NOTE 9 - Shareholders' Equity and Common Stock Equivalents

Share Repurchase Programs and Treasury Shares Held (Common Stock)

In December 2011, HMEC’s Board of Directors (the “Board”) authorized a share repurchase program allowing repurchases of up to $50,000 (the “2011 Plan”). In September 2015, the Board authorized an additional share repurchase program allowing repurchases of up to $50,000 (the “2015 Plan”) to begin following the completion of the 2011 Plan. Both share repurchase programs authorize the repurchase of HMEC’s common shares in open market or privately negotiated transactions, from time to time, depending on market conditions. The share repurchase programs do not have expiration dates and may be limited or terminated at any time without notice.

During 2013, the Company repurchased 173,629 shares of its common stock, or 0.4% of the outstanding shares on December 31, 2012, at an aggregate cost of $3,889, or an average price of $22.38 per share, under the 2011 Plan. During 2014, the Company repurchased 190,876 shares of its common stock, or 0.5% of the outstanding shares on December 31, 2013, at an aggregate cost of $5,411, or an average price of $28.33 per share, under the 2011 Plan. During 2015, the Company repurchased 663,092 shares of its common stock, or 1.6% of the outstanding shares on December 31, 2014, at an aggregate cost of $21,950, or an average price of $33.08 per share, under the 2011 Plan. In total and through December 31, 2015, 2,098,200 shares were repurchased under the 2011 Plan at an average price of $23.35 per share. The repurchase of shares was financed through use of cash. As of December 31, 2015, $51,010 remained authorized for future share repurchases under the combined 2011 Plan and 2015 Plan authorizations.

At December 31, 2015, the Company held 23,971,522 shares in treasury.

Authorization of Preferred Stock

In 1996, the shareholders of HMEC approved authorization of 1,000,000 shares of $0.001 par value preferred stock. The Board of Directors is authorized to (1) direct the issuance of the preferred stock in one or more series, (2) fix the dividend rate, conversion or exchange rights, redemption price and liquidation preference, of any series of the preferred stock, (3) fix the number of shares for any series and (4) increase or decrease the number of shares of any series. No shares of preferred stock were outstanding at December 31, 2015 and 2014.

2010 Comprehensive Executive Compensation Plan

In 2010, the shareholders of HMEC approved the 2010 Comprehensive Executive Compensation Plan (the “Comprehensive Plan”). The purpose of the Comprehensive Plan is to aid the Company in attracting, retaining, motivating and rewarding employees and non-employee Directors; to provide for equitable and competitive compensation opportunities, including deferral opportunities; to encourage long-term service; to recognize individual contributions and reward achievement of Company goals; and to promote the creation of long-term value for the Company’s shareholders by closely aligning the interests of plan participants with those of shareholders. The Comprehensive Plan authorizes share-based and cash-based incentives for plan participants. In 2012, the shareholders of HMEC approved the implementation of a fungible share pool under which grants of full value shares will count against the share limit as two and one half shares for every share subject to a full value award. In 2015, the shareholders of HMEC approved an amendment and restatement of the Comprehensive Plan which included an increase of 3.25 million in the number of shares of common stock reserved for issuance under the Comprehensive Plan. As of December 31, 2015, approximately 3.9 million shares were available for grant under the Comprehensive Plan. Shares of common stock issued under the Comprehensive Plan may be either authorized and unissued shares of HMEC or shares that have been reacquired by HMEC; however, new shares have been issued historically.

As further described in the paragraphs below, outstanding stock units and stock options under the Comprehensive Plan were as follows:

	December 31,
	2015	2014	2013
Common stock units related to deferred compensation for Directors	85,200	87,993	118,062
Common stock units related to deferred compensation for employees	55,443	69,598	111,981
Stock options	669,693	634,437	956,814
Restricted common stock units related to incentive compensation	1,442,325	1,590,138	1,663,190
Total	2,252,661	2,382,166	2,850,047

Director Common Stock Units

Deferred compensation of Directors is in the form of common stock units, which represent an equal number of common shares to be issued in the future. The outstanding units of Directors serving on the Board accrue dividends at the same rate as dividends paid to HMEC’s shareholders; outstanding units of retired Directors do not accrue dividends. These dividends are reinvested into additional common stock units.

