In May 2005 our shareholders approved the 2005 Stock Incentive Plan authorizing the issuance in aggregate of 1,000,000 incentive stock options, non-incentive stock options, restricted shares and stock appreciation rights for our common stock. In April 2009, the stockholders approved an amendment to the 2005 Stock Incentive Plan increasing the available number of awards from 1,000,000 to 1,500,000. In April 2013, the stockholders further amended and restated the 2005 Stock Incentive Plan increasing the available number of awards from 1,500,000 to 2,000,000 in the Second Amended and Restated 2005 Stock Incentive Plan. The stock split that occurred on January 20, 2017 doubled the number of awards from 2,000,000 to 4,000,000. As of December 31, 2018, 3,192,376 of such awards were issued leaving 807,624 awards available to be issued in subsequent periods.

Stock-based compensation granted under our Company’s stock plans is expensed in tranches over the vesting period. Non-performance based grants generally vest equally over a three or four year period. Our Company’s performance based share grants generally consist of three types of awards. The performance units issued in 2018, 2017 and 2016 will cliff vest on the third anniversary of the date of the grant in an amount as determined by the rate of cumulative annual growth in tangible book value for the three years immediately prior to the vesting date, with actual shares that vest ranging between 150% to 50% of that portion of the original award.

During 2018, 2017 and 2016, the total compensation cost for share-based payment arrangements recognized in the income statement was $6.8 million, $13.8 million and $17.6 million, and the recorded tax benefits related to share-based awards were $1.4 million, $2.9 million and $6.2 million, respectively.

As of December 31, 2018 and 2017, the total unrecognized compensation expense related to nonvested stock awards was $11.8 million and $18.0 million, respectively, which is expected to be recognized as expense over weighted average periods of 1.8 years and 1.9 years, respectively. The aggregate fair value of all unvested restricted stock units as of December 31, 2018 and 2017 was $44.6 million and $49.9 million, respectively.

The activity related to our Company’s restricted stock unit awards was as follows:

	Year Ended December 31, 2018
	Number of Awards			Weighted Average Grant Date Fair Value ⁽¹⁾
Nonvested at the beginning of the year		159,539		$	41.60
Granted		24,593			50.01
Vested ⁽²⁾		(90,543	)		36.66
Forfeited		(7,000	)		38.00
Nonvested at the end of the year		86,589		$	49.45

(1)	Fair value is based on the closing price of our common shares on the NASDAQ on the grant date.

(2)	This amount represents the gross number of shares vested before any share forfeiture to pay required tax withholdings. For the year ended December 31, 2018 share awards of 34,430 were withheld for tax payments at a weighted average vest date fair value of $58.44.

During 2018, 2017 and 2016, we granted 24,593, 35,297 and 84,000 restricted stock units, respectively, with weighted average grant-date fair values per share of $50.01, $56.05 and $44.52, respectively.

During 2018, 2017 and 2016, the total fair value of restricted stock units vested was $5.3 million, $3.3 million and $2.5 million, respectively.

The activity related to our Company’s performance-based equity awards was as follows:

	Year Ended December 31, 2018
	Number of Awards			Weighted Average Grant Date Fair Value ⁽¹⁾
Nonvested at the beginning of the year		966,361		$	43.39
Granted		247,554			54.15
Performance Adjustment		(59,833	)		37.25
Vested ⁽²⁾		(274,299	)		37.25
Forfeited		(34,250	)		46.00
Nonvested at the end of the year		845,533		$	48.86

During 2018, 2017 and 2016, we granted 247,554, 253,333 and 404,946 performance-based equity awards, respectively, with weighted average grant-date fair values per share of $54.15, $55.70 and $40.77, respectively.

During 2018, 2017 and 2016, the total fair value of performance-based equity awards vested was $15.3 million, $29.0 million and $11.5 million, respectively.

Awards that remain outstanding at the time of the Merger will be treated as follows in accordance with the Merger Agreement:

Each performance unit award granted prior to January 1, 2017, and each tranche of a restricted stock unit award that vests prior to January 1, 2020, that was granted prior to January 1, 2019, and that is payable in shares (together, the “2019 Vesting Company Awards”) will be converted into the right to receive an amount in cash equal to the product of (x) the Merger Consideration multiplied by (y) the number of restricted stock units in the applicable tranche or, in the case of performance unit awards, the target number of shares, in each case subject to the 2019 Vesting Company Award immediately prior to the Merger.

Each performance unit award granted on or after January 1, 2017 and prior to January 1, 2019, and each tranche of a restricted stock unit award that vests on or after January 1, 2020, that was granted prior to January 1, 2019, and that is payable in shares (together, the “2020 Vesting Company Awards”) will be canceled and converted into the right to receive a cash payment equal to the product of (x) the Merger Consideration multiplied by (y) the number of restricted stock units in the applicable tranche or, in the case of performance units, the target number of shares, in each case subject to the 2020 Vesting Company Award immediately prior to the Merger; provided that the right to a cash payment with respect to a 2020 Vesting Company Award shall be subject to the same vesting and payment schedules as the 2020 Vesting Company Award it replaces (other than performance-based vesting conditions).

We offer an Employee Stock Purchase Plan (the “ESPP”) to all of our eligible employees. Employees are offered the opportunity to purchase our Company’s Common stock at 90% of fair market value at the lower of the price at the beginning or the end of each six month offering period. Each employee can invest up to 10% of their base compensation subject to the lesser of 1,000 common stock shares or total market value of $25,000. There were 45,008 shares purchased in 2018 from funds withheld during the July 1, 2017 to December 31, 2017 and January 1, 2018 to June 30, 2018 offering periods. There were 40,488 shares purchased in 2017 in the aggregate from funds withheld during the offering periods of July 1, 2016 to December 31, 2016 and January 1, 2017 to June 30, 2017. We expense both the value of the 10% discount and the “look-back” option, which provides for the more favorable price at either the beginning or end of the offering period.

In accordance with the Merger Agreement, the Company’s ESPP will be terminated at the time of the Merger. There will be no more offering periods under the Company’s ESPP after December 31, 2018.