SHARE-BASED PAYMENT

12 Months Ended

Dec. 31, 2016

NOTE 11—SHARE-BASED PAYMENT

As of December 31, 2016, there were 8.5 million shares of stock authorized for issuance to directors, officers, and employees under the 2015 Equity Incentive Plan. At December 31, 2016, 2.9 million shares remain available for grant under the 2015 Equity Incentive Plan.

During 2016, 2015, and 2014, the Company granted stock options to executive officers under the 2015 Equity Incentive Plan and restricted shares to officers, employees, and non-employee directors, without cost to the grantee. During 2016, 2015, and 2014, the Company also granted 0.5 million, zero, and 0.6 million RSUs, respectively, to the officers and certain other employees in connection with PSPs. The Company granted the RSUs at the maximum performance thresholds for each metric each year. As of December 31, 2016, all of these RSUs are unvested and outstanding.

The performance period for the 2014 PSP concluded on December 31, 2016. The two performance goals related to the 2014 PSP were met at varying levels. Accordingly, 0.6 million shares related to the 2014 PSP vested in the first quarter of 2017. As of December 31, 2016, the Company concluded that the three performance targets related to the 2016 PSP were probable of achievement at varying levels.

The following table summarizes stock compensation expense for the years ended December 31, 2016, 2015, and 2014:


Components of stock compensation expense (in thousands)	2016		2015		2014
Restricted shares	$	10,272	$	8,214	$	7,105
Stock options		1,768		1,957		1,878
2014 PSP		3,625		3,913		1,011
2016 PSP		2,812		—		—
Total stock compensation expense	$	18,477	$	14,084	$	9,994

Excess tax benefit (shortfall) recognized	$	631	$	1,410	$	(38)

The restricted shares amounts in the table above include both equity-classified awards granted in restricted shares and liability-classified awards to be granted in restricted shares.

The following table summarizes restricted share activity for the year ended December 31, 2016:


		Weighted-
		Average
		Grant-date
Restricted Shares	Shares	Fair Value
Nonvested at January 1, 2016	1,312,774	$	19.99
Granted	645,533		21.51
Vested	(452,856)		19.38
Forfeited	(23,968)		27.78
Nonvested at December 31, 2016	1,481,483	$	20.71

The fair value of restricted share awards granted during 2016 was estimated using the closing price on the date of grant. The weighted average grant date fair values of restricted shares granted in 2015 and 2014 were $21.03 per share and $16.60 per share, respectively. The fair values of the restricted shares that vested during the years ended December 31, 2016, 2015, and 2014 were $10.3 million, $9.6 million, and $6.2 million, respectively.

As of December 31, 2016, the total unrecognized compensation cost for outstanding restricted shares was $17.5 million. As of December 31, 2016, the weighted-average period over which the unrecognized compensation cost will be recognized is 2.8 years.

The following table summarizes stock options activity for the year ended December 31, 2016:


				Weighted-
		Weighted-		Average	Aggregate
		Average		Remaining	Intrinsic
		Exercise		Contract Life	Value
Stock Options	Options	Price		(Years)	(in thousands)
Outstanding at January 1, 2016	1,106,352	$	16.30
Granted	207,180		20.40
Exercised	(18,157)		26.97
Forfeited	—		—
Expired	—		—
Outstanding at December 31, 2016	1,295,375	$	16.97	7.0	$	18,436

Exercisable at December 31, 2016	815,080	$	16.14	6.2	$	12,279

The total intrinsic value of the stock options exercised during the years ended December 31, 2016, 2015, and 2014 was $0.2 million, $2.6 million, and less than $0.1 million, respectively. We received no cash from the exercise of options for each of the years ended December 31, 2016, 2015, and 2014.

As of December 31, 2016, the total unrecognized compensation cost for outstanding options was $1.7 million. As of December 31, 2016, the weighted-average period over which the unrecognized compensation cost will be recognized is 1.7 years.

The fair value of stock option awards granted during 2016, 2015, and 2014 were estimated on the grant date using the Black-Scholes option pricing model, based on the following inputs:


	2016			2015			2014
Estimated option life		6.00 years			6.00 years			6.00 years
Risk free interest rate		1.31	%		1.68	%		1.86	%
Expected volatility		34.42	%		33.48	%		35.35	%
Expected dividend rate		0.00	%		0.00	%		0.00	%
Weighted average grant date fair value per share of options granted	$	7.21		$	5.90		$	6.35

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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