14. Share-Based Compensation and Equity

Share-Based Compensation

Upon the consummation of the Merger, the Company assumed and adopted the Nationstar Mortgage Holdings Inc. Second Amended and Restated 2012 Incentive Compensation Plan (“2012 Plan”), as may be amended, that offers equity-based awards to certain key employees of the Company, consultants, and non-employee directors. The equity based awards include restricted stock awards and restricted stock units granted to employees. These awards are valued at the fair market value of the Company’s common stock on the grant date as defined in the 2012 Plan. The stock awards generally vest in installments of 33.3%, 33.3% and 33.4% respectively on each of the first three anniversaries of the awards, provided that (i) the participant remains continuously employed with the Company during that time or (ii) the participant’s employment has terminated by reason of retirement. In addition, upon death, disability or generally a change in control of the Company, the unvested shares of an award will vest. The value of the stock awards is measured based on the market value of common stock of the Company or its Predecessor on the grant date.

The following table summarizes equity based awards under the 2012 Plan for the periods indicated.



	Shares (or Units) (in thousands)		Weighted-Average Grant Date Fair Value, per Share (or Unit)
Predecessor
Equity awards outstanding as of December 31, 2017	2,105		$	17.33
Granted	1,278		14.77
Forfeited	(1,196	)	16.52
Vested	(1,061	)	16.20
Equity awards outstanding as of July 31, 2018	1,126		16.27

Successor
Equity awards outstanding as of August 1, 2018	1,154		$	16.27
Granted	2,382		14.95
Forfeited	(43	)	16.16
Vested	(20	)	16.16
Equity awards outstanding as of December 31, 2018	3,473		15.53

The Company recorded $2 of expenses related to share-based awards during the five months ended December 31, 2018. The Predecessor recorded $17 of expenses related to share-based awards during the seven months ended July 31, 2018, including $7 expenses recognized due to a one-time accelerated vesting of equity awards in connection with the Merger. In addition, the Predecessor recorded $17 and $21 of expenses related to share-based awards during the year ended December 31, 2017 and 2016, respectively. As of December 31, 2018, unrecognized compensation expense totaled $48 related to non-vested stock award payments that are expected to be recognized over a weighted average period of 2.35 years.

The Company is eligible to receive a tax benefit when the vesting date fair value of an award exceeds the value used to recognize compensation expense at the date of grant. The excess tax benefits recognized by the Company and the Predecessor are not material.

As of December 31, 2018, approximately 85,000 Xome stock appreciation rights (“SARs”) were outstanding and can be settled in cash or units of Xome Holdings LLC (at the election of Xome). The SARs generally vest over three years and have a ten-year term. The SARs become exercisable and are recognized to expense upon a liquidity event at Xome which includes a change in control or an initial public offering of Xome. No expense was recorded for outstanding SARs in 2018, 2017 and 2016 as a liquidity event has not occurred.