Employee Common Stock Units

Deferred compensation of employees is in the form of common stock units, which represent an equal number of common shares to be issued in the future. Distributions of employee deferred compensation are allowed to be either in common shares or cash. Through December 31, 2015, all distributions have been in cash. The outstanding units accrue dividends at the same rate as dividends paid to HMEC’s shareholders. These dividends are reinvested into additional common stock units.

Stock Options

Options to purchase shares of HMEC common stock may be granted to executive officers, other employees and Directors. The options become exercisable in installments based on service generally beginning in the first year from the date of grant and generally become fully vested 4 years from the date of grant. The options generally expire 7 to 10 years from the date of grant. The exercise price of the option is equal to the market price of HMEC’s common stock on the date of grant resulting in a grant date intrinsic value of $0.

Changes in outstanding options were as follows:

	Weighted Average			Range of		Options
	Option Price			Option Prices					Vested and
	per Share			per Share		Outstanding			Exercisable

December 31, 2014		$	21.22		$ 6.91-$30.24		634,437			208,578

Granted		$	32.44		$32.35-$33.41		142,908			-
Vested		$	21.23		$13.83-$30.24		-			158,586
Exercised		$	17.71		$13.83-$28.88		(85,532	)		(85,532	)
Forfeited		$	23.10		$17.01-$28.88		(22,120	)		-
Expired			-		-		-			-

December 31, 2015		$	24.00		$ 6.91-$33.41		669,693			281,632

Option information segregated by ranges of exercise prices was as follows:

December 31, 2015

Total Outstanding Options

Vested and Exercisable Options

Weighted

Range of

Average

Option Prices

Option Price

Remaining

Option Price

Remaining

per Share

Options

per Share

Term

Options

per Share

Term

$ 6.91-$17.01

103,368

$16.14

1.9 years

103,368

$16.14

1.9 years

$17.32-$22.69

257,921

$19.32

3.7 years

139,216

$18.98

3.6 years

$28.88-$33.41

308,404

$30.54

8.6 years

39,048

$28.94

8.1 years

Total

$ 6.91-$33.41

669,693

$24.00

5.7 years

281,632

$19.32

3.6 years

The weighted average exercise prices of vested and exercisable options as of December 31, 2014 and 2013 were $17.20 and $15.78, respectively.

As of December 31, 2015, based on a closing stock price of $33.18 per share, the aggregate intrinsic (in-the-money) values of vested options and all options outstanding were $3,904 and $6,152, respectively.

Restricted Common Stock Units

Restricted common stock units may be granted to executive officers, other employees and Directors and represent an equal number of common shares to be issued in the future. The restricted common stock units vest in installments based on service or attainment of performance criteria generally beginning in the first year from the date of grant and generally become fully vested 1 to 5 years from the date of grant. The outstanding units accrue dividends at the same rate as dividends paid to HMEC’s shareholders. These dividends are reinvested into additional restricted common stock units.

Changes in outstanding restricted common stock units were as follows:

	Total Outstanding Units				Vested Units
				Weighted Average				Weighted Average
				Grant Date Fair				Grant Date Fair
	Units			Value per Unit	Units			Value per Unit

December 31, 2014		1,590,138		$21.34		853,054		$14.36

Granted (1)		225,180		$34.42		-		-
Vested		-		-		303,057		$19.39
Forfeited		(66,794	)	$25.60		-		-
Distributed (2)		(306,199	)	$16.13		(306,199	)	$16.13

December 31, 2015		1,442,325		$24.29		849,912		$15.51

(1)	Includes dividends reinvested into additional restricted common stock units.
(2)	Includes distributed units which were utilized to satisfy withholding taxes due on the distribution.