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 (as amended from time to time, 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, 2017, including employee stock purchase plans, there were approximately 4,811,000 shares available for future grant. In 2017, the 2013 Incentive Compensation Plan was amended to revise the amount of tax the Company can withhold for employee tax withholdings on share-based awards, as provided under ASU 2016-09.

Restricted Shares

MasTec grants restricted stock awards and restricted stock units to eligible employees and directors, 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, 2017 was approximately $20.4 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 $39.7 million, $3.5 million and $8.1 million, respectively, for the years ended December 31, 2017, 2016 and 2015.



Activity, restricted shares: ^(a)	Restricted Shares		Per Share Weighted Average Grant Date Fair Value
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
Granted	429,061		40.46
Vested	(899,815	)	28.08
Canceled/forfeited	(51,241	)	18.22
Non-vested restricted shares, as of December 31, 2017	1,448,591		$	23.29


(a)	Includes 27,550, 43,300 and 32,250 restricted stock units as of December 31, 2017, 2016 and 2015, 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,
	2017		2016		2015
Cash proceeds (in millions)	$	3.3	$	2.7	$	2.0
Common shares issued	92,145		144,183		134,389
Weighted average price per share	$	35.92	$	18.55	$	14.67
Weighted average per share grant date fair value	$	9.24	$	5.00	$	4.22

Stock Options

The Company previously granted options to purchase its common stock to employees and members of the Board of Directors and affiliates under various stock option plans. During 2016, all 202,700 remaining stock options under the previous grants were exercised at a weighted average exercise price of $13.06. The intrinsic value of options exercised, which is the difference between the exercise price and the market share price of the Company’s common stock on the date of exercise, totaled $1.8 million and $0.8 million for the years ended December 31, 2016 and 2015, respectively. Proceeds from options exercised, net of shares withheld in cashless option exercises, totaled $2.1 million and $0.5 million for the years ended December 31, 2016 and 2015, respectively.

Non-Cash Stock-Based Compensation Expense

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



	For the Years Ended December 31,
	2017		2016		2015
Non-cash stock-based compensation expense	$	15.7	$	15.1	$	12.4
Income Tax Effects:
Income tax effect of non-cash stock-based compensation	$	11.2	$	5.6	$	4.2
Excess tax benefit from non-cash stock-based compensation ^(a)	$	5.7	$	0.1	$	0.1


(a)	Excess tax benefits represent cash flows from tax deductions in excess of the tax effect of compensation expense associated with share-based payment arrangements. For the year ended December 31, 2017, the Company recognized a tax benefit of $5.4 million, net of tax deficiencies, related to the vesting of share-based payment awards.

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, 2017, 2016 and 2015, matching contributions totaled approximately $11.9 million, $11.1 million and $10.2 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 $9.4 million and $7.7 million as of December 31, 2017 and 2016, respectively. Total deferred compensation plan liabilities, which are included within other long-term liabilities in the consolidated balance sheets, totaled $9.7 million and $7.6 million as of December 31, 2017 and 2016, respectively.