STOCK BASED COMPENSATION

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Equity-Based Compensation

In April 2013, we adopted the Taylor Morrison Home Corporation 2013 Omnibus Equity Award Plan (the "Plan"). The Plan was most recently amended and restated in May 2017. The Plan provides for the grant of stock options, RSUs and other equity-based awards deliverable in shares of our Common Stock. As of March 31, 2020, we had an aggregate of 5,714,011 shares of Common Stock available for future grants under the Plan.

The following table provides information regarding the amount and components of stock-based compensation expense, all of which is included in general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations (in thousands):



	Three Months Ended March 31,
	2020		2019
Restricted stock units ^{(1), (2)}	$	7,719	$	2,514
Stock options	4,177		903
Total stock compensation	$	11,896	$	3,417

⁽¹⁾Includes compensation expense related to time-based RSUs and performance-based RSUs. Outstanding performance-based RSUs reflected in the table above are reported at target level of performance.

⁽²⁾Stock-based compensation expense in 2020 includes $5.5 million of expense recognized for equity awards associated with the acquisition of WLH, which were converted from WLH to TMHC equity awards.

At March 31, 2020 and December 31, 2019, the aggregate unrecognized value of all outstanding stock-based compensation awards was approximately $41.9 million and $20.8 million, respectively. The aggregate unrecognized value as of March 31, 2020 includes the stock-based compensation expense relating to the acquisition of WLH.

Restricted Stock Units – The following table summarizes the time-based RSU and performance-based RSU activity for the three months ended March 31, 2020:



	Units		Weighted Average Grant Date Fair Value
Balance at December 31, 2019	1,708,393		$	19.06
Granted	663,964		24.80
Vested	(619,402	)	17.27
Forfeited ⁽¹⁾	(3,497	)	18.24
Balance at March 31, 2020⁽²⁾	1,749,458		$	21.99

⁽¹⁾Forfeitures on time-based RSUs are a result of terminations of employment, while forfeitures on performance-based RSUs are a result of failing to attain certain goals as outlined in our stock based compensation awards or termination of employment. Outstanding performance-based RSUs reflected in the table above are reported at target level of performance.

⁽²⁾ The balance as of March 31, 2020 excludes 192,017 unvested RSUs relating to the acquisition of WLH.

During the three months ended March 31, 2020, we granted time-based RSU awards and performance-based RSU awards to certain employees.

Our time-based RSUs consist of awards that settle in shares of Common Stock and have been awarded to our employees and members of our Board of Directors. Vesting of these RSUs is subject to continued employment with TMHC or an affiliate, or continued service on the Board of Directors, through the applicable vesting dates. Time-based RSUs granted to employees generally vest ratably over a three to four year period, based on the grant date. Time-based RSUs granted to members of the Board of Directors generally vest on the first anniversary of the grant date.

Additionally, we granted performance-based RSUs to certain employees of the Company. These awards will vest in full based on the achievement of certain performance goals over a three-year performance period, subject to the employee’s continued employment through the date the Compensation Committee certifies the applicable level of performance achieved and will be settled in shares of our Common Stock. The number of shares that may be issued in settlement of the performance-based RSUs to the award recipients may be greater or less than the target award amount depending on actual performance achieved as compared to the performance targets set forth in the awards.

Stock Options – The following table summarizes the stock option activity for the three months ended March 31, 2020:



	Units		Weighted Average Exercise Price Per Share
Outstanding at December 31, 2019	3,339,244		$	18.98
Granted⁽¹⁾	828,253		21.95
Exercised	(250,149	)	18.16
Canceled/Forfeited⁽¹⁾	(14,685	)	18.68
Outstanding at March 31, 2020⁽²⁾	3,902,663		$	19.67
Options exercisable at March 31, 2020⁽²⁾	1,940,328		$	18.64

⁽¹⁾Excludes the number of options granted and canceled in the same period.

⁽²⁾Amount excludes 282,470 of outstanding and exercisable options relating to the acquisition of WLH.

Options granted to employees generally vest and become exercisable ratably on the first, second, third, and fourth anniversary of the date of grant. Options granted to members of the Board of Directors vest and become exercisable ratably on the first, second and third anniversary of the date of grant. Vesting of the options is subject to continued employment with TMHC or an affiliate, or continued service on the Board of Directors, through the applicable vesting dates, and options expire within ten years from the date of grant.