STOCKHOLDERS' EQUITY

Preferred Stock

Anixter has the authority to issue 15.0 million shares of preferred stock, par value $1.00 per share, none of which were outstanding at the end of fiscal 2018 and 2017.

Common Stock

Anixter has the authority to issue 100.0 million shares of common stock, par value $1.00 per share, of which 33.9 million shares and 33.7 million shares were outstanding at the end of fiscal 2018 and 2017, respectively.

Share Repurchases

Anixter did not repurchase any shares during any of the periods presented in these Consolidated Financial Statements.

Stock-Based Compensation

During the second quarter of 2017, the Company's shareholders approved the 2017 Stock Incentive Plan consisting of 2.0 million shares of the Company's common stock. Prior approved stock incentive plans have been closed and will not be allowed to issue future stock grants. At December 28, 2018, there were approximately 1.7 million shares reserved for issuance under the 2017 incentive plan.

Restricted Stock Units and Performance Units

The grant-date value of the stock units is amortized and converted to outstanding shares of common stock on a one-for-one basis over a three, four or six-year vesting period from the date of grant based on the specific terms of the grant. Compensation expense, net of the reversal of costs associated with forfeitures, associated with the stock units was $15.7 million, $15.5 million and $13.7 million in 2018, 2017 and 2016, respectively.

During the first quarter of 2016, Anixter initiated a performance-based restricted stock unit ("performance units") program that will vest in one-third tranches to be evaluated on the anniversary of the first, second and third performance cycles. Each evaluation period will be based on the achievement of the Company's total shareholder return ("TSR") relative to the TSR of the S&P Mid Cap 400 index. The issuance of the vested shares will be on the final vesting date of year three. The granted units will be adjusted based on the specific payout percentage of the grant agreement. The fair value of each tranche related to the performance units were estimated at the grant date using the Monte Carlo Simulation pricing model.

Under the current stock incentive plan, the Company pays its non-employee directors annual retainer fees and, at their election, meeting fees in the form of stock units. Currently, these units are granted quarterly and vest immediately. Therefore, the Company includes these units in its common stock outstanding on the date of vesting as the conditions for conversion are met. However, the actual issuance of shares related to all director units are deferred until a pre-arranged time selected by each director. Compensation expense associated with the director stock units was $2.4 million, $2.5 million and $2.3 million in 2018, 2017 and 2016, respectively.

The total fair value of stock units that vested was $14.8 million, $14.4 million and $12.0 million in 2018, 2017 and 2016, respectively.

The following table summarizes the activity under the director and employee stock unit plans:



(units in thousands)	Director Stock Units (a)		Weighted Average Grant Date Fair Value (b)		Employee Stock Units (c)		Weighted Average Grant Date Fair Value (b)
Outstanding balance at January 1, 2016	307.8		$	52.53	436.1		$	81.56
Granted	33.3		56.34		491.5		39.93
Converted	—		—		(125.2	)	80.58
Canceled	—		—		(75.0	)	55.89
Outstanding balance at December 30, 2016	341.1		52.90		727.4		56.25
Granted	31.3		80.81		222.4		85.65
Converted	—		—		(155.4	)	76.51
Canceled	—		—		(50.7	)	59.25
Outstanding balance at December 29, 2017	372.4		55.25		743.7		60.61
Granted	34.5		70.92		237.9		74.98
Converted	(26.0	)	60.95		(192.6	)	64.15
Performance unit adjustments^(d)	—		—		(12.6	)	89.00
Canceled	—		—		(52.0	)	70.80
Outstanding balance at December 28, 2018	380.9		$	56.28	724.4		$	63.16


(a)	All director units are considered convertible although each individual has elected to defer conversion until a pre-arranged time.


(b)	Director and employee stock units are granted at no cost to the participants.


(c)	All employee stock units outstanding are not vested at year end and are expected to vest.


(d)	Adjustments based on final evaluations for non-vested performance stock units.

The weighted-average remaining contractual term for outstanding employee units is 2.0 years.

The aggregate intrinsic value of units converted into stock represents the total pre-tax intrinsic value (calculated using Anixter's stock price on the date of conversion multiplied by the number of units converted) that was received by unit holders. The aggregate intrinsic value of units converted into stock for 2018, 2017 and 2016 was $16.1 million, $13.2 million and $5.4 million, respectively.

