Stock Incentive Plans

On May 21, 2014, our shareholders approved the 2014 Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation, or the 2014 Employee Stock Plan, which amended and restated the 2005 Re-designated, Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation, or the 2005 Employee Stock Plan, as of that date. The 2014 Employee Stock Plan authorized 3,250,000 shares of common stock for future grants to officers and employees on and after May 21, 2014. In addition, immediately prior to the approval of the 2014 Employee Stock Plan, there remained 507,925 shares available for future grants under the 2005 Employee Stock Plan which were carried over to the 2014 Employee Stock Plan and no further grants may be made under the 2005 Employee Stock Plan. Accordingly, under the 2014 Employee Stock Plan, a total of 3,757,925 shares of common stock were reserved for options, restricted stock, restricted stock units and/or stock appreciation right grants, of which 3,310,991 shares remain available for issuance of future grants at December 31, 2015.

Employee grants generally occur annually, upon approval by our Board of Directors, on the third business day after we issue a press release announcing annual financial results for the prior year. Discretionary grants may be made to eligible employees from time to time upon approval by our Board of Directors. In the event the grantee terminates his/her employment due to death or disability, or in the event we experience a change in control, as defined and specified in the 2014 Employee Stock Plan and the 2005 Employee Stock Plan, all options and restricted common stock granted pursuant to such plans immediately vest, except for a performance-based restricted common stock award granted in 2011 which, in the event of death or disability prior to vesting, will remain outstanding subject to satisfaction of the performance and vesting conditions, unless otherwise settled.

The following table summarizes employee restricted common stock grant awards by year for grant years with unvested shares outstanding at December 31, 2015 and the remaining vesting schedule.



	2015	2014		2013		2012	2011
Number of shares of restricted common stock:
Granted during the year	401,520	482,001		494,420		155,000	663,530
Unvested at December 31, 2015	170,390	63,427		—		—	65,000
Scheduled to vest during the year ending:
December 31, 2016	44,020	35,040	(2)	—	(2)	—	65,000	(1)
December 31, 2017	126,370	28,387		—		—	—

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(1)	Shares of restricted common stock granted under a performance-based award which will vest on June 30, 2016 if the performance conditions are met.


(2)	In December 2015, vesting conditions were accelerated for the remaining 2013 and certain 2014 restricted common stock grant awards, totaling 200,797 shares, otherwise scheduled to vest in 2016.

In addition to the restricted common stock grants detailed in the table above, performance-based restricted stock units were granted to select officers under the 2014 Employee Stock Plan during the year ended December 31, 2015 and under the 2005 Employee Stock Plan during the years ended December 31, 2014 and 2013. Each restricted stock unit granted represents a right to receive one share of our common stock in the future, subject to meeting certain criteria. The restricted stock units have specified performance objectives within a specified performance measurement period and no voting or dividend rights prior to vesting and delivery of shares. Shares will be issued on the vest date at a specified percentage of units granted, ranging from 0% to 125%, based on actual performance of the Company during the performance measurement period, as defined by the grant. However, in the event of a change in control prior to the end of the performance measurement period, the restricted stock units will vest on the change in control date and shares will be issued at 100% of units granted. Absent a change in control, if a grantee’s employment terminates prior to the end of the performance measurement period all restricted stock units will be forfeited. In the event the grantee's employment terminates during the period on or after the end of the performance measurement period through the vest date due to death, disability, retirement or a change in control, the grantee will remain entitled to the shares otherwise earned.

The following table summarizes restricted stock units awarded by year for grant years with unvested units outstanding at December 31, 2015.



	2015		2014		2013
Number of shares of restricted stock units:
Granted during the year		409,800		395,900		432,300
Unvested at December 31, 2015		400,600		350,900		—	(1)
Vest date	February 1, 2018		February 1, 2017		February 1, 2016
Performance measurement period:
Fiscal year ended	December 31, 2017		December 31, 2016		December 31, 2015

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(1)	In December 2015 vesting conditions for the remaining 366,400 shares of the 2013 restricted stock units granted were deemed to have been achieved.

