Share-based compensation plans

We have share-based compensation plans to attract and retain employees and nonemployee directors and to more closely align their interests with those of our shareholders.

We have granted share-based awards to employees under the 2005 Equity Incentive Plan ("2005 Plan"), the 2013 Equity Incentive Plan ("2013 Plan") and the 2017 Equity Incentive Plan (the "2017 Plan). These plans permit grants of restricted stock, restricted stock units, performance stock, performance units, stock appreciation rights, stock options, as well as other share-based awards to eligible employees. The 2013 Plan and the 2017 Plan also permit cash awards to eligible employees. The 2017 Plan became effective May 2017. No further grants of awards will be made under the 2005 Plan or the 2013 Plan, although awards under these prior plans remain outstanding.

We have granted deferred stock units to directors under the 2017 Plan. Share-based awards were previously granted to directors and remain outstanding under the Non-Employee Director's Equity Plan and the Directors’ Stock Accumulation Plan, which has expired.

Outstanding awards at March 31, 2018, include performance share units, restricted stock units, deferred stock units, performance-based stock options, time-based stock options and certain awards that will be settled in cash.

Compensation Expense

Compensation expense is measured using the fair-value-based method. For employee and director awards considered equity grants, compensation expense is recognized from the award or grant date to the earlier of the retirement-eligible date or the vesting date. For awards considered liability awards, compensation cost is based on the change in the fair value of the instrument for each reporting period and the percentage of the requisite service that has been rendered. Compensation cost associated with liability awards was not significant in the three months ended March 31, 2018 or the prior year period.

Compensation expenses are classified as selling, general and administrative expenses in the condensed consolidated statements of operations. Compensation expenses for the share-based awards were as follows:



	Compensation Expense
	Three Months Ended March 31,
(in millions)	2018			2017

Performance Share Units	$	3.9		2.6
Market Share Units	0.1			0.1
Restricted Stock Units	1.8			1.2
Deferred Stock Units and fees paid in stock	0.2			0.2
Stock Options	0.8			0.4
Share-based payment expense	6.8			4.5
Income tax benefit	(1.6		)	(1.6	)
Share-based payment expense, net of tax	$	5.2		2.9

Performance-Based Stock Options

In 2018, 2017 and 2016, we granted performance-based stock options that have a service condition as well as a market condition. In addition, some of the awards granted in 2016 contain a non-financial performance condition. We measure the fair value of these performance-based options at the grant date using a Monte Carlo simulation model.

The following table summarizes performance-based stock option activity during the first three months of 2018:



	Shares (in thousands)	Weighted-Average Grant-Date Fair Value
Outstanding balance as of December 31, 2017	879.8	$	8.04
Granted	417.6	16.73
Forfeited	—	—
Exercised	—	—
Outstanding balance as of March 31, 2018	1,297.4	$	10.83

Time-Based Stock Options

Prior to 2018, we granted time-based stock options that contain only a service condition. We measured the fair value of these time-based options at the grant date using a Black-Scholes-Merton option pricing model.

The following table summarizes time-based stock option activity during the first three months of 2018:



	Shares (in thousands)	Weighted-Average Grant-Date Fair Value
Outstanding balance as of December 31, 2017	40.6	$	8.66
Granted	—	—
Forfeited	—	—
Exercised	—	—
Outstanding balance as of March 31, 2018	40.6	$	8.66

Restricted Stock Units (“RSUs”)

We granted RSUs that contain only a service condition. We measure the fair value of RSUs based on the price of Brink’s stock at the grant date, adjusted for a discount for dividends not received or accrued during the vesting period.

The following table summarizes RSU activity during the first three months of 2018:



	Shares (in thousands)		Weighted-Average Grant-Date Fair Value
Nonvested balance as of December 31, 2017	265.8		$	39.80
Granted	79.0		72.28
Forfeited	(0.5	)	51.96
Vested	(90.1	)	36.11
Nonvested balance as of March 31, 2018	254.2		$	51.18

Performance Share Units ("PSUs”)

Prior to 2016, we granted PSUs that contained a performance condition, a market condition and a service condition ("Prior PSUs"). After 2015, we granted Internal Metric PSUs ("IM PSUs") and Total Shareholder Return PSUs ("TSR PSUs").

IM PSUs contain a performance condition as well as a service condition. We measure the fair value of these PSUs based on the price of Brink’s stock at the grant date, adjusted for a discount for dividends not received or accrued during the vesting period. For the IM PSUs granted in 2018, the performance period is from January 1, 2018 to December 31, 2020.

TSR PSUs contain a market condition as well as a service condition. We measure the fair value of PSUs containing a market condition at the grant date using a Monte Carlo simulation model. For the TSR PSUs granted in 2018, the performance period is from January 1, 2018 to December 31, 2020.

The following table summarizes all PSU activity during the first three months of 2018:



	Shares (in thousands)		Weighted-Average Grant-Date Fair Value
Nonvested balance as of December 31, 2017	671.2		$	37.26
Granted	169.7		73.48
Forfeited	—		—
Vested^(a)	(137.7	)	29.17
Nonvested balance as of March 31, 2018	703.2		$	47.57


(a)	The vested Prior PSUs presented are based on the target amount of the award. In accordance with the terms of the underlying award agreements, the actual shares earned and distributed for the performance period ended December 31, 2017 were 344.3.

Market Share Units ("MSUs”)

Prior to 2016, we granted MSUs that contained a market condition as well as a service condition. We measured the fair value of MSUs using a Monte Carlo simulation model.

The following table summarizes all MSU activity during the first three months of 2018:



	Shares (in thousands)		Weighted-Average Grant-Date Fair Value
Nonvested balance as of December 31, 2017	74.2		$	30.37
Granted	—		—
Forfeited	—		—
Vested^(a)	(74.2	)	30.37
Nonvested balance as of March 31, 2018	—		$	—

(a)

The vested MSUs presented are based on the target amount of the award. In accordance with the terms of the underlying award agreements, the actual shares earned and distributed for the performance period ended December 31, 2017 were 111.3. No additional compensation expense was required to be recognized for the additional shares distributed, as the market condition was included in the $30.37 grant date fair value.

Deferred Stock Units ("DSUs")

We granted DSUs to our independent directors. We measure the fair value of DSUs at the grant date, based on the price of Brink's stock, adjusted for a discount for dividends not received or accrued during the vesting period.

Since 2015, our independent directors received grants of DSUs that vest and will be paid out in shares of Brink's stock on the

first anniversary of the grant date, provided that the director has not elected to defer the distribution of shares until a later date. DSUs granted prior to 2015, in general, will be paid out in shares of stock following separation from service.

The following table summarizes all DSU activity during the first three months of 2018:



	Shares (in thousands)	Weighted-Average Grant-Date Fair Value
Nonvested balance as of December 31, 2017	10.9	$	60.80
Granted	0.7	74.81
Forfeited	—	—
Vested	—	—
Nonvested balance as of March 31, 2018	11.6	$	61.74