STOCK-BASED COMPENSATION PLAN:

The Omnibus Plan allows for the issuance of up to 8,437,500 shares of Class A Common Stock for awards, which include stock options, restricted stock, restricted stock units, deferred stock units and any other form of award established by the Compensation Committee, in each case consistent with the plan's purpose. Stock-based awards generally have three-year requisite service periods and five to seven-year contractual terms. Any shares of common stock related to awards that terminate by expiration, forfeiture or cancellation are deemed available for issuance or reissuance under the Omnibus Plan. In total, at December 31, 2018, there remained 2,192,988 shares of Class A Common Stock available for future issuance under the Omnibus Plan.

A summary of option activity under the Omnibus Plan as of December 31, 2018 and changes during the year then ended is presented below:



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at beginning of year	1,477,626		$	78.04
Granted	361,543		69.59
Exercised	(98,014	)	73.12
Expired	(155,934	)	92.37
Forfeited	(37,591	)	68.87
Outstanding at end of year	1,547,630		$	75.15	2.9	$	7,639
Exercisable at end of year	873,741		$	79.95	1.6	$	4,180

The weighted average grant date fair value of options granted during the years ended December 31, 2018, 2017 and 2016 was $21.58, $19.38 and $17.37, respectively. The total intrinsic value of options exercised during the years ended December 31, 2018, 2017 and 2016 was $1.2 million, $1.5 million and $1.6 million, respectively.

The Company determines the fair value of each option award on the date of grant using the Black-Scholes option pricing model. There are six input variables to the Black-Scholes model: stock price, strike price, volatility, term, risk-free interest rate and dividend yield. Both the stock price and strike price inputs are typically the closing stock price on the date of grant. The assumption for expected future volatility is based on a combination of historical and implied volatility of the Company's Class A Common Stock. The expected term of options is derived from the vesting period of the award, as well as historical exercise data, and represents the period of time that options granted are expected to be outstanding. The expected risk-free rate is calculated using the United States Treasury yield curve over the expected term of the option. The expected dividend yield is 0% for all periods presented, based upon the Company's historical practice of not paying cash dividends on its common stock.

The following weighted average assumptions were used to estimate the grant date fair value of options granted during the years ended December 31, 2018, 2017 and 2016 using the Black-Scholes option pricing model:



	2018		2017		2016
Expected volatility	27	%	30	%	37	%
Expected term (in years)	5.5		4		4
Risk-free interest rate	2.69	%	1.69	%	1.08	%
Expected dividend yield	0	%	0	%	0	%

The Company determines fair value of its restricted stock and restricted stock units based on the closing stock price on the date of grant.

The following table summarizes the Company's non-vested restricted stock activity as of December 31, 2018 and changes during the year then ended:



	Shares		Weighted Average Grant Date Fair Value
Non-vested at beginning of year	289,016		$	64.74
Granted	80,400		$	70.56
Vested	(89,346	)	$	67.41
Forfeited	(13,976	)	$	64.96
Non-vested at end of year	266,094		$	65.59

The weighted average grant date fair value of restricted stock granted during the years ended December 31, 2018, 2017 and 2016 was $70.56, $73.07 and $57.11, respectively. The total grant date fair value of restricted stock that vested during the years ended December 31, 2018, 2017 and 2016 was $6.0 million, $5.3 million and $6.5 million, respectively.

The following table summarizes the Company's non-vested restricted stock units activity as of December 31, 2018 and changes during the year then ended:



	Shares		Weighted Average Grant Date Fair Value
Non-vested at beginning of year	54,838		$	66.72
Granted	33,925		$	70.35
Vested	(27,682	)	$	66.16
Forfeited	(4,344	)	$	67.53
Non-vested at end of year	56,737		$	69.10

The weighted average grant date fair value of restricted stock units granted during the years ended December 31, 2018, 2017 and 2016 was $70.35, $73.18 and $57.11, respectively. The total grant date fair value of restricted stock units that vested during each of the years ended December 31, 2018, 2017 and 2016 was $1.8 million.

In February 2016, the Company's Compensation Committee approved new performance-based restricted stock units under the Omnibus Plan. The performance-based restricted stock units were granted on February 26, 2016, and were subject to performance-based vesting through December 31, 2016, with the payout performance multiplier (ranging from 0% to 200%) determined in accordance with the Company’s attainment of pre-determined financial performance targets established under the Company’s Genesee Value Added (GVA) methodology. These awards had a service condition and performance condition. The Company paid out 100% of the 2016 awards during 2017.

