Note 10 – Stock-Based Compensation and Other Employee Benefit Plans

The Company has stock-based compensation plans, under which stock options, restricted stock awards and restricted stock units are reserved for issuance. The MasTec, Inc. 2013 Incentive Plan (the “2013 Incentive Plan”) permits a total of approximately 7,391,000 shares of the Company’s common stock to be issued, including approximately 5,291,000 shares that remained available under plans that were terminated upon adoption of the 2013 Incentive Plan. In addition, the Company has certain employee stock purchase plans under which shares of the Company’s common stock are available for purchase by eligible employees. The MasTec, Inc. Bargaining Units Employee Stock Purchase Plan (the “2013 Bargaining Units ESPP”) permits the issuance of up to 1,000,000 new shares of MasTec, Inc. common stock to eligible employees and the MasTec, Inc. 2011 Employee Stock Purchase Plan, as amended in 2015 (together with the 2013 Bargaining Units ESPP, the “ESPPs”) provides for the issuance of up to 2,000,000 shares of MasTec, Inc. common stock for eligible employees, of which 1,000,000 shares became available in January 2016. Under all stock-based compensation plans in effect as of December 31, 2015, there were approximately 4,795,000 shares available for future grant.

Restricted Shares

MasTec grants restricted stock awards and restricted stock units (together “restricted shares”), which are valued based on the closing share price of MasTec common stock on the date of grant. During the restriction period, holders of restricted stock awards are entitled to vote the shares. Total unearned compensation related to restricted shares as of December 31, 2015 was approximately $24.1 million, which is expected to be recognized over a weighted average period of approximately 2 years. The intrinsic value, or fair value, of restricted shares that vested, which is based on the closing share price on the date of vesting, totaled $8.1 million, $17.5 million and $2.2 million, respectively, for the years ended December 31, 2015, 2014 and 2013. During the year ended December 31, 2013, the Company entered into an agreement with the previous owners of EC Source Services, LLC (“EC Source”) to establish an incentive program for its employees and granted 350,000 restricted share awards, all of which vested on December 31, 2014. The former owners of EC Source contributed cash and shares of MasTec common stock to the Company in connection with this program.



Activity, restricted shares:	Restricted Shares		Per Share Weighted Average Grant Date Fair Value
Non-vested restricted shares, as of December 31, 2013	1,123,545		$	23.78
Granted	972,754		26.88
Vested	(659,212	)	25.27
Canceled/forfeited	(22,442	)	17.38
Non-vested restricted shares, as of December 31, 2014	1,414,645		$	25.32
Granted	706,761		17.27
Vested	(446,874	)	21.24
Canceled/forfeited	(44,300	)	26.11
Non-vested restricted shares, as of December 31, 2015	1,630,232		$	22.94

Stock Options

The Company has granted options to purchase its common stock to employees and members of the Board of Directors and affiliates under various stock option plans at not less than the fair market value of the underlying stock on the date of grant. All outstanding stock options are fully vested.



Activity, stock options:	Stock Options		Per Share Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value^(a) (in millions)
Options outstanding and exercisable as of December 31, 2013	495,571		$	11.17	1.96	$	10.7
Exercised	(210,900	)	9.97
Canceled/forfeited	—
Options outstanding and exercisable as of December 31, 2014	284,671		$	12.06	1.29	$	3.0
Exercised	(81,971	)	9.60
Canceled/forfeited	—
Options outstanding and exercisable as of December 31, 2015	202,700		$	13.06	0.55	$	0.9


(a)	Amount represents the difference between the exercise price and the closing share price of the Company’s common stock on the last trading day of the corresponding period, multiplied by the number of in-the-money options.

The total intrinsic value of options exercised which is based on the difference between the exercise price and the closing share price of the Company’s common stock as of the date of exercise, totaled $0.8 million, $6.5 million and $10.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. Proceeds from options exercised totaled $0.5 million, $0.8 million and $3.9 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Employee Stock Purchase Plans

The following table provides details pertaining to the Company’s ESPPs for the periods indicated:



	For the Years Ended December 31,
	2015		2014		2013
Cash proceeds (in millions)	$	2.0	$	3.3	$	6.4
Common shares issued	134,389		136,918		454,523
Weighted average price per share	$	14.67	$	24.33	$	14.19
Weighted average per share grant date fair value	$	4.22	$	5.81	$	5.60

Due to the delay in filing of the Company’s 2014 Form 10-K, contributions to the ESPPs were temporarily suspended in the second quarter of 2015. Contributions resumed in the third quarter of 2015.

Non-Cash Stock-Based Compensation Expense

Details of non-cash stock-based compensation expense and related tax benefits for the periods indicated were as follows (in millions):



	For the Years Ended December 31,
	2015		2014		2013
Non-cash stock-based compensation expense	$	12.4	$	15.9	$	12.9
Income Tax Effects:
Income tax benefit from non-cash stock-based compensation	$	4.2	$	8.7	$	9.7
Excess tax benefit from non-cash stock-based compensation ^(a)	$	0.1	$	3.7	$	4.3


(a)	Excess tax benefits, which represent cash flows from tax deductions in excess of the tax effect of compensation expense associated with exercised stock options and vested restricted shares, are classified as financing cash flows in the Company’s consolidated statements of cash flows.

401(k) Plan. MasTec has a 401(k) plan covering all eligible employees. Subject to certain dollar limits, eligible employees may contribute up to 75% of their pre-tax annual compensation to the 401(k) plan. The Company’s matching contribution is equal to 100% of the first 3% of the employee’s salary and 50% of the next 2% of the employee’s salary, up to a maximum 4% employer match. Discretionary matching contributions, which are payable 50% in shares of MasTec common stock and 50% in cash, are paid quarterly. During the years ended December 31, 2015, 2014 and 2013, matching contributions totaled approximately $10.2 million, $7.9 million and $5.9 million, respectively.

Deferred Compensation Plans. MasTec offers a deferred compensation plan to its highly compensated employees. These employees are allowed to contribute a percentage of their pre-tax annual compensation to the deferred compensation plan. The Company also offers a deferred compensation plan to its Board of Directors, under which directors may elect to defer the receipt of compensation for their services. Total deferred compensation plan assets, which are included within other long-term assets in the consolidated balance sheets, totaled $7.6 million and $6.2 million as of December 31, 2015 and 2014, respectively. Total deferred compensation plan liabilities, which are included within other long-term liabilities in the consolidated balance sheets, totaled $7.4 million and $6.1 million as of December 31, 2015 and 2014, respectively.