Equity-Based Compensation

Equity-based compensation awards were granted to Actua employees, directors and consultants and certain employees of its consolidated businesses under Actua’s 2005 Omnibus Equity Compensation Plan (as amended from time to time, the "Plan"). Generally, the awards vested over a period from one to four years or based on the achievement of performance-based or market-based conditions, and expired eight to ten years after the grant date. Due to the closing of the Velocity/Bolt Sale in December 2017, all outstanding equity-based compensation awards vested on December 12, 2017. As of December 31, 2017, Actua had 2,900,295 shares of common stock reserved under the Plan for possible future issuance. Actua does not intend to make additional grants under the Plan.

Actua issued the following types of equity-based compensation to its employees and non-employee directors: (1) restricted stock and restricted stock units (which have been subject to performance-based or market-based conditions), (2) stock appreciation rights ("SARs"), (3) stock options and (4) deferred stock units ("DSUs").

Actua’s grants of equity-based compensation were approved by the Board or the Compensation Committee of the Board. Equity-based compensation is included in the line item "General and administrative" in Actua’s Consolidated Statements of Operations and Comprehensive Income (Loss).

Equity-based compensation by equity award type was as follows:



(in thousands)	Year ended December 31,
	2017		2016		2015
Restricted stock	$	14,683	$	11,390	$	22,811
SARs	118		128		398
DSUs	430		341		234
Total equity-based compensation	$	15,231	$	11,859	$	23,443

Restricted Stock

Actua periodically issued shares of restricted stock to its employees, employees of its consolidated businesses and its non-management directors. Recipients of restricted stock did not pay any cash consideration for the shares and had the right to vote all shares subject to the grant. Any cash dividends paid by Actua in respect of unvested restricted stock would have been paid to the holders of outstanding restricted stock at the same time as cash dividends were paid to common stockholders. Any dividends paid by Actua in stock or other property in respect of unvested restricted stock would have been paid to the holders of outstanding unvested restricted stock subject to the same terms and conditions related to vesting, forfeiture and non-transferability as the underlying stock.

Share activity with respect to restricted stock awards for the years ended December 31, 2017, 2016 and 2015 was as follows:



	Number of shares		Weighted average grant date fair value
Issued and unvested as of December 31, 2014	3,755,275		$	15.94
Granted	581,672		$	15.48
Vested	(785,820	)	$	18.20
Forfeited	(70,299	)	$	17.35
Issued and unvested as of December 31, 2015	3,480,828		$	15.82
Granted	555,680		$	8.37
Vested	(766,159	)	$	17.96
Forfeited	(626,319	)	$	10.90
Issued and unvested as of December 31, 2016	2,644,030		$	14.15
Granted	340,566		$	13.87
Vested	(2,816,884	)	$	14.46
Forfeited	(167,712	)	$	8.44
Issued and unvested as of December 31, 2017	—		$	—

The total aggregate fair value of restricted stock awards that vested during the years ended December 31, 2017, 2016 and 2015 was $42.4 million, $6.3 million and $12.8 million, respectively. The following shares were surrendered by Actua's employees to satisfy withholding taxes:



		Restricted shares surrendered
Year ended December 31, 2017		1,055,446
Year ended December 31, 2016		196,566
Year ended December 31, 2015		258,947

As of December 31, 2017, there were no issued and unvested shares of restricted stock granted under the Plan.

Restricted Stock – Awards with Market Conditions

Actua issued restricted stock awards with market-based vesting conditions to its employees and certain employees of its consolidated businesses, the vesting of which was contingent upon achievement of specified price targets for Actua’s common stock. The equity-based compensation expense for awards with market-based vesting conditions is recorded based on the fair value of the awards, which is determined using a Monte Carlo simulation model at the time the award is granted. For the majority of the market-based awards, the derived service period over which the expense was recognized was also determined by the Monte Carlo simulation model. In the event that the market-based conditions were not achieved and the related restricted stock awards were forfeited, equity-based compensation expense would not be reversed; if an employee terminated service with Actua prior to the market-based award vesting, any compensation expense associated with the unvested award was reversed.