In February 2017, the Company's Compensation Committee renewed its approval of the performance-based restricted stock units component under the Omnibus Plan. The payout performance multiplier was determined in accordance with the Company's attainment of pre-determined financial performance targets established under the Company's GVA methodology, and awards vest one-third over a three-year period beginning with the first grant date anniversary. The payout performance multiplier attained for the 2017 awards was 77%. Actual shares that will be paid out for the 2018 award depends on the level of attainment of the performance-based criteria. As of December 31, 2018, the Company expects it will pay out 100% of the 2018 award over the three-year vesting period.

The following table summarizes the 2018 and 2017 performance-based restricted stock unit activity as of December 31, 2018 and changes during the year then ended:



	Shares		Weighted Average Grant Date Fair Value
Non-vested at beginning of year	31,611		$	74.14
Granted	39,663		$	69.53
Vested	(10,542	)	$	74.14
Forfeited	(1,084	)	$	71.27
Non-vested at end of year	59,648		$	71.13

The Company determined the fair value of each of the 2018, 2017 and 2016 performance-based restricted stock units by multiplying the number of units expected to be earned by the grant date fair market value of a share of the Company's Class A Common Stock. Each reporting period, the number of performance-based restricted stock units that are expected to be earned is determined, and compensation cost based on the grant date fair value is adjusted based on the current period probability assessment. At the end of the requisite service period, compensation cost is adjusted to equal the performance-based restricted stock units actually issued multiplied by the grant date fair value.

In 2015, the Company's Compensation Committee awarded performance-based restricted stock units under the Omnibus Plan. These performance-based restricted stock units were granted once per year and vested based upon the achievement of market performance criteria, ranging from 0% to 100%, as determined by the Compensation Committee prior to the date of the award, and continued service during the performance period. The performance period for these awards was generally three years. These performance-based restricted stock units entitled the grantee to receive shares of Class A Common Stock based upon the Company's Relative Total Shareholder Return as independently ranked against the components of the S&P 500 Index and the custom peer group over the performance period with each discrete half of the award's payouts being measured independently and then averaged together to find the final payout. The expense for these awards is recognized over the service period, even if the market condition is never satisfied. As a result of the Compensation Committee's modification to the Long-Term Incentive Compensation Program, including adoption of a new performance-based restricted stock unit program, effective February 2016, this program was discontinued and no future awards will be granted.

The following table summarizes the 2015 performance-based restricted stock units activity as of December 31, 2018 and changes during the year then ended. Based on the market condition criteria for the 2015 performance-based restricted stock units awarded, the threshold performance for any payout had not been met, and no shares were paid out at February 1, 2018 (the end of the performance period).



	Shares		Weighted Average Grant Date Fair Value
Non-vested at beginning of year	14,386		$	62.73
Granted	—		$	—
Vested	—		$	—
Forfeited/Canceled	(14,386	)	$	62.73
Non-vested at end of year	—		$	—

The following table presents the total compensation costs, total income tax benefit recognized in the consolidated statement of operations for stock-based awards and total tax benefit realized from exercise of stock-based awards for the years ended December 31, 2018, 2017 and 2016 (dollars in thousands):



	2018		2017		2016
Compensation costs	$	17,634	$	17,477	$	17,888
Income tax benefit recognized for compensation costs	$	3,437	$	3,430	$	5,296
Income tax benefit realized from exercise of stock-based awards	$	1,729	$	3,136	$	2,135

The total compensation costs related to non-vested awards not yet recognized was $19.9 million as of December 31, 2018, which will be recognized over the next three years with a weighted average period of 1.4 years.

The Company’s non-management directors can elect to defer their director compensation that would otherwise be payable in cash and receive payments for fees earned in the form of deferred stock units representing shares of the Company’s Class A Common Stock, with a value equal to 125% of the cash fees earned. The Company’s deferred stock units are deemed vested on the grant date. The following table summarizes the Company’s deferred stock unit activity as of December 31, 2018 and changes during the year then ended:



	Shares		Weighted Average Grant Date Fair Value
Outstanding at beginning of year	93,979		$	51.71
Granted	11,185		$	78.33
Issued	(30,384	)	$	53.78
Outstanding at end of year	74,780		$	54.85

The Company recognized expense associated with the directors’ deferred stock units of $0.9 million, $0.9 million and $1.0 million within other expenses in the Company’s consolidated statements of operations for the years ended December 31, 2018, 2017 and 2016, respectively.

The Company has reserved 1,265,625 shares of Class A Common Stock that the Company may sell to its full-time employees under its Employee Stock Purchase Plan (ESPP) at 90% of the stock's market price on the date of purchase. At December 31, 2018, 295,911 shares had been purchased under this plan. The Company recorded compensation expense for the 10% purchase discount of less than $0.2 million in each of the years ended December 31, 2018, 2017 and 2016.