NOTE 12: STOCK-BASED COMPENSATION

On May 5, 2016, the 2016 Incentive Compensation Plan (the “Incentive Compensation Plan”) and the Stock Compensation Plan for Non-Employee Directors (the “Directors Plan” and, together with the Incentive Compensation Plan, the “2016 Equity Plans”) were approved by the Company’s shareholders for the purpose of granting stock awards to officers, employees and Board members of the Company and its subsidiaries, as further described in Note 16 to the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2016. There are 5,100,000 shares of Class A Common Stock authorized for issuance under the Incentive Compensation Plan and 200,000 shares of Class A Common Stock authorized for issuance under the Directors Plan, of which 2,966,048 shares and 164,942 shares, respectively, were available for grant as of June 30, 2017.

In connection with the 2017 Special Cash Dividend and pursuant to the terms of the Company’s equity plans, the number of the Company’s outstanding equity awards and the exercise price of the non-qualified stock options (“NSOs”), were adjusted to preserve the fair value of the awards immediately before and after the 2017 Special Cash Dividend. The Company’s Class A Common Stock began trading ex-dividend on January 11, 2017 (the “Ex-dividend Date”). The conversion ratio (the “Ratio”) used to adjust the awards was based on the ratio of (a) unaffected closing price of Class A Common Stock on the day before the Ex-dividend Date to (b) the opening price of Class A Common Stock on the Ex-dividend Date. As the above adjustments were made pursuant to existing anti-dilution provisions of the Company’s equity plans, the Company did not record any incremental compensation expense related to the conversion of the equity awards. The equity awards continue to vest over the original vesting period. The impact of this award activity is separately included in the line item “Adjustments due to the 2017 Special Cash Dividend” in the tables below.

The awards held as of the Ex-dividend Date were modified as follows:


•	Non-Qualified Stock Options - The number of NSOs outstanding as of the Ex-dividend Date was increased via the calculated Ratio and the strike price of NSOs was decreased via the Ratio in order to preserve the fair value of NSOs;


•	Restricted Stock Units - The number of outstanding restricted stock units (“RSUs”) as of the Ex-dividend Date was increased utilizing the calculated Ratio in order to preserve the fair value of RSUs; and


•	Performance Share Units - The number of outstanding performance share units (“PSUs”) as of the Ex-dividend Date was increased utilizing the calculated Ratio in order to preserve the fair value of PSUs.

Stock-based compensation for the three months ended June 30, 2017 and June 30, 2016 totaled $7 million and $10 million, respectively. There was no stock-based compensation expense recorded for the three months ended June 30, 2017 attributable to discontinued operations. Stock-based compensation expense attributable to discontinued operations for the three months ended June 30, 2016 totaled $1 million. Stock-based compensation for the six months ended June 30, 2017 and June 30, 2016 totaled $22 million and $18 million, respectively, including the expense attributable to discontinued operations of $2 million in each period.

For NSOs and RSUs granted prior to the 2017 Special Cash Dividend, the weighted-average exercise prices and weighted-average fair values, respectively, in the tables below reflect the historical values without giving effect to the adjustments due to the 2017 Special Cash Dividend.

A summary of activity and weighted average exercise prices related to the NSOs is reflected in the table below.



	Six Months Ended June 30, 2017
	Shares		Weighted Avg. Exercise Price
Outstanding, beginning of period	2,396,160		$	45.82
Granted	931,913		32.12
Exercised	(350,711	)	28.55
Forfeited	(375,634	)	28.95
Cancelled	(70,714	)	47.85
Adjustment due to the 2017 Special Cash Dividend	452,738		*
Outstanding, end of period	2,983,752		$	38.66
Vested and exercisable, end of period	1,247,501		$	47.70


*	Not meaningful

A summary of activity and weighted average fair values related to the RSUs is reflected in the table below.



	Six Months Ended June 30, 2017
	Shares		Weighted Avg. Fair Value
Outstanding, beginning of period	1,230,676		$	40.92
Granted	616,042		32.65
Dividend equivalent units granted	15,834		38.02
Vested	(555,039	)	38.31
Dividend equivalent units vested	(19,358	)	32.32
Forfeited	(300,472	)	32.03
Dividend equivalent units forfeited	(8,913	)	32.01
Adjustment due to the 2017 Special Cash Dividend	223,698		*
Outstanding and nonvested, end of period	1,202,468		$	32.64


*	Not meaningful

A summary of activity and weighted average fair values related to the unrestricted stock awards is as follows:



	Six Months Ended June 30, 2017
	Shares		Weighted Avg. Fair Value
Outstanding, beginning of period	—		$	—
Granted	10,147		34.98
Vested	(10,147	)	34.98
Outstanding and nonvested, end of period	—		$	—

A summary of activity and weighted average fair values related to the PSUs and Supplemental PSUs is reflected in the table below.



	Six Months Ended June 30, 2017
	Shares		Weighted Avg. Fair Value
Outstanding, beginning of period	347,000		$	27.23
Granted (1)	117,777		31.45
Dividend equivalent units granted	2,425		38.01
Vested	(145,621	)	34.22
Dividend equivalent units vested	(3,726	)	32.50
Forfeited	(46,836	)	33.73
Dividend equivalent units forfeited	(5,601	)	40.72
Adjustment due to the 2017 Special Cash Dividend (1)(2)	24,244		*
Outstanding and nonvested, end of period	289,662		$	22.05


*	Not meaningful


(1)	Represents shares of PSUs for which performance targets have been established and which are deemed granted under U.S. GAAP.


(2)	Excludes 19,725 PSUs which have not yet been deemed granted under U.S. GAAP.

As of June 30, 2017, the Company had not yet recognized compensation cost on nonvested awards as follows (dollars in thousands):



	Unrecognized Compensation Cost		Weighted Average Remaining Recognition Period
Nonvested awards	$	47,714	2.8