The aggregate intrinsic value of units outstanding represents the total pre-tax intrinsic value (calculated using Anixter's closing stock price on the last trading day of the fiscal year multiplied by the number of units outstanding) that will be received by the unit recipients upon vesting. The aggregate intrinsic value of units outstanding for 2018, 2017 and 2016 was $59.5 million, $84.8 million and $79.9 million, respectively.

The aggregate intrinsic value of units convertible represents the total pre-tax intrinsic value (calculated using Anixter's closing stock price on the last trading day of the fiscal year multiplied by the number of units convertible) that would have been received by the unit holders. The aggregate intrinsic value of units convertible for 2018, 2017 and 2016 was $20.5 million, $28.3 million and $27.6 million, respectively.

Stock Options

Options previously granted under these plans have been granted with exercise prices at the fair market value of the common stock on the date of grant. All options expire ten years after the date of grant. These options were granted with vesting periods of four years representing the requisite service period based on the specific terms of the grant. The Company generally issues new shares to satisfy stock option exercises as opposed to adjusting treasury shares. The fair value of stock option grants is amortized over the respective vesting period representing the requisite service period. The Company did not grant any stock options to employees during 2018, 2017 or 2016.

Compensation expense associated with the stock options in 2018, 2017 and 2016 was $0.8 million, $0.1 million and $0.5 million, respectively. There were no unvested stock options in 2018. The total fair value of stock options that vested was $0.5 million and $1.0 million in 2017 and 2016, respectively.

The following table summarizes the activity under the employee option plans:



(options in thousands)	Employee Options		Weighted Average Exercise Price
Balance at January 1, 2016	533.0		$	49.00
Exercised	(44.8	)	52.55
Balance at December 30, 2016	488.2		48.68
Exercised	(88.7	)	56.43
Balance at December 29, 2017	399.5		46.96
Exercised	(51.8	)	29.64
Balance at December 28, 2018	347.7		$	49.54
Options exercisable at year-end:
2016	468.4		$	48.00
2017	399.5		$	46.96
2018	347.7		$	49.54

The weighted-average remaining contractual term for options exercisable and outstanding for 2018 was 3.0 years.

The aggregate intrinsic value of options exercised represents the total pre-tax intrinsic value (calculated as the difference between Anixter's stock price on the date of exercise and the exercise price, multiplied by the number of options exercised) that was received by the option holders. The aggregate intrinsic value of options exercised for 2018, 2017 and 2016 was $2.4 million, $2.2 million and $1.0 million, respectively.

The aggregate intrinsic value of options outstanding represents the total pre-tax intrinsic value (calculated as the difference between Anixter's closing stock price on the last trading day of each fiscal year and the weighted-average exercise price, multiplied by the number of options outstanding at the end of the fiscal year) that could be received by the option holders if such option holders exercised all options outstanding at fiscal year-end. The aggregate intrinsic value of options outstanding for 2018, 2017 and 2016 was $1.5 million, $11.6 million and $15.8 million, respectively.

The aggregate intrinsic value of options exercisable represents the total pre-tax intrinsic value (calculated as the difference between Anixter's closing stock price on the last trading day of each fiscal year and the weighted-average exercise price, multiplied by the number of options exercisable at the end of the fiscal year) that would have been received by the option holders had all option holders elected to exercise the options at fiscal year-end. The aggregate intrinsic value of options exercisable for 2018, 2017 and 2016 was $1.5 million, $11.6 million and $15.5 million, respectively.

Summary of Non-Vested Shares

The following table summarizes the changes to the non-vested shares:



(shares in thousands)	Non-vested Performance Shares (a)		Weighted-average Grant Date Fair Value
Balance at December 29, 2017	120.6		$	42.17
Granted	43.7		78.33
Vested	—		—
Performance unit adjustments^(b)	(12.6	)	89.00
Canceled	(3.8	)	86.80
Balance at December 28, 2018	147.9		$	47.73


(a)	All non-vested stock performance units are expected to vest.


(b)	Adjustments based on final evaluations for non-vested performance stock units.

As of December 28, 2018, there was $15.1 million of total unrecognized compensation cost related to non-vested stock units which is expected to be recognized over a weighted-average period of 1.5 years. As of December 28, 2018, all compensation cost related to options granted to employees has been fully recognized.