In April 2019, the Company sold in a private placement to institutional investors in Israel 1,408,921 ordinary shares, at a price per share equal to $131.81. As part of the private placement the shares were registered with the SEC.

In February 2018 the Company's Board of Directors approved the 2018 Equity Incentive Plan for Executive Officers (the “2018 Equity Incentive Plan”). The purpose of this plan was to enable the Company to link the compensation and benefits of its Executive Officers with the future growth and success of the Company and its Affiliates and with long-term shareholder value. The 2018 Equity Incentive Plan consists of 1,000,000 options (the "Options") to be exercised using a “Net-Exercise Mechanism,” which entitles the recipients to exercise the Options for an amount of shares reflecting only the benefit factor. The Options were allocated, subject to the required approvals, to the Company's Israeli Executive Officers.

The exercise price of an option is determined in U.S dollars and is the higher of: (i) the average closing share price of an Elbit Systems ordinary shares on the TASE, during the period of thirty (30) trading days preceding the date on which the Company's Board of Directors approves the granting of the respective options, converted into U.S. Dollars by applying the average representative U.S. dollar - NIS exchange rate during such thirty (30) trading days period; or (ii) the closing share price of our ordinary shares on the TASE on the last trading date preceding the date on which the Company's Board of Directors approves the granting of the respective options, converted into the U.S. Dollars by applying the representative U.S. dollar - NIS exchange rate.



	2019			2018
	Number of options		Weighted average exercise price	Number of options	Weighted average exercise price
Outstanding - beginning of the year	965,000		128.48	—	—
Granted	—		—	965,000	128.48
forfeited	(60,000	)	128.91	—	—
Outstanding - end of the year	905,000		128.45	965,000	128.48

The aggregate intrinsic value represents the total intrinsic value (the difference between Elbit Systems’ closing stock price on the last trading day of the fourth quarter of the applicable fiscal 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 December 31, 2019. This amount changes, based on the market price of the Company’s stock and the average exercise price of in-the-money options. Aggregate intrinsic value of outstanding options as of December 31, 2019, was $23,943.

As of December 31, 2019, there was $15,047 of total unrecognized compensation cost related to share-based compensation arrangements granted under Elbit Systems’ stock option plan. That cost is expected to be recognized over a weighted average period of 4 years.

As of December 31, 2019, 899,932 options were expected to be vested at a weighted average exercise price of $128.45 per share. The weighted average remaining contractual life of exercisable options as of December 31, 2019, is approximately 3.95, and their aggregate intrinsic value is zero.



	Options outstanding
Exercise price	Number of options	Weighted average remaining contractual life (years)	Weighted average exercise price per share
$121.42 - $128.91	905,000	3.95	$	128.45

Compensation expenses related to the 2018 Equity Incentive Plan amounted to $3,994 and $1,387 for the years ended December 31, 2019 and 2018 respectively, which were recognized, as follows:



	Year ended December 31, 2019					Year ended December 31, 2018					Year ended December 31, 2017
	Net income to shareholders of ordinary shares		Weighted average number of shares (*)	Per Share amount		Net income to shareholders of ordinary shares		Weighted average number of shares (*)	Per Share amount		Net income to shareholders of ordinary shares		Weighted average number of shares (*)	Per Share amount
Basic net earnings	$	227,857	43,787	$	5.20	$	206,738	42,789	$	4.83	$	239,109	42,786	$	5.59

Effect of dilutive securities:
Employee stock options	—		61			—		—			—		3
Diluted net earnings	$	227,857	43,848	$	5.20	$	206,738	42,789	$	4.83	$	239,109	42,789	$	5.59

In August 2018, the Company’s Board of Directors approved a “Phantom Bonus Retention Plan” for Senior Officers, who are not Executive Officers (the “2018 Phantom Plan”).

The 2018 Phantom Plan provides for phantom bonus units which entitle the recipients to receive payment in cash of an amount reflecting the “benefit factor”, which is linked to the performance of Elbit Systems’ stock price over the applicable periods (tranches) under the 2018 Phantom Plan. As of December 31, 2019, 1,333,850 phantom bonus units of the Plan were granted with a weighted average basic price per unit, as defined in the Plan, of $141.20.

The benefit earned for each year of a tranche is the difference between the basic price and the closing price of the Company’s share for that year, as defined in the 2018 Phantom Plan, not to exceed an increase of 100% in the Company's share price from the basic price of the first year of a tranche.

The Company recorded an amount of approximately $9,595 and $1,064, during the years ended December 31, 2019 and 2018, respectively, as compensation costs related to the phantom bonus units granted under the 2018 Phantom Plan, as follows:



	Year ended December 31,
	2019		2018
Cost of revenues	$	5,530	$	598
General and administration expenses	2,447		277
Marketing and selling	1,618		187
	$	9,595	$	1,064

In August 2012, the Company’s Board of Directors approved a “Phantom Bonus Retention Plan” for Senior Officers (the “2012 Phantom Bonus Retention Plan”). In August 2013, the 2012 Phantom Bonus Retention Plan was extended to include other officers of the Company.

The 2012 Phantom Bonus Retention Plan provides for phantom bonus units which entitle the recipients to receive payment in cash of an amount reflecting the “benefit factor”, which is linked to the performance of Elbit Systems’ stock price over the applicable periods (tranches) under the Plan. There were no new grants during 2019 and 2018, under the 2012 Phantom Bonus Retention Plan.

The benefit earned for each year of a tranche is the difference between the basic price and the closing price of the Company’s share for that year, as defined in the 2012 Phantom Bonus Retention Plan, not to exceed an increase of 100% in the Company's share price from the basic price of the first year of a tranche.

The Company recorded an amount of approximately $1,858, $2,628 and $28,254 in the years ended December 31, 2019, 2018 and 2017, respectively, as compensation costs related to the phantom bonus units granted under the 2012 Phantom Bonus Retention Plan, as follows:



	Year ended December 31,
	2019		2018		2017
Cost of revenues	$	426	$	985	$	10,199
General and administration expenses	1,160		1,225		13,948
Marketing and selling	272		418		4,107
	$	1,858	$	2,628	$	28,254

Dividends declared by Elbit Systems are paid subject to statutory limitations. Elbit Systems’ Board of Directors has determined not to declare dividends out of tax exempt earnings.