13.	EMPLOYEE BENEFITS AND INCENTIVE PLANS

Qualified Retirement Plan

We have a 401(k) plan, which covers substantially all employees 18 years of age or older who will also complete a minimum of 1,000 hours of service in each calendar year. Under the plan, we match 50% of employees’ contributions up to 14% of their gross salary or the statutory limit, whichever is less, if the employee satisfies the 1,000 hours of service requirement during the calendar year. Our matching contributions vest 25% per year beginning after the second service anniversary date. The matching contributions are 100% vested after the employee has attained five years of service. Total employer contributions under the plan were approximately $9.8 million, $8.5 million and $7.4 million for the years ended December 31, 2016, 2015 and 2014, respectively.

In the United Kingdom we have a group personal pension plan which is available to all employees, if the employee earns greater than £10,000, are 22 years of age or older and are younger than the State Pension age. Qualified employees are automatically enrolled three months after commencing employment. Employees who do not meet the eligibility criteria can still apply to join the plan upon the successful completion of their 3 month probationary period or alternatively wait until they do meet the criteria when they will be automatically enrolled. We are required to make a minimum contribution of 2% of a participating employee’s basic salary which must be matched by the employee. Employees can opt to pay more if they wish and we will match up to a maximum of 3% of their basic salary. Contributions are invested immediately in the default investment option however employees can subsequently make their own investment choices. Contributions into the pension plan are paid via a salary sacrifice method and therefore all contributions into the plan, unless an employee has chosen to opt-out, are classed as employer contributions. Total employer contributions under the plan were approximately $1.3 million, $1.2 million, and $1.3 million for the years ended December 31, 2016, 2015 and 2014, respectively.

In Canada we have a Deferred Profit Sharing Plan (“DPSP”) and a Group Registered Retirement Savings Program (“GRRSP”), which covers substantially all employees who have materially and significantly contributed to the prosperity and profits of the Company. Under the plan, we match 50% of employees’ regular contributions to the GRRSP up to 3% of their earnings or the statutory limit, whichever is less. Our matching contributions vest 100% on the second anniversary of membership in the DPSP. Total employer contributions under the plan were approximately $0.3 million, for each of the years ended December 31, 2016, 2015 and 2014, respectively.

In Australia, we contribute a percentage of the employee’s gross wages (excluding overtime) into a personal superannuation account of their choosing. If employees do not register a personal superannuation account with the Company, contributions are invested immediately in a personal MySuper compliant account until further instruction is received. From January 1, 2014 through June 30, 2014 the percentage was 9.5%, and it increased to 10.5% starting July 1, 2014. The total employer contributions under the plan were approximately $0.6 million, $0.7 million, and $0.8 million for the years ended December 31, 2016, 2015, and 2014 respectively.

Non-Qualified Retirement Plans

We maintain a grantor trust under the West Corporation Executive Retirement Savings Plan (“Trust”). The principal of the Trust, and any earnings thereon shall be held separate and apart from our other funds. Participation in the Trust is voluntary and is restricted to highly compensated individuals as defined by the Internal Revenue Service. We will match 50% of employee contributions, subject to the combined limits of the 401(k) plan and the Trust. Matching contributions 100% vest after completion of three years of service. Our total contributions under the plan for the years ended December 31, 2016, 2015 and 2014 were approximately $2.1 million, $2.6 million, and $1.9 million, respectively. Assets under the Trust at December 31, 2016 and 2015 were $51.6 million and $46.9 million, respectively. Assets and liabilities under the Trust are recorded in other assets and other long-term liabilities on our consolidated balance sheet.

We also maintain a Nonqualified Deferred Compensation Plan (as amended from time to time, the “Deferred Compensation Plan”). Pursuant to the terms of the Deferred Compensation Plan, eligible management, non-employee directors or highly compensated employees approved by the Compensation Committee of the Board of Directors may elect to defer a portion of their compensation and have such deferred compensation notionally invested in the same investments made available to participants of the 401(k) plan or in notional equity shares of the Company. We match a percentage of any amounts invested in notional equity shares (50% during 2016, 2015 and 2014). Such matched amounts are subject to 20% vesting each year. All matching contributions are 100% vested five years after the date the executive first participates in the Deferred Compensation Plan. Our total contributions for the years ended December 31, 2016, 2015 and 2014 under the plan were approximately $0.8 million, $1.7 million and $1.1 million, respectively. Assets under the Deferred Compensation Plan at December 31, 2016 and 2015 were $9.8 million and $9.2 million, respectively. The fair value of notional equity shares in the Deferred Compensation Plan at December 31, 2016 and 2015 were $34.9 million and $28.4 million, respectively. Assets and liabilities under the Trust are recorded in other assets and other long-term liabilities on our consolidated balance sheet.

