Note 10. Share-Based Compensation

On June 30, 2015, the Company had one share-based compensation plan, the Amended and Restated City National Corporation 2008 Omnibus Plan (the “Plan”), which was originally approved by the Company’s shareholders on April 23, 2008. No new awards have been or will be granted under predecessor plans since the adoption of the Plan. The Plan permits the grant of stock options, restricted stock, restricted stock units, cash-settled restricted stock units, performance shares, performance share units, performance units and stock appreciation rights, or any combination thereof, to the Company’s eligible employees and non-employee directors. No grants of performance shares, performance share units or stock appreciation rights had been made as of June 30, 2015. At June 30, 2015, there were approximately 2.4 million shares available for future grants. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 for further discussion of the Company’s share-based compensation plan.

The compensation cost that has been recognized for all share-based awards was $5.0 million and $11.2 million for the three and six months ended June 30, 2015, respectively, compared with $5.2 million and $10.6 million for the three and six months ended June 30, 2014. The total income tax benefit recognized in the consolidated statements of income for share-based compensation arrangements was $2.1 million and $4.7 million for the three and six months ended June 30, 2015, respectively, compared with $2.2 million and $4.5 million for the three and six months ended June 30, 2014. The Company received $29.0 million and $16.4 million in cash for the exercise of stock options during the six months ended June 30, 2015 and 2014, respectively. The actual tax benefit realized for the tax deductions from stock option exercises was $6.1 million and $2.2 million for the six months ended June 30, 2015 and 2014, respectively.

To estimate the fair value of stock option awards, the Company uses the Black-Scholes methodology, which incorporates the assumptions summarized in the table below:

	For the three months ended June 30,				For the six months ended June 30,
	2015		2014		2015		2014
Weighted-average volatility	26.48	%	27.15	%	26.66	%	27.35	%
Dividend yield	1.53	%	1.78	%	1.55	%	1.79	%
Expected term (in years)	5.45		5.46		6.05		6.06
Risk-free interest rate	1.79	%	1.92	%	1.78	%	1.99	%

Using the Black-Scholes methodology, the weighted-average grant-date fair values of options granted during the six months ended June 30, 2015 and 2014 were $21.80 and $17.93, respectively. The total intrinsic value of options exercised during the six months ended June 30, 2015 and 2014 was $14.8 million and $5.2 million, respectively.

A summary of option activity and related information for the six months ended June 30, 2015 is presented below:

			Weighted-				Weighted-
			Average		Aggregate		Average
	Number of		Exercise		Intrinsic		Remaining
	Shares		Price		Value		Contractual
Options	(in thousands)		(per share)		(in thousands) (1)		Term
Outstanding at January 1, 2015	3,971		$	57.40
Granted	376		90.47
Exercised	(485	)	59.81
Forfeited or expired	(28	)	66.45

Outstanding at June 30, 2015	3,834		$	60.27	$	115,498	5.58

Exercisable at June 30, 2015	2,699		$	55.64	$	93,793	4.37

(1)	Includes in-the-money options only.

A summary of changes in unvested options and related information for the six months ended June 30, 2015 is presented below:

			Weighted-Average
	Number of		Grant Date
	Shares		Fair Value
Unvested Options	(in thousands)		(per share)
Unvested at January 1, 2015	1,269		$	14.80
Granted	376		21.80
Vested	(492	)	14.82
Forfeited	(18	)	14.96

Unvested at June 30, 2015	1,135		$	17.11

The number of options vested during the six months ended June 30, 2015 and 2014 was 492,108 and 518,620, respectively. The total fair value of options vested during the six months ended June 30, 2015 and 2014 was $7.3 million and $7.6 million, respectively. As of June 30, 2015, there was $14.8 million of unrecognized compensation cost related to unvested stock options granted under the Company’s plans. That cost is expected to be recognized over a weighted-average period of 2.8 years.

A summary of changes in restricted stock and related information for the six months ended June 30, 2015 is presented below:

			Weighted-Average
	Number of		Grant Date
	Shares		Fair Value
Restricted Stock (1)	(in thousands)		(per share)
Unvested at January 1, 2015	525		$	60.60
Granted	100		90.47
Vested	(134	)	55.04
Forfeited	(5	)	66.52

Unvested at June 30, 2015	486		$	68.20

(1) Includes restricted stock units.

Restricted stock is valued at the closing price of the Company’s stock on the date of award. The weighted-average grant-date fair value of restricted stock granted during the six months ended June 30, 2015 and 2014 was $90.47 and $73.63, respectively. The number of restricted shares vested during the six months ended June 30, 2015 and 2014 was 134,480 and 169,028, respectively. The total fair value of restricted stock vested was $7.4 million during the six months ended June 30, 2015 and 2014. As of June 30, 2015, the unrecognized compensation cost related to restricted stock granted under the Company’s plans was $18.0 million. That cost is expected to be recognized over a weighted-average period of 3.4 years.

Cash-settled restricted stock units are initially valued at the closing price of the Company’s stock on the date of award. They are subsequently remeasured to the closing price of the Company’s stock at each reporting date until settlement. A summary of changes in cash-settled restricted stock units for the six months ended June 30, 2015 is presented below:

	Number of
	Shares
Cash-Settled Restricted Stock Units	(in thousands)
Unvested at January 1, 2015	174
Granted	14
Vested	(44	)
Forfeited	(3	)

Unvested at June 30, 2015	141