STOCK-BASED COMPENSATION

Stock-based compensation expense recognized in the Condensed Consolidated Statements of Income/(Loss) was $2.9 million and $2.5 million for the third quarters of 2017 and 2016, respectively. Stock-based compensation expense recognized in the Condensed Consolidated Statements of Income/(Loss) was $11.5 million and $22.0 million for the first nine months of 2017 and 2016, respectively. On April 11, 2017, Carl E. Lee, Jr. retired from his positions as President and Chief Executive Officer and a member of the Board of Directors of our Company, as well as from his positions as an officer and/or director of each of our subsidiaries. As part of Mr. Lee's retirement agreement, certain of his stock based compensation awards were modified, which resulted in the recognition of an additional $3.4 million of stock-based compensation expense during the first nine months of 2017. During 2016, the acquisition of Diamond Foods resulted in a significant amount of prior Diamond Foods stock-based compensation awards converting to replacement Snyder's-Lance awards. Within transaction and integration related expenses on the Condensed Consolidated Statements of Income/(Loss), we recognized $0.3 million in stock-based compensation expense for the third quarter of 2016 and $15.4 million in stock-based compensation expense and $1.0 million in cash compensation expense in the first nine months of 2016 from replacement awards that vested due to acceleration clauses within employment agreements with former Diamond Foods executives.

During the first nine months of 2017, we issued and/or modified 2,625,716 stock options (this includes the shares modification discussed above as well as the options issued under a new long-term performance-based plan discussed below) at a weighted average exercise price of $35.99 per share, 112,049 restricted shares, 324,034 performance-based restricted units and 28,741 restricted units to employees and directors. During the first nine months of 2016, we issued 1,095,823 stock options at a weighted average exercise price of $30.73 per share, 118,477 restricted shares, 82,787 performance-based restricted units and 28,632 restricted units to employees and directors.

As a part of the Transformation Plan, we initiated a new enterprise-wide performance plan aimed at incentivizing our employees to achieve the targets described in Note 5. Performance-based awards were made under this award for the period commencing as of August 31, 2017 and ending at the end of the 2020 fiscal year. These awards vest in the first quarter of 2021 and 2022. Approximately 150 key employees were granted a total of 250,169 performance-based restricted units and 1,630,588 performance-based stock options. For all remaining salaried employees, awards will be made in cash at the end of the performance period and paid in full in the first quarter of 2021.

We account for option awards based on the fair value-method using the Black-Scholes model. The following assumptions were used to determine the weighted average fair value of options granted and/or modified during the first nine months of 2017 (inclusive of those discussed above):



	Nine Months Ended
	September 30, 2017
Assumptions used in Black-Scholes pricing model:
Expected dividend yield	1.73		%
Risk-free interest rate	1.62		%
Expected life	4.5 years
Expected volatility	19.75		%
Fair value per share of options granted	$	6.19

The fair value of the performance-based restricted units issued during the first nine months of 2017 was determined using a Monte Carlo simulation.

To cover withholding taxes payable by employees upon the vesting of restricted shares, in the third quarter and first nine months of 2017, we repurchased 1,300 and 42,499 shares of common stock, respectively. For the third quarter and first nine months of 2016, we repurchased 436 and 92,181 shares of common stock, respectively.

In addition, we recognized $1.1 million in incentive compensation income and $1.4 million in incentive compensation expense for our performance-based cash incentive plans for the third quarters of 2017 and 2016, respectively. We recognized $0.8 million in incentive compensation income and $2.6 million in incentive compensation expense for the first nine months of 2017 and 2016, respectively.