The Company sponsors various short-term incentive and LTI plans for eligible employees, which may be delivered through various programs, such as RSUs, restricted stock, performance stock units, and AIP and LTI cash. All incentive awards are subject to clawback provisions. Awards for performance stock units vest over a period of three years and are paid in cash. AIP is the Company's short-term cash incentive plan for key employees that provides for potential annual cash awards based on the Company's performance and/or the achievement of business unit and individual performance objectives. Awards under the LTI cash plan generally cliff vest after three years from the date of the award and are paid in cash. Compensation expense for incentive plans with cash payouts was $245 million, $203 million, and $150 million for the years ended December 31, 2015, 2014, and 2013, respectively.

Stock-Based Compensation

The Company provides stock-based awards through the 2009 Stock Plan under which the Compensation Committee of the Board of Directors has the authority to grant stock options, stock appreciation rights, restricted stock, performance stock units, and RSUs to key employees of the Company. Award vesting may be conditional based upon individual, business unit, Company, and/or performance relative to peer group metrics.

As amended and restated effective January 1, 2014, following approval by the Compensation Committee of the Board, shareholders approved an amendment to the 2009 Stock Plan to remove the sub-limit on shares available for grant that may be issued as restricted stock or RSUs. Accordingly, all 17 million remaining authorized shares previously under the Plan became available for grant as stock options, stock appreciation rights, restricted stock, or RSUs. Prior to the amendment, only a portion of such shares were available to be granted as either restricted stock or RSUs. At December 31, 2015, approximately 16 million shares were available for grant.

Shares or units of restricted stock may be granted to employees and directors. Generally, grants to employees either cliff vest after three years or vest pro-rata annually over three years. Restricted stock grants may be subject to one or more criteria, including employment, performance, or other conditions as established by the Compensation Committee at the time of grant. Any shares of restricted stock that are forfeited will again become available for issuance under the Stock Plan. An employee or director has the right to vote the shares of restricted stock after grant until they are forfeited. Compensation cost for restricted stock and RSUs is generally equal to the fair market value of the shares on the grant date of the award and is amortized to compensation expense over the vesting period. Dividends are paid on awarded, unvested restricted stock.

The Company accrues and reinvests dividends in equivalent shares of SunTrust common stock for unvested RSU awards, which are paid out when the underlying RSU award vests. Generally, RSU awards are classified as equity. However, during 2012 there were 574,257 RSUs granted that were classified as a liability because the grant date had not been achieved as defined under U.S. GAAP. These awards were granted with a fair value of $21.67 per unit on the grant date. The balance of RSUs classified as a liability at December 31, 2015 and 2014 was $23 million and $21 million, respectively.

Consistent with the Company's 2014 decision to discontinue the issuance of stock options, no stock options were granted during the years ended December 31, 2015 and 2014. For options issued in 2013 the fair value of option grants was estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions presented in the following table.



	Year Ended December 31
	2015 ¹	2014 ¹	2013
Dividend yield	N/A	N/A	1.28	%
Expected stock price volatility	N/A	N/A	30.98
Risk-free interest rate (weighted average)	N/A	N/A	1.02
Expected life of options	N/A	N/A	6 years

¹ Assumptions are not applicable ("N/A") as the Company discontinued the issuance of stock options and no stock options were granted for the years ended December 31, 2015 and 2014.

The Company used the projected dividend to be paid as the dividend yield assumption. The expected stock price volatility represented the implied volatility of SunTrust stock. The risk-free interest rate was derived from the U.S. Treasury yield curve in effect at the time of grant based on the expected life of the option. The expected life of options represented the period of time that the stock options were expected to be outstanding and was derived from historical data that was used to evaluate patterns such as stock option exercise and employee termination.

Stock options were granted at an exercise price that was no less than the fair market value of a share of SunTrust common stock on the grant date and were either tax-qualified incentive stock options or non-qualified stock options. Stock options typically vest pro-rata over three years and generally have a maximum contractual life of ten years. Upon exercise, shares are generally issued from treasury stock. The weighted average fair value of options granted during year ended December 31, 2013 was $7.37 per share.