Stock Compensation

Under stockholder approved stock-based plans, stock options, stock appreciation rights, restricted stock and restricted stock units may be granted to officers, directors and other key employees. At June 30, 2019, 5.4 million shares of unissued common stock of the company were available for granting under these plans.

As of June 30, 2019, the company has granted non-qualified stock options and restricted stock units under these plans. The company recognizes compensation cost, net of a forfeiture rate, in selling, general and administrative expense, and recognizes compensation cost only for those awards expected to vest. The company estimates the forfeiture rate based on its historical experience and its expectations about future forfeitures.

During the six months ended June 30, 2019 and 2018, the company recorded $7.3 million and $7.3 million of share-based compensation expense, respectively, which was comprised of $7.3 million and $7.2 million of restricted stock unit expense and zero and $0.1 million of stock option expense, respectively.

There were no grants of stock option awards during the six months ended June 30, 2019 and 2018. As of June 30, 2019, 548,273 stock option awards with a weighted-average exercise price of $23.53 are outstanding.

Restricted stock unit awards may contain time-based units, performance-based units, total shareholder return market-based units, or a combination of these units. Each performance-based and market-based unit will vest into zero to two shares depending on the degree to which the performance or market conditions are met. Compensation expense for performance-based awards is recognized as expense ratably for each installment from the date of grant until the date the restrictions lapse, and is based on the fair market value at the date of grant and the probability of achievement of the specific performance-related goals. Compensation expense for market-related awards is recognized as expense ratably over the measurement period, regardless of the actual level of achievement, provided the service requirement is met. Time-based restricted stock unit grants for the company’s directors vest upon award and compensation expense for such awards is recognized upon grant.

A summary of restricted stock unit activity for the six months ended June 30, 2019 follows (shares in thousands):



	Restricted Stock Units		Weighted- Average Grant-Date Fair Value
Outstanding at December 31, 2018	2,151		$	12.90
Granted	1,317		15.04
Vested	(1,097	)	13.23
Forfeited and expired	(211	)	13.71
Outstanding at June 30, 2019	2,160		14.16

The aggregate weighted-average grant-date fair value of restricted stock units granted during the six months ended June 30, 2019 and 2018 was $16.8 million and $17.9 million, respectively. The fair value of restricted stock units with time and performance conditions was determined based on the trading price of the company’s common shares on the date of grant. The fair value of awards with market conditions was estimated using a Monte Carlo simulation with the following weighted-average assumptions:



	Six Months Ended June 30,
	2019			2018
Weighted-average fair value of grant	$	16.58		$	15.84
Risk-free interest rate⁽ⁱ⁾	2.49		%	2.26		%
Expected volatility⁽ⁱⁱ⁾	47.91		%	52.97		%
Expected life of restricted stock units in years⁽ⁱⁱⁱ⁾	2.87			2.88
Expected dividend yield	—		%	—		%

⁽ⁱ⁾Represents the continuously compounded semi-annual zero-coupon U.S. treasury rate commensurate with the remaining performance period

⁽ⁱⁱ⁾Based on historical volatility for the company that is commensurate with the length of the performance period

⁽ⁱⁱⁱ⁾Represents the remaining life of the longest performance period

As of June 30, 2019, there was $18.9 million of total unrecognized compensation cost related to outstanding restricted stock units granted under the company’s plans. That cost is expected to be recognized over a weighted-average period of 2.2 years. The aggregate weighted-average grant-date fair value of restricted stock units vested during the six months ended June 30, 2019 and 2018 was $14.5 million and $10.1 million, respectively.

Common stock issued upon exercise of stock options or upon lapse of restrictions on restricted stock units are newly issued shares. In light of its tax position, the company is currently not recognizing any tax benefits from the exercise of stock options or upon issuance of stock upon lapse of restrictions on restricted stock units.