18.

Compensation

The Company’s Compensation Committee may grant various equity-based awards, including restricted stock units, restricted stock, stock options, limited partnership units and exchange rights for shares of the Company’s Class A common stock upon exchange of limited partnership units and FPUs. A maximum of 300 million shares of the Company’s Class A common stock are authorized to be delivered or cash settled pursuant to awards granted. As of June 30, 2015, the limit on the aggregate number of shares authorized to be delivered allows for the grant of future awards relating to 137.9 million shares. Upon vesting of RSUs, issuance of restricted stock or exercise of employee stock options, the Company generally issues new shares of the Company’s Class A common stock.

Limited Partnership Units

A summary of the activity associated with limited partnership units is as follows:


	Number of Units

Balance at December 31, 2014		53,561,990
Granted		16,807,711
Redeemed/exchanged units		(4,924,915	)
Forfeited units		(1,076,505	)

Balance at June 30, 2015		64,368,281

During the three months ended June 30, 2015 and 2014, the Company granted exchangeability on 2.7 million and 3.0 million limited partnership units for which the Company incurred compensation expense, before associated income taxes, of $25.6 million and $20.0 million, respectively. During the six months ended June 30, 2015 and 2014, the Company granted exchangeability on 7.1 million and 7.5 million limited partnership units for which the Company incurred compensation expense, before associated income taxes, of $62.2 million and $49.2 million, respectively.

As of June 30, 2015 and December 31, 2014, the number of limited partnership units exchangeable into shares of Class A common stock at the discretion of the unit holder was 4.1 million and 2.0 million, respectively.

As of June 30, 2015 and December 31, 2014, the notional value of the limited partnership units with a post-termination pay-out amount held by executives and non-executive employees, awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses was $107.4 million and $68.8 million, respectively. As of June 30, 2015 and December 31, 2014, the aggregate estimated fair value of these limited partnership units was $18.5 million and $11.8 million. The number of outstanding limited partnership units with a post-termination pay-out as of June 30, 2015 and December 31, 2014 was 14.6 million and 9.8 million, respectively, of which 9.2 million and 6.9 million were unvested.

Certain of the limited partnership units with a post-termination pay-out have been granted in connection with the Company’s acquisitions. As of June 30, 2015 and December 31, 2014, the aggregate estimated fair value of these acquisition related limited partnership units was $26.4 million and $24.2 million respectively.

Compensation expense related to limited partnership units with a post-termination pay-out amount is recognized over the stated service period. These units generally vest between three and five years from the date of grant. The Company recognized compensation expense, before associated income taxes, related to these limited partnership units that were not redeemed of $2.8 million and $2.3 million for the three months ended June 30, 2015 and 2014, respectively, The Company recognized compensation expense, before associated income taxes, related to these limited partnership units that were not redeemed of $7.3 million and $3.4 million for the six months ended June 30, 2015 and 2014, respectively. These are included in Compensation and employee benefits in the Company’s unaudited condensed consolidated statements of operations.

The limited partnership units generally receive quarterly allocations of net income, which are cash distributed on a quarterly basis and generally contingent upon services being provided by the unit holders. The allocation of income to limited partnership units and FPUs was $0.6 million and $2.4 million for the three months ended June 30, 2015 and 2014, respectively. The allocation of income to limited partnership units and FPUs was $1.1 million and $4.5 million for the six months ended June 30, 2015 and 2014, respectively.

Restricted Stock Units

A summary of the activity associated with RSUs is as follows:


	Restricted Stock Units			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Term (Years)
Balance at December 31, 2014		2,140,932		$	4.70		1.74
Granted		461,685			8.46
Delivered units		(845,395	)		4.95
Forfeited units		(65,383	)		5.29

Balance at June 30, 2015		1,691,839		$	5.58		1.80

The fair value of RSUs awarded to employees and directors is determined on the date of grant based on the market value of Class A common stock (adjusted if appropriate based upon the award’s eligibility to receive dividends), and is recognized, net of the effect of estimated forfeitures, ratably over the vesting period. The Company uses historical data, including historical forfeitures and turnover rates, to estimate expected forfeiture rates for both employee and director RSUs. Each RSU is settled in one share of Class A common stock upon completion of the vesting period.