During 2011, a total of 366,666 shares of restricted stock with market-based conditions were granted to Actua’s Chief Executive Officer and its President. The market-based conditions were not achieved and the relevant shares of restricted stock lapsed unvested in the first quarter of 2016.

In February 2014, a total of 1,277,500 shares of restricted stock with market-based conditions were granted to certain of Actua’s employees, including Actua’s executive officers, and certain executives of Actua’s consolidated businesses. The vesting of those shares was contingent upon the 45-trading day volume-weighted average price per share ("VWAP") of Actua’s common stock meeting or exceeding specified 45-trading day VWAP targets ($28.07, $30.16, $32.38, and $34.71) (the "2014 VWAP Targets") on or before February 28, 2018, with 25% of the shares vesting upon achievement of each of the targets. Through the year ended December 31, 2017, 20,000 shares related to this award were forfeited.

There were various other restricted stock awards that were issued, the vesting of which were contingent upon the 45-trading day VWAP of Actua’s common stock meeting or exceeding the 2014 VWAP Targets on or before February 28, 2018. These issuances total 90,800 shares awarded, of which 12,600 shares were forfeited through the year ended December 31, 2017.

All of the shares of restricted stock with market conditions vested upon the closing of the Velocity/Bolt Sale, which was deemed a change of control under the Plan.

Restricted Stock – Awards with Performance Conditions

Actua also granted restricted stock awards with performance-based vesting conditions to its employees and certain employees of its consolidated businesses, the vesting of which was contingent upon the achievement of specified financial goals. The equity-based compensation expense for awards with performance-based vesting conditions was recorded based on the fair value of the awards, determined by the closing price of Actua’s common stock on the date of grant. Actua assessed the probability of the achievement of any performance conditions and adjusted the related equity compensation expense accordingly. In the event that the performance-based conditions were not achieved and the related restricted stock awards were forfeited, equity-based compensation expense related to those awards was reversed.

During January 2014, 244,506 shares of restricted stock were granted to two Actua employees; the vesting of the shares was based on one of the then consolidated business' achievement of certain performance metrics in 2014 and 2015, with a maximum vesting of 100,247 shares for 2015 and a maximum vesting of 144,259 shares for 2016. To the extent the performance metrics were not met, the restricted shares lapsed unvested. Based on the achievement of that business’s 2014 performance metrics, 56,587 shares vested and 43,660 shares were forfeited during the first quarter of 2015. Based on the achievement of that business’ 2015 performance metrics, 81,322 shares vested, and 62,937 shares were forfeited during the first quarter of 2016.

For the years ended December 31, 2015, 2016 and 2017, senior Actua employees, including Actua's executive officers, were issued a certain number of shares of restricted stock in lieu of the right to receive up to a certain percentage of their respective target bonuses (ranging from 100% to 150%) in cash. The number of shares of restricted stock issued to each senior Actua employee was determined by reference to the closing price of Actua's common stock on the date of issue and the dollar amount of the target bonus potentially payable in Actua common stock. The number of each employee's restricted shares that vested in 2015, 2016 or 2017 was based on each employee's achievement percentage under the relevant performance plan. All expense related to the grant of restricted shares in connection with Actua's performance plans was recorded in the year of issuance; however, the vesting of such restricted shares occurred in the first quarter of the following year, with the exception of the 2017 grants (which vested in December 2017 in connection with the Velocity/Bolt Sale). The table below summarizes the grant and vesting of performance plan-related restricted stock grants for each of 2015, 2016 and 2017. On March 10, 2017, the Board approved and granted Actua's senior employees, including Actua's executive officers, 263,756 shares of restricted stock in relation to the Actua 2017 Performance Plan.