Amounts deferred under the Trust and Deferred Compensation Plan (with respect to investments in mutual funds) and any earnings credited thereunder shall be held separate and apart from our other funds, but remain subject to claims by the Company’s general creditors.

2006 Executive Incentive Plan

Stock options granted under the West Corporation 2006 Executive Incentive Plan (“2006 EIP”) prior to 2012 vest over a period of five years, with 20% of the stock option becoming exercisable on each of the first through fifth anniversaries of the grant date. Stock options granted under the 2006 EIP in 2012 and 2013 vest over a period of four years, with 25% of the stock option becoming exercisable on each of the first through fourth anniversaries of the grant date. Once an option has vested, it generally remains exercisable until the tenth anniversary of the grant date so long as the participant continues to provide services to the Company.

2013 Long-Term Incentive Plan

Prior to the completion of our IPO, we adopted the 2013 Long-Term Incentive Plan, which was amended and restated in 2014 (as amended, the “2013 LTIP”). The 2013 LTIP is intended to provide our officers, employees, non-employee directors and consultants with added incentive to remain employed by or perform services for us and align such individuals’ interests with those of our stockholders. Under the terms of the 2013 LTIP, 8,500,000 shares of common stock were made available for stock options, restricted stock or other types of equity awards, subject to adjustment for stock splits and other similar changes in capitalization. The number of available shares under the 2013 LTIP is reduced by the aggregate number of shares underlying each award. To the extent that shares subject to an outstanding award granted under the 2013 LTIP are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or by reason of the settlement of such award in cash, then such shares will again be available under the 2013 LTIP (excluding shares withheld by the Company to pay withholding taxes related to an award under the 2013 LTIP).

Stock options granted under the 2013 LTIP vest over a period of four years, with 25% of the stock option becoming exercisable on each of the first through fourth anniversaries of the grant date. Once an option has vested, it generally remains exercisable until the tenth anniversary of the grant date so long as the participant continues to provide services to the Company. Restricted stock granted under the 2013 LTIP, which is time-vested, vests over a period of three or four years (excluding awards to directors which vest over a six-to-twelve month period), with a ratable portion of the restricted stock award vested on each anniversary of the grant date until fully vested, unless earlier forfeited as a result of termination of service to the Company prior to the applicable vesting date. Dividends are payable in respect of shares of unvested restricted stock either at the time the dividend is paid to stockholders or upon vesting of the restricted stock in accordance with the terms of the applicable restricted stock award agreement.

2006 Executive Incentive Plan and 2013 Long-Term Incentive Plan

The following table presents the stock or stock option activity under the 2006 EIP and 2013 LTIP for the year ended December 31, 2016:

	Stock or			Options Outstanding
	Options						Weighted
	Available			Number of			Average
	for Grant			Shares			Exercise Price
Balance at January 1, 2016		5,868,283			2,280,030		$	27.08
Options granted		—			—			—
Options exercised		—			(69,336	)		13.15
Options canceled or forfeited (2013 LTIP)		12,490			(12,490	)		23.52
Options canceled or forfeited (2006 EIP)		—			(28,899	)		33.70
Restricted stock granted		(666,733	)		—			—
Restricted stock canceled		119,480			—			—
Balance at December 31, 2016		5,333,520			2,169,305		$	27.45

At December 31, 2016, we expect that 2,158,402 options granted and outstanding will vest.

At December 31, 2016, the intrinsic value of options exercisable was approximately $0.4 million. The aggregate intrinsic value of options outstanding at December 31, 2016, was approximately $0.5 million. The aggregate intrinsic value of options outstanding, vested and expected to vest at December 31, 2016, was approximately $0.5 million.

The following table summarizes the information on the options granted under the 2006 EIP and 2013 LTIP at December 31, 2016:

Outstanding							Exercisable
			Average		Weighted				Weighted
			Remaining		Average				Average
Range of	Number of		Contractual		Exercise		Number of		Exercise
Exercise Prices	Options		Life (years)		Price		Options		Price
$0.00 - $25.36		389,018		6.70	$	23.67		244,723	$	23.47
25.37 - 28.80		1,267,788		4.78	$	25.52		1,267,788	$	25.52
28.81 - 33.52		490,126		4.21	$	33.45		490,126	$	33.45
33.53 - 84.80		22,373		2.63	$	71.54		22,373	$	71.54
$0.00 - $84.80		2,169,305		4.97	$	27.45		2,025,010	$	27.70

We account for the stock option grants under the 2006 EIP and 2013 LTIP in accordance with Accounting Standards Codification 718, Compensation-Stock Compensation. The fair value of each option granted was estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions used for valuation purposes for grants during 2014:

	2014
Risk-free interest rate		2.02	%
Dividend yield		3.64	%
Expected volatility		29.10	%
Expected life (years)		6.25
Weighted-average grant date fair value of options granted	$	4.90

The risk-free interest rate is based on the U.S. Treasury yield curve at the time of grant; the dividend yield is calculated as the ratio of dividends paid per share of common stock to the stock price on the date of grant; volatility is based on the five-year historical volatility of 12 public companies we consider guideline or peer companies; and the expected life is based on Staff Accounting Bulletin 107. This bulletin provides a simplified method for estimating the expected life of options. No stock options were granted in 2016 or 2015.

