Prior to the Company’s restructuring and IPO, the business operated as a partnership and its ownership structure was comprised of common partners (principally outside investors) holding units. The common partners contributed capital to the partnership and were not subject to vesting. Units granted to Managing Directors upon joining the Company and as part of annual incentive compensation generally vested based on service over five to eight years. Certain non-Managing Director employees were granted units as part of their incentive arrangements and these units generally vested based on service ratably over four years. In connection with the Company’s restructuring and IPO, substantially all of the Managing Director partner equity subject to vesting was accelerated. Units granted to non-Managing Director employees were not accelerated in connection with the Company’s restructuring and IPO and continue to vest based on the original terms of the grant.

In connection with the reorganization and IPO, Group LP issued Class A partnership units to Moelis & Company and to certain existing unit holders. Following the reorganization, a Group LP Class A partnership unit (not held by Moelis & Company or its subsidiaries) is exchangeable into one share of Moelis & Company Class A common stock and represents the Company’s noncontrolling interests. As of March 31, 2019, partners held 13,053,465 Group LP partnership units, 96,138 of which were unvested and will continue to vest over their service life.

In relation to the vesting of Class A partnership units, the Company recognized compensation expenses of $109 and $459 for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, there was $141 of unrecognized compensation expense related to unvested Class A partnership units which is expected to be recognized over a weighted-average period of 0.4 years, using the graded vesting method.

In connection with the IPO, the Company adopted the Moelis & Company 2014 Omnibus Incentive Plan (the “Plan”) to provide additional incentives to selected officers, employees, Managing Directors, non-employee directors, independent contractors, partners, senior advisors and consultants. The Plan provides for the issuance of incentive stock options (“ISOs”), nonqualified stock options, stock appreciation rights (“SARs”), restricted stock, RSUs, stock bonuses, other stock-based awards and cash awards.

In the first quarter of 2015, the Board of Directors authorized the repurchase of up to $25 million of shares of Class A common stock of the Company and/or Class A partnership units of Group LP with no expiration date. Under this share repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of shares repurchased will be opportunistic and measured in nature and will depend on a variety of factors, including price and market conditions. In February 2019, the Board of Directors authorized the repurchase of up to $100 million of shares of Class A common stock and/or Class A partnership units of Group LP with no expiration date. This new authorization replaced the former repurchase program and the remaining authorization under the program was eliminated. Under this share repurchase program, shares may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise. The timing and the actual number of shares repurchased will be opportunistic and measured in nature and will depend on a variety of factors, including price and market conditions. As of March 31, 2019, $100.0 million of shares may yet be purchased under the program.

Pursuant to the Plan and in connection with the Company’s annual compensation process and ongoing hiring process, the Company issues RSUs which generally vest over a service life of four to five years. For the three months ended March 31, 2019 and 2018, the Company recognized expense of $38,282 and $31,180, respectively.

The following table summarizes activity related to restricted stock and RSUs for the three months ended March 31, 2019 and 2018.

	Restricted Stock & RSUs
	2019					2018
				Weighted					Weighted
				Average					Average
	Number of			Grant Date		Number of			Grant Date
	Shares			Fair Value		Shares			Fair Value
Unvested Balance at January 1,		8,761,224		$	37.59		9,357,999		$	30.15
Granted		3,495,863			46.08		2,715,840			54.26
Forfeited		(14,415	)		46.84		(46,306	)		37.41
Vested		(2,787,084	)		36.62		(2,197,193	)		32.23
Unvested Balance at March 31,		9,455,588		$	41.04		9,830,340		$	36.23

As of March 31, 2019, the total compensation expense related to unvested restricted stock and RSUs not yet recognized was $208,908. The weighted-average period over which this compensation expense is expected to be recognized at March 31, 2019 is 2.0 years.

Pursuant to the Plan, the Company issued 3,501,881 stock options in 2014 which vest over a five-year period. The Company estimated the fair value of stock option awards at grant using the Black-Scholes valuation model with the following assumptions:

	Assumptions
Expected life (in years)		6
Weighted-average risk free interest rate		1.91	%
Expected volatility		35	%
Dividend yield		2.72	%
Weighted-average fair value at grant date	$	6.70

The Company paid special dividends of $8.30, in aggregate, through March 31, 2019. As required under Section 5 of the Company’s 2014 Omnibus Incentive Plan, the Compensation Committee of the Company’s Board of Directors equitably reduced the exercise price of the Company’s outstanding options to purchase common stock by $8.30 from $25.00 per share to $16.70 per share.

The following table summarizes activity related to stock options for the three months ended March 31, 2019 and 2018.

	Stock Options Outstanding
	2019					2018
				Weighted					Weighted
				Average					Average
	Number			Exercise Price		Number			Exercise Price
	Outstanding			Per Share		Outstanding			Per Share
Outstanding at January 1,		2,017,067		$	16.70		2,436,232		$	16.70
Exercises		(29,439	)		16.70		(18,494	)		16.70
Forfeitures or expirations		(2,000	)		16.70		(12,000	)		16.70
Outstanding at March 31,		1,985,628		$	16.70		2,405,738		$	16.70

For the three months ended March 31, 2019 and 2018, the Company recognized expenses of $495 and $605, respectively, in relation to these stock options. As of March 31, 2019, the total compensation expense related to unvested stock options not yet recognized was $122. The weighted-average period over which this compensation expense is expected to be recognized at March 31, 2019 is 0.1 years.