Note 9 – Stock-Based Compensation and Other Employee Benefit Plans

The Company’s stock-based compensation plans, under which shares of the Company’s common stock are reserved for issuance, include: the MasTec, Inc. 2013 Incentive Compensation Plan (the “2013 Incentive Plan”), the MasTec, Inc. Bargaining Units Employee Stock Purchase Plan (the “2013 Bargaining Units ESPP”) and the MasTec, Inc. 2011 Amended and Restated Employee Stock Purchase Plan (the “2011 ESPP,” and together with the 2013 Bargaining Units ESPP, the “ESPPs”). The 2013 Incentive Plan permits a total of approximately 7,391,000 shares of the Company’s common stock to be issued. Under the Company’s ESPPs, shares of the Company’s common stock are available for purchase by eligible employees, which collectively permit the issuance of up to 3,000,000 new shares of MasTec, Inc. common stock. Under all stock-based compensation plans in effect as of December 31, 2016, there were approximately 5,148,000 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 market share price of MasTec common stock (the “market price”) 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, 2016 was approximately $18.7 million, which is expected to be recognized over a weighted average period of approximately 1.5 years. The intrinsic value of restricted shares that vested, which is based on the market price on the date of vesting, totaled $3.5 million, $8.1 million and $17.5 million, respectively, for the years ended December 31, 2016, 2015 and 2014.



Activity, restricted shares: ^(a)	Restricted Shares		Per Share Weighted Average Grant Date Fair Value
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
Granted	637,332		17.69
Vested	(188,386	)	20.42
Canceled/forfeited	(108,592	)	20.71
Non-vested restricted shares, as of December 31, 2016	1,970,586		$	21.61


(a)	Includes 43,300, 32,250 and 34,250 restricted stock units as of December 31, 2016, 2015 and 2014, respectively.

Stock Options

As of December 31, 2016, all stock options that were outstanding under previous stock option grants had been exercised.



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, 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
Exercised	(202,700	)	13.06
Canceled/forfeited	—
Options outstanding and exercisable as of December 31, 2016	—		$	—	—	$	—


(a)	Amount represents the difference between the exercise price and the market 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 intrinsic value of options exercised, which is based on the difference between the exercise price and the market price of the Company’s common stock on the date of exercise, totaled $1.8 million, $0.8 million and $6.5 million for the years ended December 31, 2016, 2015 and 2014, respectively. Proceeds from options exercised, net of cashless option exercises, totaled $2.1 million, $0.5 million and $0.8 million for the years ended December 31, 2016, 2015 and 2014, 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,
	2016		2015		2014
Cash proceeds (in millions)	$	2.7	$	2.0	$	3.3
Common shares issued	144,183		134,389		136,918
Weighted average price per share	$	18.55	$	14.67	$	24.33
Weighted average per share grant date fair value	$	5.00	$	4.22	$	5.81

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,
	2016		2015		2014
Non-cash stock-based compensation expense	$	15.1	$	12.4	$	15.9
Income Tax Effects:
Income tax benefit from non-cash stock-based compensation	$	5.6	$	4.2	$	8.7
Excess tax benefit from non-cash stock-based compensation ^(a)	$	0.1	$	0.1	$	3.7


(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, 2016, 2015 and 2014, matching contributions totaled approximately $11.1 million, $10.2 million and $7.9 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 $7.7 million and $7.6 million as of December 31, 2016 and 2015, respectively. Total deferred compensation plan liabilities, which are included within other long-term liabilities in the consolidated balance sheets, totaled $7.6 million and $7.4 million as of December 31, 2016 and 2015, respectively.