SHARE-BASED PAYMENT

12 Months Ended

Dec. 31, 2019

SHARE-BASED PAYMENT

Share-Based Payment

NOTE 10—SHARE-BASED PAYMENT

As of December 31, 2019, there were 8.5 million shares of stock authorized for issuance to directors, officers, and employees under the 2015 Equity Incentive Plan (and predecessor plans). At December 31, 2019, 0.8 million shares remain available for grant under the 2015 Equity Incentive Plan.

Under the 2015 Equity Incentive Plan, the Company granted stock options to executive officers during 2017 and restricted shares to executive officers, employees, and non-employee directors during 2019, 2018, and 2017, all without cost to the grantee. During 2019, 2018, and 2017, the Company also granted 0.3 million, 0.3 million, and 0.3 million RSUs,

respectively, to the executive officers and certain other employees in connection with PSPs (“performance awards”). The Company granted the RSUs at the maximum performance thresholds for each metric each year. As of December 31, 2019, the RSUs issued in connection with the 2019, 2018, and 2017 PSPs are unvested and outstanding.

The performance period for the 2016 PSP concluded on December 31, 2018. The three performance goals related to the 2016 PSP were met at varying levels. Accordingly, 0.5 million shares related to the 2016 PSP vested in the first quarter of 2019. As of December 31, 2019, the Company concluded that the three performance targets related to the 2017 PSP and 2019 PSP were probable of achievement at varying levels and one performance target related to the 2018 PSP was probable of achievement at the target level. As of December 31, 2018, the Company concluded that the three performance targets related to the 2016 PSP and 2017 PSP were probable of achievement at varying levels and one performance target related to the 2018 PSP was probable of achievement at the target level.

The following table summarizes stock compensation expense for the years ended December 31, 2019, 2018, and 2017:

Components of stock compensation expense (in thousands)	2019		2018		2017
Restricted shares	$	17,818	$	14,741	$	12,336
Stock options		625		1,124		1,570
PSP "RSUs"		5,632		8,094		7,228
Total stock compensation expense	$	24,075	$	23,959	$	21,134
Excess tax benefit recognized	$	4,632	$	6,848	$	9,545

The amounts attributable to restricted shares in the table above include both equity-classified awards granted in restricted shares and liability-classified awards to be granted in restricted shares. The excess tax benefits recognized above reduced income tax expense.

The following table summarizes restricted share activity for the year ended December 31, 2019:

		Weighted-
		Average
		Grant-date
Restricted Shares Activity	Shares	Fair Value
Nonvested at January 1, 2019	1,171,018	$	37.32
Granted	486,173		54.52
Vested	(563,736)		30.81
Forfeited	(8,079)		41.17
Nonvested at December 31, 2019	1,085,376	$	48.39

The fair value of restricted share awards granted during 2019 was estimated using the closing price on the date of grant. The weighted average grant date fair values of restricted shares granted in 2018 and 2017 were $52.25 per share and $41.15 per share, respectively. The fair values of the restricted shares that vested during the years ended December 31, 2019, 2018, and 2017 were $30.5 million, $29.6 million, and $21.2 million, respectively.

As of December 31, 2019, the total unrecognized compensation cost for outstanding restricted shares was $28.7 million. As of December 31, 2019, the weighted-average period over which this unrecognized compensation cost will be recognized is 3.1 years.

The following table summarizes activity related to performance awards for the year ended December 31, 2019:

		Weighted-
		Average
		Grant-date
Restricted Share Units Activity	Share Units	Fair Value
Nonvested at January 1, 2019	1,098,612	$	35.54
Granted	295,851		52.84
Vested	(488,787)		23.92
Forfeited	(15,627)		23.92
Nonvested at December 31, 2019	890,049	$	47.87

The fair value of performance awards granted during 2019 was estimated using the closing price on the date of grant. The weighted average grant date fair values of performance awards granted in 2018 and 2017 were $49.72 per share and $41.79 per share, respectively. The fair value of the performance awards that vested during the year ended December 31, 2019 was $26.6 million. The fair value of the performance awards that vested during the year ended December 31, 2017 was $23.1 million. There were no performance awards that vested during the year ended December 31, 2018.

As of December 31, 2019, the total unrecognized compensation cost for outstanding performance awards was $6.5 million. As of December 31, 2019, the weighted-average period over which this unrecognized compensation cost will be recognized is 3.0 years. The unrecognized compensation cost is based on the achievement levels that are probable as of December 31, 2019.

The following table summarizes stock options activity for the year ended December 31, 2019:

				Weighted-
		Weighted-		Average	Aggregate
		Average		Remaining	Intrinsic
		Exercise		Contract Life	Value
Stock Options Activity	Options	Price		(Years)	(in thousands)
Outstanding at January 1, 2019	1,048,264	$	19.76
Granted	—		—
Exercised	(65,182)		20.29
Forfeited	—		—
Expired	—		—
Outstanding at December 31, 2019	983,082	$	19.72	4.6	$	44,199
Exercisable at December 31, 2019	945,506	$	18.92	4.5	$	43,265

The total intrinsic value of the stock options exercised during the years ended December 31, 2019, 2018, and 2017 was $2.7 million, $13.5 million, and $0.4 million, respectively. We received no cash from the exercise of options for each of the years ended December 31, 2019, 2018, and 2017.

As of December 31, 2019, the total unrecognized compensation cost for outstanding options was $0.1 million. As of December 31, 2019, the weighted-average period over which the unrecognized compensation cost will be recognized is 0.1 years.

The Company did not grant any stock option awards in 2019 or 2018. The fair value of stock option awards granted during 2017 was estimated on the grant date using the Black-Scholes option pricing model, based on the following inputs:

Inputs into Black-Scholes Option Pricing Model	2017
Estimated option life (years)		6.00
Risk free interest rate		2.04	%
Expected volatility		35.34	%
Expected dividend rate		0.00	%
Strike price	$	39.82
Weighted average grant date fair value per share of options granted	$	14.98