | 3,852,379 |  |  | $ | 13.00 |  |  | 2,012,972 |
We issued no performance-based options in 2015 or 2016. We have awarded stock options to certain key employees that vest primarily based on their continued employment. The value of these awards is established by the market price on the date of the grant and is being expensed over the vesting period of the award. The following table summarizes these unvested stock option grants as of December 31, 2016:
Year of Grant |  | First Vesting Date |  | Last Vesting Date |  | Options Granted, Net of Forfeitures |  | Weighted Average Grant Date Fair Value |  | Unvested Options
2015 |  | December 31, 2016 |  | December 31, 2020 |  | 1,428,531 |  |  | $ | 12.66 |  |  | 1,142,825 |
2016 |  | December 31, 2017 |  | December 31, 2021 |  | 1,250,154 |  |  | 12.60 |  |  | 1,250,154 |
|  |  |  |  |  | 2,678,685 |  |  | $ | 12.63 |  |  | 2,392,979 |
Determining Fair Value We estimated the fair value of stock options granted using the Black-Scholes option pricing model. We estimate the fair value of restricted shares and units using the Black-Scholes option pricing model-protective put method. A description of significant assumptions used to estimate the expected volatility, risk-free interest rate, and expected terms is as follows: Expected Volatility-Expected volatility was determined based on implied volatility of our traded options and historical volatility of our stock price. Risk-Free Interest Rate-The risk-free interest rate was based on the implied yield available on U.S. Treasury zero-coupon issues at the date of grant with a term equal to the expected term. Expected Term-Expected term represents the period that our stock-based awards are expected to be outstanding and was determined based on historical experience and anticipated future exercise patterns, giving consideration to the contractual terms of unexercised stock-based awards. The fair value per option was estimated using the Black-Scholes option pricing model with the following assumptions:
| 2016 Grants |  | 2015 Grants |  | 2014 Grants
Risk-free interest rate | 2.13-2.14% |  |  | 1.95-1.96% |  |  | 1.93-1.96% |
Dividend per share (quarterly amounts) | $0.43-0.45 |  |  | $0.38-0.43 |  |  | $0.35-0.38 |
Expected volatility factor | 20.0-21.5% |  |  | 22.0-24.0% |  |  | 22.0-25.0% |
Expected option term | 6.26 years |  |  | 6.29 years |  |  | 6.3 years |
Weighted average fair value per option | $ | 12.60 |  |  | $ | 12.68 |  |  | $ | 14.23 |
FULL VALUE AWARDS. We have awarded performance shares and restricted stock units to certain key employees and non-employee directors. These awards are subject to certain vesting requirements over a five-year period, based on the company’s earnings growth. The awards also contain restrictions on the awardees’ ability to sell or transfer vested awards for a specified period of time. The fair value of these awards is established based on the market price on the date of grant, discounted for post-vesting holding restrictions. The discounts on outstanding grants vary from 15 percent to 22 percent and are calculated using the Black-Scholes option pricing model-protective put method. Changes in measured stock price volatility and interest rates are the primary reasons for changes in the discount. These grants are being expensed based on the terms of the awards. The following table summarizes our unvested performance shares and restricted stock unit grants as of December 31, 2016:
| Number of Performance Shares and Restricted Stock Units |  | Weighted Average Grant Date Fair Value
Unvested at December 31, 2015 | 1,272,040 |  |  | $ | 52.56 |
Granted | 350,937 |  |  | 64.91 |
Vested | (175,413 | ) |  | 52.40 |
Forfeitures | (202,389 | ) |  | 53.61 |
Unvested at December 31, 2016 | 1,245,175 |  |  | $ | 55.90 |
The following table summarizes performance shares and restricted stock units by year of grant:
Year of grant |  | First vesting date |  | Last vesting date |  | Performance Shares and Stock Units Granted, Net of Forfeitures |  | Weighted Average Grant Date Fair Value (1) |  | Unvested Performance Shares and Restricted Stock Units
2012 |  | December 31, 2013 |  | December 31, 2017 |  | 325,536 |  |  | $ | 48.65 |  |  | 188,811 |
2013 |  | December 31, 2014 |  | December 31, 2018 |  | 394,672 |  |  | 46.50 |  |  | 149,975 |
2014 |  | December 31, 2015 |  | December 31, 2019 |  | 336,683 |  |  | 60.57 |  |  | 212,110 |
2015 |  | December 31, 2016 |  | December 31, 2020 |  | 390,163 |  |  | 51.88 |  |  | 343,342 |
2016 |  | December 31, 2017 |  | December 31, 2021 |  | 350,937 |  |  | 64.91 |  |  | 350,937 |
|  |  |  |  |  | 1,797,991 |  |  | $ | 54.29 |  |  | 1,245,175 |
________________________
(1) | Amount shown is the weighted average grant date fair value of performance shares and restricted stock units granted, net of forfeitures.
We have also awarded restricted shares and restricted stock units to certain key employees that vest primarily based on their continued employment. The value of these awards is established by the market price on the date of the grant and is being expensed over the vesting period of the award. The following table summarizes these unvested restricted share and restricted stock unit grants as of December 31, 2016:
| Number of Restricted Shares and Stock Units |  | Weighted Average Grant Date Fair Value
Unvested at December 31, 2015 | 1,127,522 |  |  | $ | 52.69 |
Granted | 464,823 |  |  | 63.02 |
Vested | (291,525 | ) |  | 52.01 |
Forfeitures | (60,664 | ) |  | 53.06 |
Unvested at December 31, 2016 | 1,240,156 |  |  | $ | 56.70 |
We have also issued to certain key employees and non-employee directors restricted stock units which are fully vested upon issuance. These units contain restrictions on the awardees’ ability to sell or transfer vested units for a specified period of time. The fair value of these units is established using the same method discussed above. These grants have been expensed during the year they were earned. A summary of the fair value of full value awards vested (in thousands):
2016 | $ | 25,912 |
2015 | 40,785 |
2014 | 36,510 |
As of December 31, 2016, there was unrecognized compensation expense of $140.3 million related to previously granted full value awards. The amount of future expense to be recognized will be based on the company’s earnings growth and certain other conditions. EMPLOYEE STOCK PURCHASE PLAN. Our 1997 Employee Stock Purchase Plan allows our employees to contribute up to $10,000 of their annual cash compensation to purchase company stock. Purchase price is determined using the closing price on the last day of the quarter discounted by 15 percent. Shares are vested immediately. The following is a summary of the employee stock purchase plan activity (dollar amounts in thousands):
|  | Shares Purchased By Employees |  | Aggregate Cost to Employees |  | Expense Recognized By the Company
2016 |  | 225,241 |  |  | $ | 14,032 |  |  | $ | 2,475 |
2015 |  | 228,103 |  |  | 13,045 |  |  | 2,269 |
2014 |  | 231,564 |  |  | 11,943 |  |  | 2,108 |
SHARE REPURCHASE PROGRAMS. During 2013, our Board of Directors increased the number of shares authorized to be repurchased by 15,000,000 shares. The activity under this authorization is as follows (dollar amounts in thousands):
|  | Shares Repurchased |  | Total Value of Shares Repurchased
2013 Program |  |  |  |
2013 Purchases |  | 930,075 |  |  | $ | 57,689 |
2014 Purchases |  | 3,763,583 |  |  | 239,037 |
2015 Purchases |  | 3,420,681 |  |  | 232,113 |
2016 Purchases |  | 2,467,097 |  |  | 176,676 |
As of December 31, 2016, there were 4,418,564 shares remaining for repurchase under the 2013 authorization.

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration