The Delek US Holdings, Inc. 2006 Long-Term Incentive Plan, as amended (the "2006 Plan"), allowed Delek to grant stock options, SARs, restricted stock, RSUs, performance awards and other stock-based awards of up to 5,053,392 shares of Delek's common stock to certain directors, officers, employees, consultants and other individuals who performed services for Delek or its affiliates. Stock options and SARs granted under the 2006 Plan were generally granted at market price or higher. The vesting of all outstanding awards was subject to continued service to Delek or its affiliates except that vesting of awards granted to certain executive employees could, under certain circumstances, accelerate upon termination of their employment and the vesting of all outstanding awards could accelerate upon the occurrence of an Exchange Transaction (as defined in the 2006 Plan). In the second quarter of 2010, Delek's Board of Directors and its Incentive Plan Committee began using stock-settled SARs, rather than stock options, as the primary form of appreciation award under the 2006 Plan. The 2006 Plan expired in April 2016.

On May 5, 2016, our stockholders approved our 2016 Long-Term Incentive Plan (the “2016 Plan”). The 2016 Plan succeeds our 2006 Plan, which expired in April 2016. The 2016 Plan allows Delek to grant stock options, SARs, restricted stock, RSUs, performance awards and other stock-based awards of up to 4,400,000 shares of Delek's common stock to certain directors, officers, employees, consultants and other individuals who perform services for Delek or its affiliates. On May 18, 2018, the Company's stockholders approved an amendment to the 2016 plan that increased the number of Common Stock available under this plan by 4,500,000 shares to 8,900,000 shares. Stock options and SARs issued under the 2016 Plan are granted at prices equal to (or greater than) the fair market value of Delek's common stock on the grant date and are generally subject to a vesting period of one year or more. No awards will be made under the 2016 Plan after May 5, 2026.

In connection with the Delek/Alon Merger, Delek assumed the Alon USA Energy, Inc. Second Amended and Restated 2005 Incentive Compensation Plan (“the Alon 2005 Plan” and, collectively with the 2006 Plan and the 2016 Plan, the "Incentive Plans" ) as a component of its overall executive incentive compensation program. The Alon 2005 Plan permits the granting of awards to Alon's officers and key employees in the form of options to purchase common stock, stock appreciation rights, restricted shares of common stock, restricted common stock units, performance shares, performance units and senior executive plan bonuses. Effective with the Delek/Alon Merger, all contractually unvested share-based awards were converted into share-based awards denominated in New Delek Common Stock. Committed but unissued share-based awards were exchanged and converted into rights to receive share-based awards indexed to New Delek Common Stock.

The table below provides the assumptions used in estimating the fair values of our outstanding stock options and SARs under the Incentive Plans. For all awards granted, we calculated volatility using historical volatility and implied volatility of a peer group of public companies using weekly stock prices.



	2018 Grants		2017 Grants		2016 Grants
	(Graded Vesting)		(Graded Vesting)		(Graded Vesting)
	4 years		4 years		4 years
Expected volatility	47.52%-49.42%		47.49%-49.18%		51.31%-54.12%
Dividend yield	2.00%-2.33%		2.41%-3.72%		1.84%-3.72%
Expected term	4.38-4.62 years		4.37-4.82 years		4.75-4.87 years
Risk free rate	1.56%-2.92%		0.60%-2.58%		0.18%-2.47%
Fair value per share	$	15.00	$	8.08	$	5.67



	Number of Options		Weighted-Average Strike Price		Weighted-Average Contractual Term (in years)	Average Intrinsic Value (in millions)
Options outstanding, December 31, 2015	3,032,143		$	28.60
Granted	347,800		$	16.26
Exercised	(68,510	)	$	14.69
Forfeited	(743,050	)	$	31.17
Options and SARs outstanding, December 31, 2016	2,568,383		$	26.56
Granted	2,460,500		$	25.95
Exercised	(303,049	)	$	17.04
Forfeited	(534,827	)	$	28.00
Options and SARs outstanding, December 31, 2017	4,191,007		$	26.71
Granted	1,497,400		$	43.49
Exercised	(1,286,527	)	$	30.55
Forfeited	(827,775	)	$	29.01
Options and SARs outstanding, December 31, 2018	3,574,105		$	32.67	8.4	$	42.7
Vested options and SARs exercisable, December 31, 2018	768,955		$	26.40	6.7	$	4.7

