We maintain long-term incentive plans for management, other personnel, and key service providers. The plans allow for granting stock-based compensation awards, based on CEC common stock (NASDAQ symbol “CZR”), including time-based and performance-based stock options, restricted stock units (“RSUs”), performance stock units (“PSUs”), restricted stock awards, stock grants, or a combination of awards. Forfeitures are recognized in the period in which they occur.

Prior performance incentive plans include the Caesars Interactive Entertainment, Inc. Amended and Restated Management Equity Incentive Plan and the Caesars Acquisition Company 2014 Performance Incentive Plan. No awards issued under these plans are outstanding as of December 31, 2018 and 2017, as a result of the sale of Caesars Interactive Entertainment’s (“CIE”) social and mobile games business (the “SMG Business”) as described in Note 19 and the CAC Merger described in Note 1.

In July 2017, we adopted the Caesars Entertainment Corporation 2017 Performance Incentive Plan, (the “2017 Incentive Plan”) upon approval of the Company’s stockholders and, upon adoption, awards are no longer granted under the Caesars Entertainment Corporation 2012 Performance Incentive Plan, as amended, (the “2012 Incentive Plan”). As of December 31, 2018, there were approximately 8 million options outstanding under the 2012 Incentive Plan, which will expire between years 2022 and 2025. As of December 31, 2018, there were approximately 2 million RSUs outstanding under the 2012 Incentive Plan.

The 2017 Incentive Plan allows for the granting of equity based awards for directors, employees, officers and consultants or advisers who render services to Caesars Entertainment or its subsidiaries. Under the 2017 Incentive Plan, a total of 25 million shares of our common stock have been authorized for issuance. No options have been granted under the 2017 plan. RSUs granted under the 2017 Incentive Plan generally vest ratably over four years. PSUs vest over three years. The number of unissued common shares reserved for future grants under the plan is 9 million as of December 31, 2018.

Caesars Entertainment Stock Option Activity

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in millions)
Outstanding as of December 31, 2017	9,227,890		$	10.36	3.9	$	35
Exercised	(746,332	)	7.58
Forfeited	(46,519	)	8.64
Expired	(74,674	)	9.97
Outstanding as of December 31, 2018	8,360,365		10.63		2.8	—
Vested and expected to vest as of December 31, 2018	8,360,365		10.63		2.8	—
Exercisable as of December 31, 2018	7,338,503		9.12		2.7	—

Caesars Entertainment Stock Option Exercises

	Years Ended December 31,
(Dollars in millions)	2018		2017		2016
Option Exercises:
Number of options exercised	746,332		1,249,640		11,101
Cash received for options exercised⁽¹⁾	$	6	$	8	$	—
Aggregate intrinsic value of options exercised⁽¹⁾	$	3	$	7	$	—

During the year ended December 31, 2018, we granted RSUs to employees of Caesars Entertainment with an aggregate fair value of $46 million. Each RSU represents the right to receive payment in respect of one share of the Caesars Entertainment’s common stock. The following table summarizes the activity of Caesars Entertainment’s RSUs during the year ended December 31, 2018.



	Units		Weighted Average Fair Value ⁽¹⁾
Outstanding as of December 31, 2017	17,274,659		$	11.22
Granted	4,177,558		10.93
Vested	(6,550,480	)	10.36
Forfeited	(1,446,645	)	11.59
Outstanding as of December 31, 2018	13,455,092		11.51

____________________

In April 2018, the Company granted approximately 1.6 million PSUs that are scheduled to vest in three equal tranches over a three-year period. On each vesting date, recipients will receive between 0% and 200% of the granted PSUs in the form of CEC common stock based on the achievement of specified performance service conditions. Based on the terms and conditions of the awards, the fair value of the PSUs was initially set equal to the quoted market price of our common stock on the date of grant. The grant date fair value is reassessed at each reporting date to reflect the market price of our common stock until a mutual understanding of the key terms and conditions of the awards between the Company and recipient is achieved. The following table summarizes the activity of Caesars Entertainment’s PSUs during the year ended December 31, 2018.



	Units		Weighted Average Fair Value ⁽¹⁾
Outstanding as of December 31, 2017	—		$	—
Granted	1,569,801		10.78
Forfeited	(103,618	)	10.80
Outstanding as of December 31, 2018	1,466,183		6.79

____________________

As of December 31, 2018, there was $126 million of total unrecognized compensation cost related to Caesars Entertainment stock-based compensation plans, which is expected to be recognized over a remaining weighted-average period of 2.4 years.

Historically, CIE granted stock-based compensation awards in CIE common stock to its employees, directors, service providers and consultants in accordance with the Caesars Interactive Entertainment, Inc. Amended and Restated Management Equity Incentive Plan. These awards were classified as liability-based instruments and were re-measured at their fair value at each reporting date.

As described in Note 19, in September 2016, CIE sold its SMG Business, which represented the majority of CIE’s operations, and the SMG Business has been presented as discontinued operations. Upon the closing of the SMG Business sale, all outstanding CIE stock-based compensation awards were deemed fully vested and were subsequently paid in cash in connection with the closing of the SMG Business sale. The portion of CIE’s stock-based compensation expense directly identifiable with employees of the SMG Business was reclassified to discontinued operations for all periods presented in the Statements of Operations. The portion of CIE’s stock-based compensation expense not directly identifiable with employees of the SMG Business was included in Property, general, administrative, and other in the Statements of Operations.

CIE Stock Option Grants and Exercises

(Dollars in millions, except per share data)	Year Ended December 31, 2016
Options Granted:
Number of options granted during period	377
Weighted average grant-date fair value per share ⁽¹⁾	$	5,404.93
Weighted average exercise price per share	$	19,166.18

Option Exercises:
Number of options exercised	909
Cash received for options exercised	$	2
Aggregate intrinsic value of options exercised	$	13

Assumptions Used to Estimate CIE Option Value

	Year Ended December 31, 2016
Expected range of volatility	40.5% - 44.6%
Expected dividend yield	—	%
Expected range of term (in years)	0.8 - 4.2
Risk-free interest rate range	0.5% - 1.2%

Composition of Stock-Based Compensation Expense (All Plans)

	Years Ended December 31,
(In millions)	2018		2017		2016 ⁽¹⁾
Corporate expense	$	60	$	36	$	37
Property, general, administrative, and other	19		7		195
Total stock-based compensation expense	$	79	$	43	$	232