11.

-Based Compensation

January 27, 2015,

the board of directors adopted the JMP Group LLC Amended and Restated Equity Incentive Plan (“JMP Group Plan”).

he plan maintains authorization of the issuance of

4,000,000

shares, as originally approved by shareholders on

April 12, 2007

and subsequently approved by shareholders on

June 6, 2011.

This amount is increased by any shares the Company purchases on the open market, or through any share repurchase or share exchange program, initiated by the Company unless the board of directors or its appointee determines otherwise. The Company will issue shares upon exercises or vesting from authorized but unissued shares or from treasury shares.

Options

The following table summarizes the

share option activity for the

three

months ended

March 31, 2019:

	Three Months Ended
	March 31, 2019
	Shares Subject		Weighted Average
	to Option		Exercise Price

Balance, beginning of year		1,300,000	$	6.85
Balance, end of period		1,300,000	$	6.85

Options exercisable at end of period		1,300,000	$	6.85

The following table summarizes the

share options outstanding as well as share options vested and exercisable as of

March 31, 2019:

March 31, 2019

Options Outstanding

Options Vested and Exercisable

Weighted

Average

Weighted

Average

Weighted

Range of

Remaining

Average

Aggregate

Remaining

Average

Aggregate

Exercise

Number

Contractual

Exercise

Intrinsic

Number

Contractual

Exercise

Intrinsic

Prices

Outstanding

Life in Years

Price

Value

Exercisable

Life in Years

Price

Value

$6.79 - $7.33

1,300,000

0.75

6.85

1,300,000

0.75

6.85

The Company recognizes

share-based compensation expense for share options over the vesting period using the accelerated attribution method when they are subject to graded vesting and on a straight-line basis when they are subject to cliff vesting. The Company recognized compensation expense related to share option

s of

zero

for both the

three

months ended

March 31, 2019

and

2018,

respectively.

As of

March 31, 2019,

there w

unrecognized compensation expense related to share options.

There

were

share options exercis

ed during both the

three

months ended

March 31,

and

March 31, 2018

. As a result, t

he Company did

not

recognize any current income tax benefits from the exercise of

share options.

The Company uses

the Black-Scholes option-pricing model or other quantitative models to calculate the fair value of option awards.

Restricted

Units

and Restricted Share

February 6, 2019

the Company granted approximately

280,000

RSUs to certain employees of the Company as part of the

2018

deferred compensation program.

50%

of these units will vest on

December 1, 2019

and the remaining

50%

will vest on

December 1, 2020,

subject to the grantees’ continued employment through such dates. The Company also granted RSs for new hires throughout the year.

The following table summarizes

RSU activity for the

three

months ended

March 31, 2019:

	Three Months Ended
	March 31, 2019
	Restricted			Weighted Average
	Share Units			Grant Date Fair Value

Balance, beginning of year		297,639		$	4.79
Granted		465,519			4.23
Vested		(66,067	)		4.84
Balance, end of period		697,091		$	4.41

The aggregate fair value of RSUs vested during

both the

three

months ended

March 31, 2019

and

2018

were

$320

thousand and

$88

ousand, respectively.

The income tax benefits realized from the vested RSUs were

$80

thousand

and

zero

, respectively.

The Company recognizes compensation expense for RSUs over the vesting period using the accelerated attribution method when they are subject to graded vesting and on a straight-line basis when they are subject to cliff vesting.

For the

three

months ended

March 31, 2019

and

2018,

the Company recorded compensation expenses related to RSU's of

0.3

million and

$0.4

million,

respectively.

For the

three

months ended

March 31, 2019

and

2018,

the Company recognized income tax benefits of

$120

thousand and

$58

thousand, respectively, related to the compensation expense recognized for RSUs. As of

March 31, 2019,

there was

$2.2

million of unrecognized compensation expense related to RSUs expected to be recognized over a weighted average period of

1.48

years

The Company pays cash

distribution equivalents on certain RSUs upon vesting. Distribution equivalents paid on RSUs are generally charged to retained earnings. The Company accounts for the tax benefit related to distribution equivalents paid on RSUs as an increase in additional paid-in capital.

Appreciation Rights

February 2015,

the Company granted an aggregate of

2,865,000

share appreciation rights (“SARs”) to certain employees and the Company

’s inde

pendent directors. These SARs have a base price

$7.33

per share, an exercise period of

five

years and have vested and became exercisable on

December

31,

2017

subject to the terms and conditions of the applicable grant agreements. The fair value of the SARs was determined using a quantitative model, using the following assumptions: expected life of

2.0

years, risk-free interest rate of

2.54%,

distribution yield of

18.77

and volatility of

0.00%.

The risk-free rate was interpolated from the U.S. constant maturity treasuries for a term corresponding to the maturity of the SAR. The volatility was calculated from the historical weekly share prices of the Company as of the grant date for a term corresponding to the maturity of the SAR. The distribution yield was calculated

as the sum of the last

twelve

-month distributions over the share price as of the grant date.

The following table summarizes the

SARs activity for the

three

months ended

March 31, 2019:

	Three Months Ended
	March 31, 2019
	Share Appreciation		Weighted Average
	Rights		Exercise Price

Balance, beginning of year		2,485,000	$	7.33
Balance, end of period		2,485,000	$	7.33

The following table summarizes the

share options outstanding as well as share options vested and exercisable as of

March 31, 2019:

March 31, 2019

Options Outstanding

Weighted

Average

Weighted

Remaining

Average

Aggregate

Exercise

Number

Contractual

Exercise

Intrinsic

Price

Outstanding

Life in Years

Price

Value

7.33

2,485,000

0.75

7.33

The Company recognizes compensation expense for SARs over the vesting period, through monthly mark to market of adjustments to the liability award. For the

three

months ended

March 31, 2019

and

2018,

the Company recorded compensation benefit of

zero

and

$124

thousand, respect

ively.

For both the

three

months ended

March 31, 2019

and

2018,

the Company recognized income tax benefit

ero

related to the compensation expense recognized for SARs. As of

March 31, 2019,

there was

unrecognized compensation expense related to SARs.