The Incentive Plans provide for the award of RSUs and PRSUs to certain employees and non-employee directors. RSUs granted to employees vest ratably over three to five years from the date of grant, and RSUs granted to non-employee directors vest quarterly over the year following the date of grant. The grant date fair value of RSUs is determined based on the closing price of Delek's common stock on the grant date. PRSUs initially granted to employees will typically vest in two tranches, the first of which vests on December 31 of the year following the grant date and the second on the subsequent December 31. PRSUs subsequently granted to employees will typically vest at the end of a three calendar year performance period. The number of PRSUs that will ultimately vest is based on the Company's total shareholder return over the performance period. The grant date fair value of PRSUs is determined using a Monte-Carlo simulation model. We record compensation expense for these awards based on the grant date fair value of the award, recognized ratably over the measurement period.

The table below provides the assumptions used in estimating the fair values of our outstanding PRSUs under the Plan. For all awards granted, we calculated volatility using historical volatility and implied volatility of a peer group of public companies using weekly stock prices.



	2018 Grants		2017 Grants		2016 Grants
Expected volatility	36.11%-44.66%		44.03%-46.54%		41.77		%
Expected term	2.06-2.81		2.06-3.06		2.81
Risk free rate	2.40%-2.73%		1.43%-1.93%		1.08		%
Fair value per share	$	57.93	$	37.80	$	14.31



		Number of RSUs		Weighted-Average Grant Date Price
Balance	December 31, 2015	384,567		$	33.6
Granted		858,296		$	12.94
Vested		(246,657	)	$	21.17
Forfeited		(114,393	)	$	17.23
Balance	December 31, 2016	881,813		$	19.08
Granted		614,035		$	31.56
Vested		(351,713	)	$	21.95
Forfeited		(78,676	)	$	13.44
Performance Not Achieved		(5,789	)	$	38.03
Balance	December 31, 2017	1,059,670		$	25.68
Granted		440,896		$	53.10
Vested		(341,774	)	$	25.62
Forfeited		(154,780	)	$	36.96
Balance	December 31, 2018	1,004,012		$	36.00

Compensation expense for Delek equity-based awards amounted to $20.9 million ($16.5 million, net of taxes), $15.9 million ($10.3 million, net of taxes) and $14.6 million ($9.5 million, net of taxes) for the years ended December 31, 2018, 2017 and 2016, respectively. These amounts, excluding amounts related to discontinued operations of $1.1 million for December 31, 2016, are included in general and administrative expenses in the accompanying consolidated statements of income. We recognized income tax benefits for equity-based awards of $2.2 million and $1.4 million for the years ended December 31, 2018 and 2017, respectively, versus income tax expense for equity-based awards of $2.9 million for the year ended December 31, 2016.

As of December 31, 2018, there was $48.4 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements, which is expected to be recognized over a weighted-average period of 2.4 years.

The aggregate intrinsic value, which represents the difference between the underlying stock's market price and the award's exercise price, of the share-based awards exercised or vested during the years ended December 31, 2018, 2017 and 2016 was $39.4 million, $12.2 million and $4.8 million, respectively. During the years December 31, 2018, 2017 and 2016, respectively, we issued 580,455, 332,156 and 203,631 shares of common stock as a result of exercised or vested equity-based awards. These amounts are net of 1,027,398, 306,659 and 111,536 shares, respectively, withheld to satisfy employee tax obligations related to the exercises and vestings for the years ended December 31, 2018, 2017 and 2016. Delek paid approximately $11.5 million, $5.0 million and $1.5 million of taxes in connection with the settlement of these awards both for the years ended December 31, 2018, 2017 and 2016. We issue new shares of common stock upon exercise or vesting of share-based awards.