tock-Based Compensation

The Company recorded stock-based compensation in general and administrative expenses in the accompanying Consolidated Statements of Operations, the components of which are further described below:



	Year ended December 31,
(in thousands)	2015			2014		2013
Restricted stock ⁽¹⁾	$	13,869		12,161		14,141
Directors' fees paid in common stock ⁽¹⁾	200			208		238
Capitalized stock-based compensation ⁽²⁾	(2,988		)	(2,707	)	(2,188	)
Stock-based compensation, net of capitalization	$	11,081		9,662		12,191

⁽¹⁾Includes amortization of the grant date fair value of restricted stock awards over the respective vesting periods.

⁽²⁾ Includes compensation expense specifically identifiable to development and leasing activities.

The Company established its stock-based compensation plan (the "Plan") under which the Board of Directors may grant stock options and other stock-based awards to officers, directors, and other key employees. The Plan allows the Company to issue up to 4.1 million shares in the form of the Parent Company's common stock or stock options. As of December 31, 2015, there were 2.5 million shares available for grant under the Plan either through stock options or restricted stock.

Stock Option Awards

Stock options are granted under the Plan with an exercise price equal to the Parent Company's stock's price at the date of grant. All stock options granted have ten-year lives, contain vesting terms of one to five years from the date of grant and some have dividend equivalent rights. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton closed-form (“Black-Scholes”) option valuation model. The Company believes that the use of the Black-Scholes model meets the fair value measurement objectives of FASB ASC Topic 718 and reflects all substantive characteristics of the instruments being valued. There were no stock options granted during the years ended December 31, 2015, 2014 or 2013. There were no stock options exercised, forfeited or expired during the year ended December 31, 2015.

The following table summarizes stock options outstanding:



	Year ended December 31, 2015
	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2014	8,741	$	88.45	2.1	$	(216	)
Outstanding of of December 31, 2015	8,741	$	88.45	1.1	$	(178	)
Vested and expected to vest as of December 31, 2015	8,741	$	88.45	1.1	$	(178	)
Exercisable as of December 31, 2015 ⁽¹⁾	8,741	$	88.45	1.1	$	(178	)

⁽¹⁾The Company issues new shares to fulfill option exercises from its authorized shares available. The total intrinsic value of options exercised during the years ended December 31, 2014, and 2013 was approximately $1.3 million, and $141,000, respectively.

Restricted Stock Awards

The Company grants restricted stock under the Plan to its employees as a form of long-term compensation and retention. The terms of each restricted stock grant vary depending upon the participant's responsibilities and position within the Company. The Company's stock grants can be categorized as either time-based awards, performance-based awards, or market-based awards. All awards are valued at fair value, earn dividends throughout the vesting period, and have no voting rights. Fair value is measured using the grant date market price for all time-based or performance-based awards. Market based awards are valued using a Monte Carlo simulation to estimate the fair value based on the probability of satisfying the market conditions and the projected stock price at the time of payout, discounted to the valuation date over a three year performance period. Assumptions include historic volatility over the previous three year period, risk-free interest rates, and Regency's historic daily return as compared to the market index. Since the award payout includes dividend equivalents and the total shareholder return includes the value of dividends, no dividend yield assumption is required for the valuation. Compensation expense is measured at the grant date and recognized on a straight-line basis over the requisite vesting period for the entire award.

The following table summarizes non-vested restricted stock activity:



	Year ended December 31, 2015
	Number of Shares	Intrinsic Value (in thousands)	Weighted Average Grant Price
Non-vested as of December 31, 2014	676,366
Add: Time-based awards granted^{(1) (4)}	119,714		$67.82
Add: Performance-based awards granted ^{(2) (4)}	8,760		$68.49
Add: Market-based awards granted ^{(3) (4)}	80,595		$72.89
Less: Vested and Distributed ⁽⁵⁾	268,747		$69.17
Less: Forfeited	1,268		$59.71
Non-vested as of December 31, 2015 ⁽⁶⁾	615,420	$41,922

⁽¹⁾Time-based awards vest beginning on the first anniversary following the grant date over a three or four year service period. These grants are subject only to continued employment and are not dependent on future performance measures. Accordingly, if such vesting criteria are not met, compensation cost previously recognized would be reversed.

⁽²⁾ Performance-based awards are earned subject to future performance measurements. Once the performance criteria are achieved and the actual number of shares earned is determined, shares vest over a required service period. The Company considers the likelihood of meeting the performance criteria based upon management's estimates from which it determines the amounts recognized as expense on a periodic basis.

⁽³⁾Market-based awards are earned dependent upon the Company's total shareholder return in relation to the shareholder return of a NAREIT index over a three-year period. Once the performance criteria are met and the actual number of shares earned is determined, the shares are immediately vested and distributed. The probability of meeting the criteria is considered when calculating the estimated fair value on the date of grant using a Monte Carlo simulation. These awards are accounted for as awards with market criteria, with compensation cost recognized over the service period, regardless of whether the performance criteria are achieved and the awards are ultimately earned. The significant assumptions underlying determination of fair values for market-based awards granted were as follows:

⁽⁴⁾The weighted-average grant price for restricted stock granted during the years ended December 31, 2015, 2014, and 2013 was $69.80, $48.18, and $52.80, respectively.

⁽⁵⁾The total intrinsic value of restricted stock vested during the years ended December 31, 2015, 2014, and 2013 was $18.6 million, $12.4 million, and $11.5 million, respectively.

⁽⁶⁾ As of December 31, 2015, there was $12.0 million of unrecognized compensation cost related to non-vested restricted stock granted under the Parent Company's Long-Term Omnibus Plan. When recognized, this compensation results in additional paid in capital in the accompanying Consolidated Statements of Equity of the Parent Company and in general partner preferred and common units in the accompanying Consolidated Statements of Capital of the Operating Partnership. This unrecognized compensation cost is expected to be recognized over the next three years. The Company issues new restricted stock from its authorized shares available at the date of grant.

Year ended December 31,

Volatility

Risk free interest rate