Note 6. Equity‑Based Incentive Plans

2015 Equity Incentive Plan (2015 Plan)

The 2015 Plan is designed to attract, motivate and retain qualified persons that are able to make important contributions to the company’s success. To accomplish these objectives, the 2015 Plan provides for awards of equity‑based incentives through granting of restricted stock units (RSUs), deferred stock units (DSUs), restricted stock awards, stock options, unrestricted stock awards, stock appreciation rights (SARs), and performance awards, such as long-term incentive compensation program (LTIP). The company’s stockholders approved the 2015 Plan in May 2015, and 12.5 million shares of common stock were reserved for issuance upon exercise of equity grants through December 31, 2025. The 2015 Plan uses a fungible share concept under which any awards that are not a full-value award, such as stock options and stock-settled SARs, will be counted against the share limit as one share for each share of common stock, and awards that are full-value awards, such as RSUs, DSUs, restricted and unrestricted stock awards, and performance awards, will be counted against the share limit as 2.09 shares for each share of common stock. The SARs the company has granted to date can only be settled in cash, and thus don’t count against the share reserve. At December 31, 2018, there were 3.3 million shares still available for issuance.

Substantially all of the company’s employees receive RSUs, which are granted annually in November at no cost to employees, vest 100% over the shorter of two years from grant date or upon the recipient reaching retirement eligible age (59½ years), and the stock is issued to employees upon vesting. The company satisfies RSUs with newly issued shares, and satisfies restricted stock awards, DSUs, and performance awards with treasury shares. In addition to the RSUs and LTIP awards granted during the three year period ended December 31, 2018, presented below, the company awarded 28,000, 34,000 and 60,000 DSUs in 2018, 2017 and 2016, respectively; and 285,000, 200,000 and 86,000 SARs in 2018, 2017 and 2016, respectively. The 571,000 SAR awards outstanding at December 31,2018, for which no shares of common stock can be issued because the awards must be cash-settled upon exercise, have a weighted-average exercise price of $39.17.

Note 6. Equity‑Based Incentive Plans (Continued)

Restricted Stock Units

A summary of the company’s RSU activity and outstanding RSUs as of December 31, 2018, are presented below (dollars in thousands except grant date fair value):


		Weighted		Aggregate
	Number	Average Grant		Intrinsic		Unrecognized
	of RSUs	Date Fair Value		Value		Compensation
Outstanding RSUs as of January 1, 2016	2,278,704		$18.55	$	40,720	$	27,615
Granted	852,063		32.40
Vested	(962,828)		22.76
Forfeited	(139,922)		18.50
As of December 31, 2016	2,028,017		22.38	$	72,157	$	29,086
Granted	828,955		36.29
Vested	(1,364,593)		18.50
Forfeited	(78,737)		23.52
As of December 31, 2017	1,413,642		34.22	$	60,970	$	32,017
Granted	815,761		36.70
Vested	(817,226)		33.20
Forfeited	(64,111)		34.51
As of December 31, 2018 (nonvested)	1,348,066		$36.32	$	40,496	$	31,996

The weighted average remaining life before vesting of the outstanding RSUs as of December 31, 2018, is 1.41 years. The fair value of RSUs vesting during 2018, 2017, and 2016 was $24.5 million, $58.8 million, and $34.3 million, respectively, and was net-share settled such that the company withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes and remitted the cash to the appropriate taxing authorities. The total shares withheld in 2018, 2017, and 2016 were approximately 268,000, 457,000, and 338,000 shares, respectively, and were based on the value of the RSUs on their vesting dates as determined by the company’s closing stock price.

Long-Term Incentive Compensation Program (LTIP)

The company maintains an LTIP performance-based program directed toward key senior executives of the company, as determined at the discretion of the Compensation Committee of the Board of Directors. Awards are in shares of the company’s common stock using the stock price on the first day of the performance period to convert each key senior executive’s predetermined multiple of annual base salary. The performance period is generally three years; however, certain transition awards were issued in 2017 with shorter performance periods. Performance is measured in terms of equal portions of four growth and profitability measures, as compared to the same measures, similarly treated, of a pre-established group of steel sector competitors. Awards earned can range from zero to 100% of the shares awarded. The 2018 award shares vest immediately once earned on the basis of performance. For prior awards, once earned on the basis of performance, one-third of the shares vest immediately, and the remaining shares vest in equal annual installments over an additional two-year service-based vesting period requirement. The Compensation Committee granted the following three-year performance period awards, and two-year and one-year performance period transition awards, which have been earned and have or will be issued over the vesting period as follows:

Note 6. Equity‑Based Incentive Plans (Continued)



	Maximum
	Shares That	Award
	Could Be Issued	Earned	Award Issued/Issuable

2013 LTIP Award:
Three-year performance period award	173,319	149,060	74,179	March 2016
			37,441	March 2017
			37,440	March 2018

2014 LTIP Award:
Three-year performance period award	204,741	204,741	68,249	March 2017
			68,247	March 2018
			68,245	March 2019
2015 LTIP Award:
Three-year performance period award	236,434	236,434	78,813	March 2018
			78,812	March 2019
			78,809	March 2020

2016 LTIP Award:
Three-year performance period award	324,469	324,469	108,158	March 2019
			108,156	March 2020
			108,155	March 2021

2017 LTIP Award:
Three-year performance period award	182,274	*	*

Two-year performance period transition award	16,779	15,101	5,034	March 2019
			5,034	March 2020
			5,033	March 2021

One-year performance period transition award	28,379	25,541	8,514	March 2018
			8,514	March 2019
			8,513	March 2020

2018 LTIP Award:
Three-year performance period award	198,397	*	*

* Not yet earned as performance period not complete.

2018 Executive Incentive Compensation Plan (2018 Executive Plan)

The company’s stockholders approved the 2018 Executive Plan in May 2018, and 2.0 million shares of company stock were reserved for issuance through February 28, 2028, succeeding the 2013 Executive Incentive Compensation Plan upon its expiration on February 28, 2018. Pursuant to the company’s 2018 Executive Plan, certain senior management members of the company are eligible to receive cash bonuses based on predetermined formulas. In the event the bonus exceeds the predetermined maximum cash payout, the excess bonus up to a fixed percentage of base salary is distributed in shares of the company’s stock, of which one-third of the shares vest immediately and the remaining shares vest in equal annual installments over an additional two-year service-based vesting period requirement. At December 31, 2018, 1.8 million shares under the 2018 Executive Plan remained available for issuance. Pursuant to the 2018 Executive Plan, 157,000 shares were awarded with a market value of $5.8 million. Pursuant to the preceding 2013 Executive Plan, 117,000 shares were awarded with a market value of $5.3 million and $4.0 million for the 2017 and 2016 award years, respectively.