Share-Based Compensation

3 Months Ended

Mar. 31, 2017

Share-Based Compensation

Share-Based Compensation

10.Share-Based Compensation

During the fourth quarter of 2016, the Company established a Cash Settled RSU Plan (the “RSU Plan”), which allows the Company to grant cash-settled restricted stock units (“RSUs”) to attract and retain key personnel and enable them to participate in the long-term growth of the Company.  Unvested RSUs have no purchase price and vest in 25% increments over four years, beginning on the first anniversary of the grant date.  On the vesting date, RSU holders receive a lump sum cash payment equal to the fair market value of one share of the Company’s Class A common stock, par value $0.01, for each RSU that has vested, subject to applicable tax withholdings.  Holders of unvested RSUs do not have stockholders’ rights, but are entitled to receive dividend equivalent payments for each RSU equal to the dividend paid on one share of our Class A common stock.   Unvested RSUs are forfeited upon the termination of employment with, or service to, the Company, as applicable, dependent on the circumstances of termination.  We treat RSUs as liability-classified awards and, therefore, account for them at fair value based on the closing price of our Class A common stock on the reporting date, which results in variable compensation expense over the vesting period.  In the first quarter of 2017, we granted 1,131,538 RSUs under the RSU Plan.  The aggregate value of unvested RSUs on March 31, 2017 was $18.8 million based on the closing price of our Class A common stock on that date.    

In the first quarter of 2017, we granted 1,179,443 shares of restricted stock with an average fair value of $19.29 per share under the Company’s 1998 Stock Incentive Plan, as amended and restated.  The value of those shares at the grant date, aggregating to $22.8 million, will be amortized to expense over a four-year vesting period.