Management Compensation and Incentive Plans -

Stock-Based Compensation

On August 11, 2015, the Company issued Preferred Stock to Brookfield in excess of 15% of the Company's outstanding shares (see Note 2 "Preferred Share Issuance and Tender Offer"). This ownership exceeded the threshold for the change in control provisions in our Long Term Incentive Compensation ("LTIP") agreements under our 2005 Equity Incentive Plan. As a result, upon such issuance, all unvested restricted shares vested. Performance shares vested at 100% and stock options with a strike price below the Offer Price were cancelled upon payment of the amount equal to the Offer Price less the exercise price. These vestings and payments resulted in a $12.7 million accelerated charge in the predecessor period. There are no longer any outstanding awards as of December 31, 2015.

Stock-Based Compensation

We recognized $7.7 million, $5.6 million, and $15.3 million in stock-based compensation expense in 2013, 2014 and 2015, respectively. A majority of the expense, $6.9 million, $4.8 million, and $14.6 million, respectively, was recorded as selling and administrative expenses in the Consolidated Statements of Income, with the remainder recorded as cost of sales and research and development.

Accounting for Stock-Based Compensation

Restricted Stock and Performance Shares. Compensation expense for restricted stock and performance share awards is based on the closing price of our common stock on the date of grant, less our assumptions of dividend yield and expected forfeitures or cancellations of awards throughout the vesting period, which generally range between one and three years.

Restricted stock and performance share awards activity under the plans for the year ended December 31, 2015, was:



	Number of Shares		Weighted- Average Grant Date Fair Value
Outstanding unvested at December 31, 2014	1,814,130		$	6.31
Granted	412,191		9.67
Vested	(2,037,914	)	6.98
Forfeited/canceled/expired	(188,407	)	6.42
Outstanding at December 31, 2015	—		$	—

Stock Options. Compensation expense for stock options is based on the estimated fair value of the option on the date of the grant. We calculate the estimated fair value of the option using the Black-Scholes option-pricing model. We did not grant any stock options during 2015.

Stock option activity under the plans for the year ended December 31, 2015 was:



	Number of Shares		Weighted- Average Exercise Price
Outstanding at December 31, 2014	2,042,074		$	10.93
Granted	—		—
Forfeited/canceled/expired	(1,562,791	)	12.98
Exercised	(479,283	)	4.24
Outstanding at December 31, 2015	—		$	—

Incentive Compensation Plans

We have a global incentive program for our worldwide salaried and hourly employees, the Incentive Compensation Program (the “ICP”), which includes a shareholder-approved executive incentive compensation plan. The ICP is based primarily on earnings before income taxes and achieving cash flow targets and, to a lesser extent, strategic targets. We had no balance in our accrued liability for ICP as of December 31, 2014 and 2015.