Note 4. Stock-Based Compensation

The Company has authorized common stock of 100,000,000 shares, par value $0.00001 per share.

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Total stock-based compensation expense recognized was $1.5 million and $0.6 million during the three months ended March 31, 2016 and 2015, respectively. These amounts are included in corporate expenses in the Company’s consolidated statements of operations.

The Board of Directors (“BOD”) adopted the Eldorado Resorts, Inc. 2015 Equity Incentive Plan (“2015 Plan”) on January 23, 2015 and our shareholders subsequently approved the adoption of the 2015 Plan on June 23, 2015. The Plan permits the granting of stock options, including incentive stock options (“ERI Stock Options”), stock appreciation rights (“SARs”), restricted stock or restricted stock units (“RSUs”), performance awards, and other stock-based awards and dividend equivalents. ERI Stock Options primarily vest ratably over three years and RSUs granted to employees and executive officers primarily vest and become non-forfeitable upon the third anniversary of the date of grant. RSUs granted to non-employee directors vest immediately and are delivered upon the date that is the earlier of termination of service on the BOD or the consummation of a change of control of the Company. The performance awards relate to the achievement of defined levels of performance and are generally measured over a one or two-year performance period depending upon the award agreement. If the performance award levels are achieved, the awards earned will vest and become payable at the end of the vesting period, defined as either a one or two calendar year period following the performance period. Payout ranges are from 0% up to 200% of the award target.

On January 22, 2016, the Company granted 367,519 RSUs to executive officers and 34,920 RSUs to non-employee members of the BOD under the 2015 Plan. The RSUs had a fair value of $10.77 per unit which was the NASDAQ closing price on that date. An additional 4,147 of RSUs were subsequently granted to key employees during the three months ended March 31, 2016.

A summary of the RSU activity for the three months ended March 31, 2016 is as follows:


			Weighted-Average		Weighted-Average
	Equity		Grant Date		Remaining	Aggregate
	Awards		Fair Value		Contractual Life	Fair Value
					(in years)		(in millions)
Unvested outstanding as of December 31, 2015	827,383	(1)	$	4.09	2.12		3.4
Granted	406,586	(2)		10.77
Vested	(202,431)			5.56
Unvested outstanding as of March 31, 2016	1,031,538		$	6.43	2.16	$	6.6

(1) Includes 475,409 of performance awards awarded at 135% of target and time-based awards at 100% of target.
(2) Includes 178,172 of performance awards 100% of target and 228,414 time-based awards at 100% of target.

As of March 31, 2016, the Company had approximately $5.0 million of unrecognized compensation expense related to unvested RSUs that is expected to be recognized over a weighted-average period of approximately 2.16 years.

During the first quarter of 2016, the Company’s chief operating officer terminated employment and the chief financial officer retired. In conjunction with the termination and retirement, unvested RSUs totaling 167,511, which were outstanding as of December 31, 2015, immediately vested representing an additional $0.5 million included in stock compensation expense during the first quarter of 2016. Additionally, severance costs totaling $1.4 million were recognized during the first quarter of 2016.

On September 19, 2014, as a result of the Merger, all outstanding MTR Gaming stock options (“MTR Stock Options”) vested (to the extent not already vested) and converted into an option or right to purchase the same number of shares of ERI common stock (at the same exercise price per share as in effect prior to such conversion). All other terms, except vesting requirements, applicable to such stock options remain the same.

A summary of the ERI Stock Option activity for the years ended December 31, 2014 and 2015 and the three months ended March 31, 2016 is as follows:


							Weighted-Average
		Range of			Weighted-Average		Remaining		Aggregate
	Options	Exercise Prices			Exercise Price		Contractual Life		Intrinsic Value
							(in years)		(in millions)
Outstanding and Exercisable as of December 31, 2014	398,200	$ 2.44	-	$16.27	$	6.94
Exercised
Expired	(86,000)			$11.30	$	11.30
Outstanding and Exercisable as of December 31, 2015	312,200	$ 2.44	-	$16.27	$	6.94		3.47	$	1.3
Exercised	(7,747)			$2.78	$	2.78
Outstanding and Exercisable as of March 31, 2016	304,453	$ 2.44	-	$16.27	$	7.04		3.22	$	1.4