In accordance with the guidance on share-based compensation, the Company recognized stock-based compensation costs based on the grant date fair value. For the years ended December 31, 2018, 2017 and 2016, the Company recognized compensation costs net of a 5% per year estimated forfeiture rate on a pro-rated basis over the remaining vesting period.

Under the 2017 Assurant, Inc. Long-Term Equity Incentive Plan (the “ALTEIP”), the Company is authorized to issue up to 1,500,000 new shares of the Company’s common stock to employees, officers and non-employee directors. Under the ALTEIP, the Company may grant awards based on shares of its common stock, including stock options, stock appreciation rights (“SARs”), restricted stock (including performance shares), unrestricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”) and dividend equivalents. All share-based grants are awarded under the ALTEIP.

The Compensation Committee of the Board (the “Compensation Committee”) awards RSUs and PSUs annually. RSUs and PSUs are promises to issue actual shares of common stock at the end of a vesting period or performance period. The RSUs granted to employees under the ALTEIP are based on salary grade and performance and generally vest one-third each year over a three-year period. RSUs receive dividend equivalents in cash during the restricted period and do not have voting rights during the restricted period. RSUs granted to non-employee directors also vest one-third each year over a three-year period, however, issuance of vested shares and payment of dividend equivalents is deferred until separation from Board service. PSUs accrue dividend equivalents during the performance period based on a target payout and will be paid in cash at the end of the performance period based on the actual number of shares issued.

Under the ALTEIP, the Company’s CEO is authorized by the Board to grant common stock, restricted stock and RSUs to employees other than the Company’s executive officers. The Compensation Committee recommends the annual share allotment that can be awarded by the CEO under this program. Restricted stock and RSUs granted under this program may have different vesting periods.

The fair value of RSUs is estimated using the fair market value of a share of the Company’s common stock at the date of grant. The fair value of PSUs is estimated using the Monte Carlo simulation model. The number of shares of common stock a participant will receive upon vesting of a PSU award is contingent upon the Company’s performance with respect to selected metrics, as identified below. The payout levels for 2018, 2017 and 2016 awards can vary between 0% and 200% (maximum) of the target (100%) ALTEIP award amount, based on the Company’s level of performance against the selected metrics.

2018 PSU Performance Goals. In July 2018, the Compensation Committee granted PSUs to the management committee that reflect the remaining half of each executive’s annual target long-term incentive opportunity plus an additional opportunity to further incentivize and retain executives with respect to the TWG acquisition. Payout for the PSUs is determined by reference to two metrics measured over a thirty-month performance period: (i) total shareholder return relative to the S&P 500 Index (weighted at 60%) and (ii) the realization of net pre-tax synergies in connection with the TWG acquisition (weighted at 40%) provided that a net operating earnings per share (excluding reportable catastrophes) goal is met in 2020. The aggregate grant date fair value of the additional target opportunity provided to all members of the management committee, including the Company’s CEO and other named executive officers, was $11.1 million. The additional target opportunity granted to the Company’s CEO had a grant date fair value of $4.0 million.

2017 and 2016 PSU Performance Goals. The Compensation Committee established total shareholder return and net operating earnings per diluted share, excluding reportable catastrophes, as the two equally weighted performance measures for PSU awards in 2017 and 2016. Total shareholder return is defined as appreciation in Company’s common stock plus dividend yield to stockholders and will be measured by the performance of the Company relative to the S&P 500 Index over the three-year performance period. Net operating earnings per diluted common share, excluding reportable catastrophes, is a Company-specific profitability metric and is defined as the Company’s net operating earnings, excluding reportable catastrophes, divided by the number of fully diluted common shares outstanding at the end of the period. This metric is an absolute metric that is measured against a three-year cumulative target established by the Compensation Committee at the award date and is not tied to the performance of peer companies.



