Equity Based Compensation

2006 Long-Term Incentive Plan

The Delek US Holdings, Inc. 2006 Long-Term Incentive Plan, as amended (the "Plan"), allows Delek to grant stock options, SARs, restricted stock, RSUs, performance awards and other stock-based awards of up to 5,053,392 shares of Delek's common stock to certain directors, officers, employees, consultants and other individuals who perform services for Delek or its affiliates. Stock options and SARs granted under the Plan are generally granted at market price or higher. The vesting of all outstanding awards is subject to continued service to Delek or its affiliates except that vesting of awards granted to certain executive employees could, under certain circumstances, accelerate upon termination of their employment and the vesting of all outstanding awards could accelerate upon the occurrence of an Exchange Transaction (as defined in the Plan).

In the second quarter of 2010, Delek's Board of Directors and its Incentive Plan Committee began using stock-settled SARs, rather than stock options, as the primary form of appreciation award under the Plan.

Delek Logistics GP, LLC 2012 Long-Term Incentive Plan

Logistics GP maintains a unit-based compensation plan for officers, directors and employees of Logistics GP or its affiliates and any consultants, affiliates of our general partner or other individuals who perform services for Delek Logistics. The Delek Logistics GP, LLC 2012 Long-Term Incentive Plan ("Logistics LTIP") permits the grant of phantom units, unit options, restricted units, unit appreciation rights, distribution equivalent rights, unit awards, and other unit-based awards. The Logistics LTIP limits the number of units that may be delivered pursuant to vested awards to 612,207 common units, subject to proportionate adjustment in the event of unit splits and similar events. Awards granted under the Logistics LTIP will be settled with Delek Logistics units. Total compensation expense for awards granted under the Logistics LTIP amounted to $1.9 million ($1.2 million, net of taxes), $1.6 million ($1.0 million, net of taxes) and $4.2 million ($2.7 million, net of taxes) for the years ended December 31, 2015, 2014 and 2013 respectively. These amounts are included in general and administrative expenses in the accompanying consolidated statements of income.

As of December 31, 2015, there was $3.2 million of total unrecognized compensation cost related to non-vested Logistics LTIP awards, which is expected to be recognized over a weighted-average period of 1.8 years.

Option and SAR Assumptions

The table below provides the assumptions used in estimating the fair values of our outstanding stock options and SARs under the Plan. For all awards granted, we calculated volatility using historical volatility and implied volatility of a peer group of public companies using weekly stock prices.



	2015 Grants		2014 Grants		2013 Grants
	(Graded Vesting)		(Graded Vesting)		(Graded Vesting)
	4 years		4 years		4 years
Expected volatility	48.94%-52.15%		50.15%-52.63%		53.36%-53.95%
Dividend yield	2.01%-2.49%		2.54%-2.74%		1.00		%
Expected term	4.69-4.87 years		4.54-6.25 years		6.25 years
Risk free rate	0.01%-2.50%		0.01%-2.96%		0.01%-2.96%
Fair value per share	$	11.72	$	10.67	$	15.75

Stock Option and SAR Activity

The following table summarizes the stock option and SAR activity under the Plan for Delek for the years ended December 31, 2015, 2014 and 2013:



	Number of Options		Weighted-Average Strike Price		Weighted-Average Contractual Term (in years)	Average Intrinsic Value (in millions)
Options outstanding, December 31, 2012	2,558,841		$	15.67
Granted	867,400		$	33.23
Exercised	(773,186	)	$	14.07
Forfeited	(265,125	)	$	20.41
Options and SARs outstanding, December 31, 2013	2,387,930		$	22.04
Granted	1,006,100		$	30.18
Exercised	(390,753	)	$	14.27
Forfeited	(306,691	)	$	27.02
Options and SARs outstanding, December 31, 2014	2,696,586		$	25.61
Granted	953,850		$	34.42
Exercised	(344,193	)	$	18.89
Forfeited	(274,100	)	$	31.64
Options and SARs outstanding, December 31, 2015	3,032,143		$	28.60	7.9	$	15.6
Vested options and SARs exercisable, December 31, 2015	710,251		$	12.38	5.5	$	8.7

Restricted Stock Units

The Plan also provides for the award of RSUs and PRSUs to certain employees and non-employee directors. RSUs granted to employees vest ratably over three to five years from the date of grant, and RSUs granted to non-employee directors vest quarterly over the year following the date of grant. The grant date fair value of RSUs is determined based on the closing price of Delek's common stock on grant date. PRSUs initially granted to employees will typically vest in two tranches, the first of which vests on December 31 of the year following the grant date and the second on the subsequent December 31. PRSUs subsequently granted to employees will typically vest at the end of a three calendar year performance period. The number of PRSUs that will ultimately vest is based on the Company's total shareholder return over the performance period. The grant date fair value of PRSUs is determined using a Monte-Carlo simulation model. We record compensation expense for these awards based on the grant date fair value of the award, recognized ratably over the measurement period.

