Common Stock

Equity Plans — We have granted a variety of awards, including common stock, restricted stock, restricted stock units, performance units, stock appreciation rights (“SARs”), and stock options to our directors, officers, and employees.

Accounting Methods — We recorded compensation expense (net of taxes) of less than $1 million in each of the three month periods ended September 30, 2017 and 2016, less than $1 million in compensation expense for the nine month period ended September 30, 2017 and $1 million for the nine month period ended September 30, 2016 related to nonqualified stock options as part of our selling, general and administrative expense. This had no impact on basic or diluted earnings per share for each of the three month periods ended September 30, 2017 and 2016 and a decrease of less than $0.01 and $0.01 in both basic and diluted earnings per share for the nine month periods ended September 30, 2017 and 2016.

For employees eligible to retire at grant date, we immediately expense stock options and restricted stock. If an employee becomes retiree eligible during the vesting period, we amortize the expense for stock options and restricted stock over a period starting at the grant date to the date an employee becomes retiree eligible.

As of September 30, 2017, there was no unrecognized compensation cost related to our stock option awards.

Compensation expense for restricted stock, restricted stock units, long-term performance units and SARs (net of taxes) was $2 million and $5 million for the three month periods ended September 30, 2017 and 2016, respectively, and $10 million and $14 million for the nine month periods ended September 30, 2017 and 2016, respectively, and was recorded in selling, general, and administrative expense in our condensed consolidated statements of income.

Cash received from stock option exercises for the nine month periods ended September 30, 2017 and 2016 was $7 million and $4 million, respectively.

Stock options exercised in the first nine months of 2017 and 2016 generated a tax benefit of $2 million and $1 million, respectively.

Stock Options — The following table reflects the status and activity for all options to purchase common stock for the period indicated:



	Nine Months Ended September 30, 2017
	Shares Under Option		Weighted Avg. Exercise Prices		Weighted Avg. Remaining Life in Years	Aggregate Intrinsic Value
						(Millions)
Outstanding Stock Options
Outstanding, January 1, 2017	606,525		$	38.54	2.6	$	12
Canceled	(2,214	)	56.23			—
Forfeited	(1,107	)	56.23			—
Exercised	(164,863	)	33.70			5
Outstanding, March 31, 2017	438,341		$	40.22	2.6	$	11
Forfeited	(278	)	66.54			—
Exercised	(3,242	)	45.42			—
Outstanding, June 30, 2017	434,821		$	40.16	2.4	$	8
Forfeited	(41,369	)	19.53			—
Exercised	(50,125	)	34.79			1
Outstanding, September 30, 2017	343,327		$	43.44	2.4	$	4

There have been no stock options granted since 2015. The total fair value of shares vested from options that were granted prior to 2015 was $2 million and $4 million for the periods ended September 30, 2017 and 2016, respectively.

Restricted Stock — The following table reflects the status for all nonvested restricted shares for the period indicated:



	Nine Months Ended September 30, 2017
	Shares		Weighted Avg. Grant Date Fair Value
Nonvested Restricted Shares
Nonvested balance at January 1, 2017	591,416		$	44.63
Granted	182,543		68.04
Vested	(261,003	)	50.95
Forfeited	(65,354	)	53.12
Nonvested balance at March 31, 2017	447,602		$	49.25
Granted	23,295		57.22
Vested	(15,336	)	46.77
Forfeited	(6,271	)	48.10
Nonvested balance at June 30, 2017	449,290		$	49.79
Granted	2,001		55.80
Vested	(4,581	)	55.52
Forfeited	(10,234	)	44.82
Nonvested balance at September 30, 2017	436,476		$	49.87

The fair value of restricted stock grants is usually equal to the average of the high and low trading price of our stock on the date of grant. As of September 30, 2017, approximately $10 million of total unrecognized compensation costs related to restricted stock awards is expected to be recognized over a weighted-average period of approximately 1.9 years. The total fair value of restricted shares vested was $14 million and $9 million at September 30, 2017 and 2016, respectively.

Share Repurchase Program — In January 2015, our Board of Directors approved a share repurchase program, authorizing our company to repurchase up to $350 million of our outstanding common stock over a three year period. In October 2015, our Board of Directors expanded this share repurchase program, authorizing the repurchase of an additional $200 million of the Company's outstanding common stock. In February 2017, our Board of Directors authorized the repurchase of up to $400 million of the Company's outstanding common stock over the next three years. This includes $112 million that remained authorized under earlier repurchase programs. The Company anticipates acquiring the shares through open market or privately negotiated transactions, which will be funded through cash from operations. The repurchase program does not obligate the Company to repurchase shares within any specific time or situations, and opportunities in higher priority areas could affect the cadence of this program. We repurchased 2.3 million shares for $131 million through this program in the nine months ended September 30, 2017. Since we announced the share repurchase program in January 2015, we have repurchased 10.7 million shares for $569 million through September 30, 2017.

Treasury stock shares including repurchased shares were 13,966,381 and 11,655,938 shares at September 30, 2017 and December 31, 2016, respectively.

Dividends — On February 1, 2017, Tenneco announced the reinstatement of a quarterly dividend program. We expect to pay a quarterly dividend of $0.25 per share on our common stock, representing a planned annual dividend of $1.00 per share. In March 2017, we paid an initial quarterly dividend of $0.25 per share, or $13 million. In June 2017, we paid a quarterly dividend of $0.25 per share, or $13 million. In September 2017, we paid a quarterly dividend of $0.25 per share, or $14 million. While we currently expect that comparable quarterly cash dividends will continue to be paid in the future, our dividend program and the payment of future cash dividends under the program are subject to continued capital availability, the judgment of our Board of Directors and our continued compliance with the provisions pertaining to the payment of dividends under our debt agreements.

Long-Term Performance Units, Restricted Stock Units and SARs — Long-term performance units, restricted stock units and SARs are paid in cash and recognized as a liability based upon their fair value. As of September 30, 2017, $19 million of total unrecognized compensation costs is expected to be recognized over a weighted-average period of approximately 1.9 years.