	Restricted Stock Units		Weighted-Average Grant-Date Fair Value
Restricted stock units outstanding at December 31, 2017	662,794		$	85.57
Grants (1)	527,125		93.20
Vests (2)	(267,779	)	80.18
Forfeitures and adjustments	(57,736	)	88.70
Restricted stock units outstanding at December 31, 2018	864,404		$	90.26
Restricted stock units vested, but deferred at December 31, 2018	70,806		$	69.56



	Performance Share Units		Weighted-Average Grant-Date Fair Value
Performance share units outstanding, December 31, 2017	798,592		$	83.30
Grants (1)	164,957		123.51
Vests (2)	(177,884	)	61.82
Performance adjustment (3)	(121,447	)	61.82
Forfeitures and adjustments	(29,310	)	105.84
Performance share units outstanding, December 31, 2018	634,908		$	102.91

PSU grants above represent initial target awards and do not reflect potential increases or decreases resulting from the financial performance objectives to be determined at the end of the prospective performance period. The actual number of PSUs to be issued at the end of each performance period will range from 0% to 200% of the initial target awards.

Portions of the compensation expense recorded in prior periods were reversed in 2017 related to the Company’s level of actual performance as measured against pre-established performance goals and peer group results. As of December 31, 2018, there was $22.1 million of unrecognized compensation cost related to outstanding PSUs. That cost is expected to be recognized over a weighted-average period of 0.84 years.

The fair value of PSUs with market conditions was estimated on the date of grant using a Monte Carlo simulation model, which utilizes multiple variables that determine the probability of satisfying the market condition stipulated in the award. Expected volatilities for awards granted during the years ended December 31, 2018, 2017 and 2016 were based on the historical prices of the Company’s common stock and peer group. The expected term for grants issued during the years ended December 31, 2018, 2017 and 2016 was assumed to equal the average of the vesting period of the PSUs. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant.

Under the Employee Stock Purchase Plan (the “ESPP”), the Company is authorized to issue up to 5,000,000 new shares of common stock to employees who are participants in the ESPP. The ESPP allows eligible employees to contribute, through payroll deductions, portions of their after-tax compensation in each offering period toward the purchase of shares of the Company’s common stock. There are two offering periods during the year (January 1 through June 30 and July 1 through December 31) and shares of common stock are purchased at the end of each offering period at 90% of the lower of the closing price of the common stock on the first or last day of the offering period. Participants must be employed on the last trading day of the offering period in order to purchase shares of common stock under the ESPP. The maximum number of shares of common stock that can be purchased is 5,000 per employee. Participants’ contributions are limited to a maximum contribution of $7.5 thousand per offering period, or $15.0 thousand per year.

The ESPP is offered to individuals who are scheduled to work a certain number of hours per week, have been continuously employed for at least six months by the start of the offering period, are not temporary employees (employed less than 12 months) and have not been on a leave of absence for more than 90 days immediately preceding the offering period.

In January 2019, the Company issued 42,950 shares of common stock at a discounted price of $80.50 for the offering period of July 1, 2018 through December 31, 2018. In January 2018, the Company issued 39,853 shares at a discounted price of $90.76 for the offering period of July 1, 2017 through December 31, 2017.

In July 2018, the Company issued 40,571 shares of common stock to employees at a discounted price of $89.31 for the offering period of January 1, 2018 through June 30, 2018. In July 2017, the Company issued 42,367 shares of common stock to employees at a discounted price of $84.71 for the offering period of January 1, 2017 through June 30, 2017.

The compensation expense recorded related to the ESPP was $1.5 million for the year ended December 31, 2018, and $1.3 million for the years ended 2017 and 2016. The related income tax benefit for disqualified disposition was $0.2 million for the years ended December 31, 2018, 2017 and 2016.

The fair value of each award under the ESPP was estimated at the beginning of each offering period using the Black-Scholes option-pricing model and assumptions in the table below. Expected volatilities are based on implied volatilities from traded options on the Company’s common stock and the historical volatility of the Company’s common stock. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is based on the current annualized dividend and common stock price as of the grant date.



	For awards issued during the years ended December 31,
	2018	2017	2016
Expected volatility	20.90 - 27.73%	21.83 - 27.20%	18.30 - 22.02%
Risk free interest rates	1.61 - 2.14%	0.37 - 0.65%	0.13 - 0.49%
Dividend yield	1.49 - 1.56%	1.61 - 1.69%	1.74 - 1.89%
Expected term (years)	0.5	0.5	0.5