Performance-Based Restricted Stock Unit Assumptions

The table below provides the assumptions used in estimating the fair values of our outstanding PRSUs under the Plan. For all awards granted, we calculated volatility using historical volatility and implied volatility of a peer group of public companies using weekly stock prices.



	2015 Grants		2014 Grants
Expected volatility	37.19%-39.18%		40.26		%
Expected term	2.56-2.81		2.56
Risk free rate	0.97%-1.02%		0.72		%
Fair value per share	$	52.17	$	36.84

The following table summarizes the RSU and PRSU activity under the Plan for Delek for the years ended December 31, 2015, 2014 and 2013:



		Number of RSUs		Weighted-Average Grant Date Price
Balance	December 31, 2012	812,455		$	13.73
Granted		121,000		$	32.59
Vested		(284,786	)	$	15.02
Forfeited		(136,000	)	$	10.91
Balance	December 31, 2013	512,669		$	18.21
Granted		145,452		$	32.41
Vested		(241,122	)	$	18.17
Balance	December 31, 2014	416,999		$	23.19
Granted		192,679		$	41.23
Vested		(221,687	)	$	20.61
Forfeited		(3,424	)	$	36.53
Balance	December 31, 2015	384,567		$	33.60

Compensation Expense Related to Equity-based Awards Granted Under the Plan

Total compensation expense for the equity-based awards amounted to $14.7 million ($9.6 million, net of taxes), $11.9 million ($7.7 million, net of taxes) and $9.3 million ($6.0 million, net of taxes) for the years ended December 31, 2015, 2014 and 2013, respectively. These amounts are included in general and administrative expenses in the accompanying consolidated statements of income. We recognized a total income tax benefit for equity-based awards of $1.3 million, $1.8 million and $5.9 million for the years end December 31, 2015, 2014 and 2013, respectively.

As of December 31, 2015, there was $26.9 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 2.0 years.

The aggregate intrinsic value, which represents the difference between the underlying stock's market price and the award's exercise price, of the share-based awards exercised or vested during the years ended December 31, 2015, 2014 and 2013 was $13.3 million, $13.9 million and $10.9 million, respectively. During the years December 31, 2015, 2014 and 2013, respectively, we issued 309,196, 408,418 and 609,559 shares of common stock as a result of exercised or vested equity-based awards. These amounts are net of 256,684, 223,457 and 448,413 shares, respectively, withheld to satisfy employee tax obligations related to the exercises and vestings for the years ended December 31, 2015, 2014 and 2013. Delek paid approximately $4.4 million, $5.2 million and $2.5 million of taxes in connection with the settlement of these awards for the years ended December 31, 2015, 2014 and 2013. We issue new shares of common stock upon exercise or vesting of share-based awards.

Granting of GP Interest

On March 10, 2013, we granted membership interests in Logistics GP, the general partner of Delek Logistics, to certain executives, including our CEO. These interests consisted of a total 1.4% membership interest in Logistics GP and vested on June 10, 2013. On December 10, 2013, we granted Mr. Yemin an additional 4.0% membership interest in Logistics GP, half of which vested immediately. Subject to Mr. Yemin's continued employment with Delek, 0.50% vested on June 10, 2014 and 0.25% will vest every six months thereafter through June 10, 2017. Total compensation expense recognized for these grants amounted to $0.2 million ($0.1 million, net of taxes), $0.4 million ($0.3 million, net of taxes) and $1.5 million ($1.0 million, net of taxes) for the years ended December 31, 2015, 2014 and 2013. As of December 31, 2015, there was $0.3 million of total unrecognized compensation cost related to non-vested GP membership interests, which is expected to be recognized over a weighted-average period of 1.4 years.