Under the Astoria Financial Corporation 2007 Non-Employee Directors Stock Plan, as amended, or the 2007 Director Stock Plan, 240,080 shares of common stock were reserved for restricted stock grants, of which 28,232 shares of restricted common stock were granted in 2015 and 49,633 shares remain available at December 31, 2015 for issuance of future grants. Annual awards and discretionary grants, as such terms are defined in the plan, are authorized under the 2007 Director Stock Plan. Annual awards to non-employee directors occur on the third business day after we issue a press release announcing annual financial results for the prior year. Discretionary grants may be made to eligible directors from time to time as consideration for services rendered or promised to be rendered. Such grants are made on such terms and conditions as determined by a committee of independent directors.

Under the 2007 Director Stock Plan, restricted common stock granted vests approximately three years after the grant date, although awards immediately vest upon death, disability, mandatory retirement, involuntary termination or a change in control, as such terms are defined in the plan. Shares awarded will be forfeited in the event a recipient ceases to be a director prior to the vest date for any reason other than death, disability, mandatory retirement, involuntary termination or a change in control, as defined in the plan.

The following table summarizes restricted common stock and performance-based restricted stock unit activity in our stock incentive plans for the year ended December 31, 2015.



	Restricted Common Stock						Restricted Stock Units
	Number of Shares		Weighted Average Grant Date Fair Value				Number of Units		Weighted Average Grant Date Fair Value
Unvested at beginning of year	752,701			$	11.90		776,500			$	10.66
Granted	429,752			13.05			409,800			12.64
Vested	(741,690	)	(1)	(12.18		)	(366,400	)	(2)	(9.22		)
Forfeited	(65,946	)		(11.77		)	(68,400	)		(11.03		)
Unvested at end of year	374,817			12.68			751,500			12.41


(1)	Includes 200,797 shares originally scheduled to vest at various times during 2016 that had a compensation expense of $2.4 million.


(2)	Shares originally scheduled to vest in February 2016.

The aggregate fair value on the vest date of restricted common stock awards which vested totaled $11.7 million during the year ended December 31, 2015, $6.6 million during the year ended December 31, 2014 and $9.6 million during the year ended December 31, 2013. The weighted average grant date fair value of restricted common stock was $13.05 per share during the year ended December 31, 2015, $12.58 per share during the year ended December 31, 2014 and $9.70 per share during the year ended December 31, 2013.

Options outstanding at December 31, 2015, granted under plans other than the 2014 Employee Stock Plan, 2005 Employee Stock Plan and 2007 Director Stock Plan, have a maximum term of ten years and were granted in tandem with limited stock appreciation rights exercisable only in the event we experience a change in control, as defined by the plans. Common shares are issued from treasury stock upon the exercise of stock options. No options were exercised during the years ended December 31, 2015, 2014 and 2013. We have an adequate number of shares available in treasury stock for future stock option exercises.

The following table summarizes option activity in our stock incentive plans for the year ended December 31, 2015.



	Number of Options		Weighted Average Exercise Price
Outstanding at beginning of year	36,000			$	28.58
Expired	(24,000	)		(27.99		)
Outstanding and exercisable at end of year	12,000			29.76

At December 31, 2015, options outstanding and exercisable had no intrinsic value and a weighted average remaining contractual term of approximately 7 months.

Stock-based compensation expense totaled $6.8 million, net of taxes of $4.6 million, for the year ended December 31, 2015, $5.6 million, net of taxes of $3.1 million, for the year ended December 31, 2014 and $4.5 million, net of taxes of $2.5 million, for the year ended December 31, 2013. At December 31, 2015, pre-tax compensation cost related to all unvested awards of restricted common stock and restricted stock units not yet recognized totaled $6.3 million and will be recognized over a weighted average period of approximately 1.8 years which excludes $4.5 million of pre-tax compensation cost related to 65,000 shares of performance-based restricted common stock granted in 2011 and 288,025 performance-based restricted stock units granted in 2014 and 2015, for which compensation cost will begin to be recognized when the achievement of the performance conditions becomes probable.