	Percentage of Target Bonus Potentially Payable in Restricted Stock		ACTA Stock Price at Issuance		Restricted Shares Granted	Performance Plan Achievement Percentage		Restricted Shares Vested	Restricted Shares Forfeited
Actua 2015 Performance Plan	150	%	$	16.76	316,715	83	%	175,249	141,466
Actua 2016 Performance Plan	100	%	$	8.44	419,283	60	%	251,570	167,713
Actua 2017 Performance Plan	100	%	$	13.85	263,756	100	%	263,756	—

All outstanding restricted stock awards with performance conditions vested upon the closing of the Velocity/Bolt Sale, which was deemed a change of control under the Plan.

Restricted Stock – Awards with Service Conditions

Actua granted restricted stock awards to its employees, its directors and certain employees of its consolidated businesses that vested over a period of time of employee or director service. The equity-based compensation expense for those time-based awards was recorded based on the fair value of the awards, determined by the ending price of Actua’s common stock on the date of grant. In the event that an individual terminated service with Actua (or its consolidated businesses) prior to the vesting of a time-based award, the related restricted stock awards were forfeited and equity-based compensation expense related to any forfeited award was reversed.

During February 2014, 1,377,500 shares of restricted stock were granted to certain of Actua’s employees, including Actua’s executive officers, and certain executives of Actua’s consolidated businesses. Those awards vested in equal increments each year for four years on the anniversary of the grant date. Accordingly, 344,375 and 339,375 shares of restricted stock vested during the first quarter of 2016 and 2017, respectively. During the year ended December 31, 2016, 10,000 shares related to this award were forfeited.

During January 2015, 18,200 shares of restricted stock were granted to Actua’s non-management directors in accordance with Actua’s Second Amended and Restated Non-Management Director Compensation Plan, as such has been and may be amended from time to time (the "Amended Director Plan") that took effect January 1, 2015. Those awards vested in July 2015.

During March 2015, 20,000 shares of Actua’s common stock were awarded to certain executives of Actua’s consolidated businesses; those shares were not subject to any vesting requirements. Actua recorded $0.3 million of expense during the three months ended March 31, 2015 related to those awards; the expense is included in the line item "Restricted stock" in the equity-based compensation by equity award type table above.

During June 2015, 140,416 shares of restricted stock were granted to Actua's non-management directors in accordance with the Amended Director Plan. Through the year ended December 31, 2017, 514 shares were forfeited and all other shares vested upon the closing of the Velocity/Bolt Sale, which was deemed a change of control under the Plan.

During June 2016, 72,397 shares of restricted stock with a grant date fair value of $9.02 were granted to Actua's non-management directors in accordance with the Amended Director Plan. These shares vested on the one-year anniversary of the grant date.

During June 2017, 54,310 shares of restricted stock with a grant date fair value of $13.95 were granted to Actua's non-management directors in accordance with the Amended Director Plan. These shares vested upon the closing of the Velocity/Bolt Sale, which was deemed a change of control under the Plan.

See "Non-Management Director Equity-Based Compensation - The Amended Director Plan" in this Note 11 for additional details regarding equity-based compensation awarded to Actua’s Board.

There are various other restricted stock awards that were issued in previous years to Actua employees, all of which have vested as of December 31, 2017.

All outstanding restricted stock awards with service conditions were vested upon the closing of the Velocity/Bolt Sale, which was deemed a change of control under the Plan.

SARs

Each SAR represents the right of the holder to receive, upon exercise of that SAR, shares of Actua common stock equal to the amount by which the fair market value of a share of that common stock on the date of exercise of the SAR exceeds the base price of the SAR. The base price is determined by the NASDAQ closing price of Actua’s common stock on the date of grant (or the closing price on the next trading day if there are no trades in Actua’s common stock on the date of grant). The fair value of each SAR is estimated on the grant date using the Black-Scholes option-pricing model. SARs generally vest over four years, with 25% vesting on the first anniversary of the grant date, and the remaining 75% vesting ratably each month over the subsequent 36 months.

