Stock-Based Compensation

On January 1, 2017, the Company adopted ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. See Note 1. Organization and Summary of Significant Accounting Policies—Adoption of new accounting pronouncements for a discussion of the impact of adoption.

The Company has granted restricted stock to employees and directors pursuant to the Continental Resources, Inc. 2013 Long-Term Incentive Plan (“2013 Plan”) as discussed below. The Company’s associated compensation expense, which is included in the caption “General and administrative expenses” in the consolidated statements of comprehensive income (loss), was $45.9 million, $48.1 million, and $51.8 million for the years ended December 31, 2017, 2016 and 2015, respectively.

In May 2013, the Company adopted the 2013 Plan and reserved 19,680,072 shares of common stock that may be issued pursuant to the plan. As of December 31, 2017, the Company had 14,538,540 shares of common stock available for long-term incentive awards to employees and directors under the 2013 Plan.

Restricted stock is awarded in the name of the recipient and constitutes issued and outstanding shares of the Company’s common stock for all corporate purposes during the period of restriction and, except as otherwise provided under the 2013 Plan or agreement relevant to a given award, includes the right to vote the restricted stock and to receive dividends, subject to forfeiture. Restricted stock grants generally vest over periods ranging from one to three years.

A summary of changes in non-vested restricted shares from December 31, 2014 to December 31, 2017 is presented below.



	Number of non-vested shares		Weighted average grant-date fair value
Non-vested restricted shares at December 31, 2014	2,678,764		$	49.40
Granted	1,462,534		46.65
Vested	(555,517	)	48.07
Forfeited	(336,170	)	51.23
Non-vested restricted shares at December 31, 2015	3,249,611		$	48.20
Granted	2,064,508		22.36
Vested	(1,207,235	)	41.27
Forfeited	(193,250	)	39.79
Non-vested restricted shares at December 31, 2016	3,913,634		$	37.12
Granted	1,585,870		44.58
Vested	(874,665	)	57.36
Forfeited	(598,729	)	37.34
Non-vested restricted shares at December 31, 2017	4,026,110		$	35.63

The grant date fair value of restricted stock represents the closing market price of the Company’s common stock on the date of grant. Compensation expense for a restricted stock grant is determined at the grant date fair value and is recognized over the vesting period as services are rendered by employees and directors. The Company estimates the number of forfeitures expected to occur in determining the amount of stock-based compensation expense to recognize. There are no post-vesting restrictions related to the Company’s restricted stock. The fair value at the vesting date of restricted stock that vested during 2017, 2016 and 2015 was $39.8 million, $30.0 million and $23.6 million, respectively. As of December 31, 2017, there was approximately $58 million of unrecognized compensation expense related to non-vested restricted stock. This expense is expected to be recognized over a weighted average period of 1.2 years.