SHARE BASED COMPENSATION

Certain employees of the Company and its affiliates received awards of units in a carry unit plan of Neptune Management LP, an entity which has an ownership interest in the Company. The awards generally vest as follows: 50% on the second anniversary of June 21, 2016 for Cablevision employees or December 21, 2015 for Cequel employees ("Base Date"), 25% on the third anniversary of the Base Date, and 25% on the fourth anniversary of the Base Date. Neptune Holding US GP LLC, the general partner of Neptune Management LP, has the right to repurchase (or to assign to an affiliate, including the Company, the right to repurchase) vested awards held by employees for sixty days following their termination. For performance-based awards under the plan, vesting occurs upon achievement or satisfaction of a specified performance condition. The Company considered the probability of achieving the established performance targets in determining the share-based compensation with respect to these awards at the end of each reporting period.

Beginning on the fourth anniversary of the Base Date, the holders of carry units have an annual opportunity (a sixty day period determined by the administrator of the plan) to sell their units back to Neptune Holding US GP LLC (or affiliate, including the Company, designated by Neptune Holding US GP LLC). Accordingly, the carry units are presented as temporary equity on the consolidated balance sheets at fair value. Adjustments to fair value at each reporting period are recorded in paid-in capital.

The right of Neptune Holding US GP LLC to assign to an affiliate, including the Company, the right to repurchase an employee’s vested units during the sixty-day period following termination, or to satisfy its obligation to repurchase an employee’s vested units during annual 60 day periods following the fourth anniversary of the Base Date, may be exercised by Neptune Holding US GP LLC in its discretion at the time a repurchase right or obligation arises. The carry unit plan requires the purchase price payable to the employee or former employee, as the case may be, to be paid in cash, a promissory note (with a term of not more than 3 years and bearing interest at the long-term applicable federal rate under Section 1274(d) of the Internal Revenue Code) or combination thereof, in each case as determined by Neptune Holding US GP LLC in its discretion at the time of the repurchase. Neptune Holding US GP LLC expects that vested units will be redeemed for shares of the Company's Class A common stock upon vesting.

The following table summarizes activity relating to carry units:



	Number of Time Vesting Awards		Number of Performance Based Vesting Awards	Weighted Average Grant Date Fair Value
Balance, December 31, 2017	168,550,001		10,000,000	$	0.71
Vested	(48,337,500	)	—	0.37
Forfeited	(15,500,001	)	—	0.56
Balance, September 30, 2018	104,712,500		10,000,000	1.01

The weighted average fair value per unit was $2.28 and $2.50 as of September 30, 2018 and December 31, 2017, respectively. For the three and nine months ended September 30, 2018, the Company recognized an expense of $7,510 and $33,004 related to the push down of share-based compensation expense related to the carry unit plan. For the three and nine months ended September 30, 2017, the Company recognized an expense of $15,005 and $40,932 related to the push down of share-based compensation related to the carry unit plan.

Stock Option Plan

The following table summarizes activity related to employee stock options for the nine months ended September 30, 2018:



	Shares Under Option				Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)
	Time Vesting		Performance Based Vesting		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (a)
Balance at December 31, 2017	5,110,747		—		$	17.45	9.97	$	8,944
Granted	2,332,540		95,953		17.76
Forfeited	(496,491	)	(22,314	)	17.76
Balance at September 30, 2018	6,946,796		73,639		17.51		9.43	4,417
Options exercisable at September 30, 2018	—		—		—		—	—


(a)	The aggregate intrinsic value is calculated as the difference between the exercise price and the closing price of the Company's Class A common stock at the respective date.

The Company recognized share based compensation expense related to employee stock options for the three and nine months ended September 30, 2018 of $4,817 and $13,172, respectively.

The following weighted-average assumptions were used to calculate the fair values of stock option awards granted during the nine months ended September 30, 2018:



Risk-free interest rate		2.77%
Expected life (in years)		6.48
Dividend yield		—%
Volatility		35.23%
Grant date fair value		$7.12