Stock-Based Compensation

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Under the Company's 2004 Stock Incentive Plan ("2004 Plan"), the Company granted options to purchase shares of the Company's common stock at the fair market value on the date of grant. The options vested over periods of up to three years and have a term of 10 years from date of grant. At its November 2007 meeting, the Company's Compensation Committee decided that restricted common stock awards and stock units ("restricted stock") would be awarded in place of stock options for long-term incentive award grants to employees. Restricted stock granted to employees primarily vests 50% after two years and the remainder after three years from the date of grant. Restricted stock granted to non-employee directors generally vests on the first anniversary date of the grant. In February 2014, the Company's Board of Directors replaced the expired 2004 Plan by adopting the BorgWarner Inc. 2014 Stock Incentive Plan ("2014 Plan"). On April 30, 2014, the Company's stockholders approved the 2014 Plan. Under the 2014 Plan, 8 million shares are authorized for grant, of which approximately 5.7 million shares are available for future issuance as of March 31, 2016.

Stock options A summary of the Company’s stock option activity for the three months ended March

31, 2016 is as follows:

	Shares under option (thousands)		Weighted average exercise price		Weighted average remaining contractual life (in years)	Aggregate intrinsic value (in millions)
Outstanding and exercisable at December 31, 2015	1,267		$	16.59	0.9	$	33.7
Exercised	(165	)	$	16.81
Outstanding and exercisable at March 31, 2016	1,102		$	16.56	0.7	$	24.1

Restricted stock The value of restricted stock is determined by the market value of the Company’s common stock at the date of grant. In 2016, restricted stock in the amount of 667,874 shares was granted to employees. The value of the awards is recognized as compensation expense ratably over the restriction periods. As of March 31, 2016, there was $44.2 million of unrecognized compensation expense that will be recognized over a weighted average period of approximately 2 years.

The Company recorded restricted stock compensation expense of $6.4 million and $7.3 million for the three months ended March 31, 2016 and 2015, respectively.

A summary of the Company’s nonvested restricted stock for the three months ended March 31, 2016 is as follows:

	Shares subject to restriction (thousands)		Weighted average price
Nonvested at December 31, 2015	1,326		$	53.18
Granted	668		$	29.61
Vested	(493	)	$	46.06
Forfeited	(19	)	$	42.84
Nonvested at March 31, 2016	1,482		$	45.03