Activity with respect to SARs during the years ended December 31, 2017, 2016 and 2015 was as follows:



	Number of SARs		Weighted average base price		Weighted average fair value
Outstanding as of December 31, 2014	548,482		$	10.62	$	5.79
Granted	1,500		$	16.69	$	8.99
Exercised ⁽¹⁾	(68,638	)	$	10.67	$	5.79
Forfeited	(1,688	)	$	9.35	$	4.95
Outstanding as of December 31, 2015	479,656		$	10.64	$	5.80
Granted	25,000		$	9.02	$	4.79
Exercised ⁽¹⁾	(191,205	)	$	9.35	$	5.07
Forfeited	(5,937	)	$	12.15	$	6.63
Outstanding as of December 31, 2016	307,514		$	11.28	$	6.16
Exercised ⁽¹⁾	(939	)	$	9.98	$	5.33
Outstanding as of December 31, 2017	306,575		$	11.28	$	6.16

______________________________


⁽¹⁾	The exercise of SARs listed above resulted in the issuance of the following shares of Actua’s common stock in those respective years:



		Number of Shares
Year ended December 31, 2015		11,261
Year ended December 31, 2016		60,219
Year ended December 31, 2017		171

The following table summarizes information about SARs outstanding as of December 31, 2017:



Grant price	Number of SARs outstanding	Number of SARs exercisable	Weighted average remaining contractual life of SARs outstanding (in years)	Aggregate intrinsic value of SARs outstanding as of December 31, 2017 (in thousands)
$6.70 - $8.76	29,950	29,950	0.72	$	215
$9.02 - $9.25	43,625	43,625	6.75	283
$11.69 - $17.31	233,000	233,000	3.27	829
	306,575	306,575		$	1,327

As of December 31, 2017, 2016 and 2015, there were, 306,575 SARs, 281,221 SARs, and 453,781 SARs exercisable, respectively, at a weighted average base price of $11.28 per share, $11.46 per share, and $10.67 per share respectively, under the Plan. All outstanding SARs vested upon the closing of the Velocity/Bolt Sale which was deemed a change of control under the Plan. The aggregate intrinsic value of the SARs outstanding as of December 31, 2017, 2016 and 2015 were $1.3 million, $0.8 million, and $0.6 million, respectively.

During the first quarter of 2018, substantially all SARs were exercised in connection with the Transaction Distribution and Actua's wind down activities.

Stock Options

The fair value of each stock option was estimated on the grant date using the Black-Scholes option-pricing model. Stock options generally vest ratably over four years: 25% vest on the first anniversary of the grant date, and the remaining 75% vest ratably each month over the subsequent 36 months.

There was no activity with respect to stock options during the years ended December 31, 2017, 2016 and 2015. There were 250 stock options outstanding as of December 31, 2017, 2016 and 2015; the aggregate intrinsic value of the stock options outstanding as of December 31, 2017, 2016 and 2015 was de minimis.

During the first quarter of 2018, all stock options were exercised.

SARs and Stock Options Fair Value Assumptions

Actua estimates the grant date fair value of SARs and stock options using the Black-Scholes option-pricing model, which requires the input of highly subjective assumptions. Those assumptions include estimating the expected life of the award and estimating the volatility of Actua’s stock price over the expected term. Expected volatility approximates the historical volatility of Actua’s common stock over the period, commensurate with the expected term of the award. Actua has sufficient historical data to calculate an expected term for SARs and stock options. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant for an instrument with a maturity that is commensurate with the expected term of the award. Changes in the above assumptions, the estimated forfeitures and/or the requisite service period can materially affect the amount of equity-based compensation recognized in Actua’s Consolidated Statements of Operations and Comprehensive Income (Loss). There were no SAR or stock option grants during the year ended December 31, 2017. The following assumptions were used to determine the fair value of SARs granted to employees by Actua during the years ended December 31, 2016 and 2015:



	Year ended December 31,
	2016		2015
Expected volatility	56	%	56	%
Average expected life of SAR (in years)	6.13		6.25
Risk-free interest rate	1.51	%	2.12	%
Dividend yield	—		—

Non-Management Director Equity-Based Compensation – The Director Plan

Actua has periodically issued DSUs and/or shares of restricted stock to its non-management directors in accordance with the Amended Director Plan. Each DSU represents a share of Actua's common stock into which that DSU will be converted upon the termination of the recipient’s service at Actua.

Non-Management Director Equity-Based Compensation – The Amended Director Plan

Pursuant to the Amended Director Plan, the compensation of Actua’s non-management directors was modified as follows for 2015: (1) the form of director retainer fee payments changed from quarterly cash payments to annual director restricted stock grants (with restricted stock with a six-month vesting period being granted in January 2015 and, thereafter, annual grants being made in connection with Actua’s annual meetings of stockholders), and (2) the number and frequency of non-management director service grant DSUs/shares of director restricted stock changed from 7,500 annually to 22,500 triennially (with 7,500 DSUs/shares of director restricted stock vesting on the one-year anniversary of the grant date, and the remaining 15,000 DSUs/shares of director restricted stock vesting in equal quarterly installments over the following two years). The annual grants of shares of director restricted stock that replaced the quarterly cash retainer fees (a) are made at the board meeting immediately following the annual meeting of stockholders, (b) are equal in value to the total amount of annual retainer fees that were previously payable for the year (based on the NASDAQ closing price of Actua’s common stock on the grant date), (c) vest on the one-year anniversary of the grant date, and (d) are not subject to a director option to receive DSUs in lieu of the shares. The Amended Director Plan was further amended and restated on January 18, 2018 as the Third Amended and Restated Non-Management Director Compensation Plan to, among other things, reduce the fees payable to Actua's non-management directors following the delisting of Actua's common stock from the NASDAQ and makes those fees payable in cash. The Amended and Restated Director Deferred Stock Unit Program was also terminated.

During January 2015, 18,200 shares of restricted stock with a grant date fair value of $16.10 were granted to Actua’s non-management directors (as discussed previously in this Note 11) representing the director retainer fee for the first half of 2015; those awards vested in July 2015.

During June 2015, 50,416 shares of restricted stock with a grant date fair value of $13.17 were granted to Actua’s non-management directors (as discussed previously in this Note 11) representing the director retainer fee for the period from the June 12, 2015 grant date through June 12, 2016; those awards vested in June 2016.

During June 2015, 90,000 shares of restricted stock and 90,000 DSUs (both with a grant date fair value of $13.17) were granted to Actua’s non-management directors, representing the directors’ triennial service awards. Through the year ended December 31, 2017, 15,000 DSUs related to this grant were forfeited and all remaining shares of restricted stock and DSUs have vested.

The following table summarizes the activity related to DSUs (excluding activity related to the Director Plan, which ended December 31, 2014) for the years ended December 31, 2017, 2016 and 2015:



	Number of shares		Weighted average grant date fair value
Issued and unvested as of December 31, 2014	22,500		$	17.63
Granted	90,000		$	13.17
Vested	(22,500	)	$	17.63
Issued and unvested as of December 31, 2015	90,000		$	13.17
Vested	(41,250	)	$	13.17
Forfeited	(15,000	)	$	13.17
Issued and unvested as of December 31, 2016	33,750		$	13.17
Vested	(33,750	)	$	13.17
Issued and unvested as of December 31, 2017	—		$	—

Expense associated with the DSUs periodically issued in lieu of cash for the years ended December 31, 2017, 2016 and 2015 was $0.4 million, $0.3 million and $0.2 million, respectively.