During the six months ended June 30, 2015 and 2014, the Company granted 0.5 million and 0.8 million, respectively, of RSUs with aggregate estimated grant date fair values of approximately $3.9 million and $4.4 million, respectively, to employees and directors. These RSUs were awarded in lieu of cash compensation for salaries, commissions and/or discretionary or guaranteed bonuses. RSUs granted to these individuals generally vest over a two- to four-year period.

For RSUs that vested during the six months ended June 30, 2015 and 2014, the Company withheld shares valued at $1.2 million and $0.8 million, respectively, to pay taxes due at the time of vesting.

As of June 30, 2015 and December 31, 2014, the aggregate estimated grant date fair value of outstanding RSUs was approximately $9.4 million and $10.1 million, respectively.

Compensation expense related to RSUs, before associated income taxes, was approximately $1.2 million and $1.0 million for the three months ended June 30, 2015 and 2014, respectively. Compensation expense related to RSUs, before associated income taxes, was approximately $2.7 million and $2.9 million for the six months ended June 30, 2015 and 2014, respectively. As of June 30, 2015, there was approximately $11.2 million of total unrecognized compensation expense related to unvested RSUs.

Restricted Stock

Pursuant to the Global Partnership Restructuring Program in June 2013, the Company granted approximately 41 million restricted shares of the Company’s Class A common stock. Transferability of the shares of restricted stock is not subject to continued employment or service with the Company or any affiliate or subsidiary of the Company; however, transferability is subject to compliance with BGC Partners’ and its affiliates’ customary noncompete obligations. During the three months ended June 30, 2015 approximately 27 thousand shares were forfeited in connection with this clause. The restricted shares are generally saleable by partners in five to ten years. Partners who agree to extend the length of their employment agreements and/or other contractual modifications sought by the Company are expected to be able to sell their restricted shares over a shorter time period. During the six months ended June 30, 2015 and 2014, the Company released the restrictions with respect to approximately 1.9 million and 5.6 million of such shares, respectively.

Deferred Cash Compensation

As part of the acquisition of GFI, the Company now maintains a Deferred Cash Award Program which was adopted by GFI on February 12, 2013, and provides for the grant of deferred cash incentive compensation to eligible employees. The Company may pay certain bonuses in the form of deferred cash compensation awards, which generally vest over a future service period. In addition, prior to the completion of the tender offer, GFI’s outstanding RSUs were converted into the right to receive an amount in cash equal to $6.10 per unit, with such cash payable on and subject to the terms and conditions of the original vesting schedule of each RSU. The total compensation expense recognized in relation to the deferred cash compensation awards for the three months ended June 30, 2015 was $8.2 million. The total compensation expense recognized in relation to the deferred cash compensation awards for the six months ended June 30, 2015 was $11.4 million. Total unrecognized compensation cost related to deferred cash compensation prior to the consideration of forfeitures, was approximately $44.5 million and is expected to be recognized over a weighted-average period of 1.55 years.

Stock Options

A summary of the activity associated with stock options is as follows:


	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Balance at December 31, 2014		2,184,238		$	9.66		2.3	$	—
Granted		—			—
Exercised options		(30,000	)		8.98
Forfeited options		(5,000	)		9.57

Options exercisable at June 30, 2015		2,149,238		$	9.67		1.9	$	—

The Company did not grant any stock options during the three months ended June 30, 2015 and 2014. There were 30 thousand stock options exercised during the six months ended June 30, 2015. There were no stock options exercised during the six months ended June 30, 2014.

The Company did not record any compensation expense related to stock options for the three or six months ended June 30, 2015 or 2014, as all of these options had vested in prior years. As of June 30, 2015, all of the compensation expense related to stock options was fully recognized.