Stock-Based Compensation

3 Months Ended

Mar. 31, 2016

Stock-Based Compensation

Stock-Based Compensation

14. Stock-Based Compensation

Pursuant to the Hilltop Holdings Inc. 2012 Equity Incentive Plan (the “2012 Plan”), the Company may grant nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance awards, dividend equivalent rights and other awards to employees of the Company, its subsidiaries and outside directors of the Company. Upon the approval by stockholders and effectiveness of the 2012 Plan in September 2012, no additional awards were permissible under the 2003 Equity Incentive Plan (the “2003 Plan”). In the aggregate, 4,000,000 shares of common stock may be delivered pursuant to awards granted under the 2012 Plan. At March 31, 2016,  2,293,228 shares of common stock remained available for issuance pursuant to the 2012 Plan, including shares that may be delivered pursuant to outstanding awards. Compensation expense related to the 2012 Plan and the 2003 Plan was $2.3 million and $1.9 million during the three months ended March 31, 2016 and 2015, respectively.

During the three months ended March 31, 2016 and 2015, Hilltop granted 5,516 and 2,545 shares of common stock, respectively, to certain non-employee members of the Company’s Board of Directors for services rendered to the Company pursuant to the 2012 Plan.

Restricted Stock Awards and RSUs

The following table summarizes information about nonvested Restricted Stock Award and RSU activity for the three months ended March 31, 2016 (shares in thousands).

		Restricted Stock Awards			RSUs
			Weighted			Weighted
			Average			Average
			Grant Date			Grant Date
		Outstanding	Fair Value		Outstanding	Fair Value
Balance, December 31, 2015		453	$	13.50	875	$	21.22
	Granted	-	$	-	277	$	16.04
	Vested/Released	(3)	$	13.25	(5)	$	22.24
	Forfeited	(2)	$	19.72	(2)	$	21.41
Balance, March 31, 2016		448	$	13.47	1,145	$	20.00

Vested/Released Restricted Stock Awards and RSUs include an aggregate of 2,128 shares withheld to satisfy employee statutory tax obligations during the three months ended March 31, 2016. Pursuant to certain RSU award agreements, an aggregate of 8,247 vested RSUs at March 31, 2016 require deferral of the settlement in shares and statutory tax obligations to a future date.

At March 31, 2016, unrecognized compensation expense related to outstanding Restricted Stock Awards of $0.1 million is expected to be recognized over a weighted average period of 1.05 years.

During the three months ended March 31, 2016, the Compensation Committee of the Board of Directors of the Company awarded certain executives and key employees an aggregate of 276,551 RSUs pursuant to the 2012 Plan. These awards include 158,028 RSUs subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 118,523 RSUs that cliff vest based upon the achievement of certain performance goals over a three-year period. Total compensation expense related to these RSUs is expected to be $4.4 million, which will amortized through February 2019.

At March 31, 2016,  860,321 of the outstanding RSUs are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 284,398 outstanding RSUs cliff vest based upon the achievement of certain performance goals over a three-year period. At March 31, 2016, unrecognized compensation expense related to outstanding RSUs of $14.4 million is expected to be recognized over a weighted average period of 1.92 years.

Stock Options

Stock options granted on November 2, 2011 to two senior executives pursuant to the 2003 Plan to purchase an aggregate of 600,000 shares of the Company’s common stock (the “Stock Option Awards”) at an exercise price of $7.70 per share were fully vested and exercisable at November 2, 2015. As of March 31, 2016, an aggregate of 100,000 Stock Option Awards remain outstanding and will expire on November 2, 2016 if unexercised.