Stock-Based Compensation

As of December 31, 2015, we have two principal share-based compensation plans (collectively, the “Long-Term Incentive Compensation Plan”).

The compensation cost charged against income for these plans was $26.9 million, $26.1 million and $32.2 million for the years ended December 31, 2015, 2014 and 2013, respectively. Our accounting policy for the recognition of compensation expense for awards with pro-rata vesting is to expense the costs ratably over the vesting periods.

Additionally, HEP maintains a share-based compensation plan for Holly Logistic Services, L.L.C.'s non-employee directors and certain executives and employees. Compensation cost attributable to HEP’s share-based compensation plan was $3.5 million, $3.5 million and $3.6 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Restricted Stock and Restricted Stock Units

Under our Long-Term Incentive Compensation Plan, we grant certain officers and other key employees restricted stock and restricted stock unit awards with awards generally vesting over a period of one to three years. Restricted stock award recipients are generally entitled to all the rights of absolute ownership of the restricted shares from the date of grant including the right to vote the shares and to receive dividends. Upon vesting, restrictions on the restricted shares lapse at which time they convert to common shares. In addition, we grant non-employee directors restricted stock unit awards, which typically vest over a period of one year and are payable in stock. The fair value of each restricted stock and restricted stock unit award is measured based on the grant date market price of our common shares and is amortized over the respective vesting period.

A summary of restricted stock and restricted stock unit activity and changes during the year ended December 31, 2015 is presented below:



Restricted Stock and Restricted Stock Units	Grants		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value ($000)

Outstanding at January 1, 2015 (non-vested)	669,777		$	44.12
Granted	447,544		49.92
Vesting (transfer/conversion to common stock)	(337,159	)	42.03
Forfeited	(57,637	)	48.40
Outstanding at December 31, 2015 (non-vested)	722,525		$	48.35	$	27,950

For the years ended December 31, 2015, 2014 and 2013, restricted stock and restricted stock units vested having a grant date fair value of $14.2 million, $18.2 million and $16.2 million, respectively. For the years ended December 31, 2014 and 2013, we granted restricted stock and restricted stock units having a weighted average grant date fair value of $42.03 and $42.00, respectively. As of December 31, 2015, there was $23.7 million of total unrecognized compensation cost related to non-vested restricted stock and restricted stock unit grants. That cost is expected to be recognized over a weighted-average period of 1.6 years.

Performance Share Units

Under our Long-Term Incentive Compensation Plan, we grant certain officers and other key employees performance share units, which are payable in stock upon meeting certain criteria over the service period, and generally vest over a period of three years. Under the terms of our performance share unit grants, awards are subject to “financial performance” and “market performance” criteria. Financial performance is based on our financial performance compared to a peer group of independent refining companies, while market performance is based on the relative standing of total shareholder return achieved by HollyFrontier compared to peer group companies. The number of shares ultimately issued under these awards can range from zero to 200% of target award amounts. As of December 31, 2015, estimated share payouts for outstanding non-vested performance share unit awards averaged approximately 85% of target amounts.

A summary of performance share unit activity and changes during the year ended December 31, 2015 is presented below:



Performance Share Units	Grants

Outstanding at January 1, 2015 (non-vested)	725,054
Granted	209,589
Vesting and transfer of ownership to recipients	(209,592	)
Forfeited	(87,113	)
Outstanding at December 31, 2015 (non-vested)	637,938

For the year ended December 31, 2015, we issued 136,896 shares of common stock, representing a 65% payout on vested performance share units having a grant date fair value of $10.4 million. For the years ended December 31, 2014 and 2013, we issued common stock upon the vesting of the performance share units having a grant date fair value of $14.3 million and $11.6 million, respectively. As of December 31, 2015, there was $16.4 million of total unrecognized compensation cost related to non-vested performance share units having a grant date fair value of $45.86 per unit. That cost is expected to be recognized over a weighted-average period of 1.8 years.