19. CAPITAL STOCK AND SHARE COMPENSATION PLANS

Capital Stock

SNI’s capital structure includes common voting shares and class A common shares. The articles of incorporation provide that the holders of class A common shares, who are not entitled to vote on any other matters except as required by Ohio law, are entitled to elect the greater of three or one-third of the directors. The common voting shares and class A common shares have equal dividend distribution rights.

Incentive Plans

Our Amended LTI Plan provides for long-term equity incentive compensation for key employees and members of the Board. The Amended LTI Plan authorizes the grant of equity-based compensation to our non-employee directors, officers and other key employees in the form of incentive or non-qualified stock options, stock appreciation rights, restricted shares, RSUs, PBRSUs and other share-based awards and dividend equivalents. The Company has reserved 8.0 million class A common shares for issuance or delivery under the Amended LTI Plan.

The Amended LTI Plan will remain in effect until February 19, 2025, unless sooner terminated by the Board. Termination will not affect grants and awards then outstanding. The Amended LTI Plan replaced our LTI Plan, and no further awards will be made under the LTI Plan. However, awards granted under the LTI Plan prior to shareholder approval of the Amended LTI Plan will remain outstanding in accordance with their terms.

We satisfy stock option exercises and vested stock awards with newly-issued shares. Shares available for future share compensation grants totaled 7.9 million at December 31, 2015.

Stock Options

Stock options grant the recipient the right to purchase class A common shares at not less than 100 percent of the fair market value on the date the option is granted. Stock options granted to employees generally vest ratably over a three year period, conditioned upon the individual's continued employment through that period, while those granted to non-employee directors vest over a one year period. Stock options also generally vest immediately upon retirement, death or disability of the employee or upon a change in control of the Company or of the business in which the individual is employed. Unvested awards are forfeited if employment is terminated for other reasons. Stock options granted to employees generally have eight year terms, while those granted to non-employee directors generally vest over a one year period and have a ten year term for options granted prior to 2010. Stock options granted 2010 and later have eight year terms.

Options generally become exercisable over a three year period. Information about options outstanding and options exercisable is as follows:

(shares in thousands)	Number of Shares			Weighted-Average Exercise Price		Weighted Average Remaining Term (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2014		2,223		$	52.81
Granted in 2015		435
Exercised in 2015		(286	)
Forfeited in 2015		(1	)
Outstanding at December 31, 2015		2,371		$	57.38		4.5	$	14,936
Vested and expected to vest as of December 31, 2015		2,315		$	57.06		4.4		14,936
Options exercisable at December 31, 2015		1,660		$	50.87		3.6	$	14,936

The following table presents additional information on exercises of stock options:

	For the years ended December 31,
(in thousands)	2015		2014		2013
Cash received upon exercise	$	9,207	$	39,605	$	42,976
Intrinsic value (market value on date of exercise less exercise price)	$	6,030	$	40,961	$	25,552

Restricted Stock Units

Awards of RSUs are converted into equal number of class A common shares at the vesting date. The fair value of RSUs is based on the closing price of SNI’s class A common shares on the grant date. RSUs vest over a range of one to five years, conditioned upon the continued employment through that period. RSUs also generally vest immediately upon retirement, death or disability of the employee or upon a change in control of the Company or of the business in which the individual is employed. We expect all unvested RSUs to vest.

The following table presents additional information about RSUs:

				Grant Date Fair Value
				Weighted
(shares in thousands)	Units			Average
Unvested units at December 31, 2014		614.0		$	67.68
Awarded in 2015		346.0		$	71.01
Converted in 2015		(462.0	)	$	63.19
Forfeited in 2015		(4.0	)	$	74.03
Unvested units at December 31, 2015		494.0		$	60.26

In addition, PBRSUs that have been awarded represent the right to receive a grant of RSUs if certain performance measures are met. Each award specifies a target number of shares to be issued and the specific performance criteria that must be met. The number of shares that an employee receives may be less or more than the target number of shares depending on the extent to which the specified performance measures are attained. The shares earned are issued as RSUs following the performance period and vest over a three year service period from the date of issuance. During 2015, PBRSUs with a target of 61,390 class A common shares were granted with a weighted-average grant date fair value of $72.30 and have a two year performance period based on the Company’s cash flow initiatives. During 2014, PBRSUs with a target of 60,310 class A common shares were granted with a weighted-average grant date fair value of $85.10 and have a two year performance period based on total shareholder return. We expect all unvested PBRSUs to vest.

Share-Based Compensation

In accordance with share-based payment accounting guidance, compensation cost is based on the grant date fair value of the award. The fair value of awards that grant the employee the right to the appreciation of the underlying shares, such as stock options, is measured using a binomial lattice model. A Monte Carlo simulation model is used to determine the fair value of awards with market conditions. The fair value of awards that grant the employee the underlying shares is measured by the fair value of a class A common share of SNI stock.

Compensation costs, net of estimated forfeitures due to termination of employment or failure to meet performance targets, are recognized on a straight-line basis over the requisite service period of the award. The requisite service period is generally the vesting period stated in the award. However, because our share-based grants generally vest upon the retirement of the employee, grants to retirement-eligible employees are expensed immediately, and grants to employees who will become retirement-eligible prior to the end of the stated vesting period are expensed over such shorter period.

The weighted-average assumptions SNI used in the model are as follows:

	For the years ended December 31,
	2015			2014			2013
Weighted-average fair value of stock options granted	$	15.18		$	19.20		$	18.94
Assumptions used to determine fair value:
Dividend yield		1.28	%		0.99	%		0.95	%
Risk-free rate of return		1.49	%		1.53	%		0.84	%
Expected life of options (years)		5.0			5.0			5.0
Expected volatility		24.7	%		27.2	%		36.3	%

Dividend yield considers our historical dividend yield paid and expected dividend yield over the life of the options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected life of employee stock options represents the weighted-average period the stock options are expected to remain outstanding and is a derived output of the valuation model. Expected volatility is based on a combination of historical share price volatility for a longer period and the implied volatility of exchange-traded options on our class A common shares.

A summary of share-based compensation costs is as follows:

	For the years ended December 31,
(in thousands)	2015		2014		2013
Total share-based compensation costs	$	29,568	$	35,474	$	36,845

As of December 31, 2015, $2.0 million of total unrecognized share-based compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.4 years. In addition, $15.3 million of total unrecognized share-based compensation cost related to RSUs and PBRSUs, is expected to be recognized over a weighted-average period of 1.4 years.

Share Repurchase Program

We have share repurchase programs (“Repurchase Programs”) authorized by the Board that permit us to acquire the Company’s class A common shares. During 2015, we repurchased 4.0 million shares for $288.5 million, including 3.0 million shares repurchased for $216.8 million from Scripps family members, who are considered to be related parties. During 2014, we repurchased 15.4 million shares for $1,200.0 million, including 4.5 million shares repurchased for $339.0 million from Scripps family members. During 2013, we repurchased 3.9 million shares for $253.2 million.

As of December 31, 2015, $1,512.5 million in authorization remains available for repurchase under the existing Repurchase Programs. All shares repurchased under the Repurchase Programs are retired and returned to authorized and unissued shares. There is no expiration date for the Repurchase Programs, and we are under no commitment or obligation to repurchase any particular amount of class A common shares under the Repurchase Programs.