Restricted Shares, Restricted Stock Units and Performance-Based Restricted Stock Units

During 2016, pursuant to our agreement with our non-employee directors who are not affiliated with our former sponsors, we issued 26,483 shares of common stock with an aggregate fair value of approximately $600,000. These shares vest on the six-month anniversary of the date of grant in the case of initial awards and on the one-year anniversary for all other awards.

During 2016, we issued 425,750 restricted stock awards and restricted stock units to certain key employees. These awards vest ratably with 25% of the award vesting on each of the first through fourth anniversaries of the award date. The fair value of these awards at the date of grant was approximately $9.6 million and will be recognized over the remaining vesting period of approximately 3.2 years as of December 31, 2016. During 2016, 449,824 restricted stock awards and restricted stock units vested. 366,695 of these awards are outstanding after 83,129 were withheld in settlement of related payroll taxes.

During 2016, we issued 214,500 performance-based restricted stock units to certain key executives. Each performance-based restricted stock unit represents a contingent right to receive between zero and 1.75 shares of West common stock. These performance-based restricted stock units will vest based on the Company’s total shareholder return (“TSR”) percentile ranking over the applicable performance period as compared to the TSR of companies included in the Russell 2000 on both the first and last day of the performance period, which began on March 1, 2016 and ends on February 28, 2019. In accordance with the schedule below. If the Company’s TSR is negative for the performance period, the maximum award which may vest is the target award.



	Company Percentile Rank vs. Russell 2000	Aggregate Percentage of Shares Vested
Below Threshold	Below the 30^th percentile	0%
Threshold	At the 30^th percentile	50%
Target	At the 55^th percentile	100%
Maximum	At or above the 80^th percentile	175%

The fair value of these awards at the date of grant was approximately $4.8 million and will be recognized over the remaining vesting period of approximately 2.2 years as of December 31, 2016.

2013 Employee Stock Purchase Plan

In 2013, we implemented the 2013 Employee Stock Purchase Plan (“ESPP”), under which the sale of 1.0 million shares of our common stock initially had been authorized and reserved. On January 28, 2016, the Board approved an amendment to the ESPP to increase the number of shares available under the ESPP by an additional 1.0 million shares of common stock. The amendment was approved by a vote of the stockholders at our May 17, 2016 annual meeting. Employees may designate up to 50% of their annual compensation for the purchase of stock, subject to a per person limit of 2,000 shares in any offering period or calendar year. The price for shares purchased under the ESPP is 85% of the market closing price on the last day of the quarterly purchase period. No employee will be authorized to purchase common stock through the ESPP if, immediately after the purchase, the employee (or any other person whose stock would be attributed to such employee under U.S. tax law) would own stock and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any parent of the Company or any subsidiary. In addition, no participant will be entitled to purchase stock under the ESPP at a rate which, when aggregated with his or her rights to purchase stock under all other employee stock purchase plans of the Company and its subsidiaries, exceeds $25,000 in fair market value, determined as of the date of grant (or such other limit as may be imposed by U.S. tax law), for each calendar year in which any option granted to the participant under any such plans is outstanding at any time. During 2016, 389,158 shares were issued under the ESPP. At December 31, 2016, 946,554 shares had been issued under the ESPP to date. During the years ended December 31, 2016, 2015 and 2014, we recognized compensation expense for this plan of $1.2 million, $1.2 million and $1.1 million, respectively.

Share-Based Compensation Expense

For the years 2016, 2015 and 2014, share-based compensation expense was $25.4 million, $22.9 million and $15.6 million, respectively. The net income effect of share-based compensation expense for 2016, 2015 and 2014 was approximately $15.7 million, $14.7 million and $10.1 million, respectively.

At December 31, 2016 and 2015, there was approximately $0.5 million and $2.7 million of unrecorded and unrecognized compensation expense, adjusted for estimated forfeitures, related to unvested share-based compensation on stock options under the 2006 EIP and 2013 LTIP, respectively, which will be recognized over the remaining vesting period of approximately 0.9 years as of December 31, 2016.

At December 31, 2016 and 2015, there was approximately $35.4 million and $42.1 million of unrecorded and unrecognized compensation expense, related to unvested share-based compensation on restricted stock under the 2013 LTIP, which will be recognized over the remaining vesting period of approximately 2.2 years as of December 31, 2016.