Equity Incentive Plans and Stock-Based Compensation

A summary of shares available for grant under the Company’s plan is as follows:



	Shares Available for Grant
Shares available as of December 31, 2018	10,074,046
Stock options granted	—
Stock options forfeited	33,967
Nonvested equity stock and stock units granted (1) (2)	(5,907,629	)
Nonvested equity stock and stock units forfeited (1)	315,349
Total available for grant as of March 31, 2019	4,515,733

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(1)	For purposes of determining the number of shares available for grant under the 2015 Equity Incentive Plan (the “2015 Plan”) against the maximum number of shares authorized, each share of restricted stock granted reduces the number of shares available for grant by 1.5 shares and each share of restricted stock forfeited increases shares available for grant by 1.5 shares.


(2)	Amount includes approximately 0.9 million shares that have been reserved for potential future issuance related to certain performance unit awards granted in the first quarter of 2019 and discussed under the section titled "Nonvested Equity Stock and Stock Units" below.

General Stock Option Information

The following table summarizes stock option activity under the 2015 Plan for the three months ended March 31, 2019 and information regarding stock options outstanding, exercisable, and vested and expected to vest as of March 31, 2019.



	Options Outstanding
	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
	(In thousands, except per share amounts)
Outstanding as of December 31, 2018	3,235,891		$	10.25
Options granted	—		$	—
Options exercised	(704,851	)	$	6.89
Options forfeited	(33,967	)	$	8.58
Outstanding as of March 31, 2019	2,497,073		$	11.22	4.72	$	2,779
Vested or expected to vest at March 31, 2019	2,473,989		$	11.20	4.69	$	2,779
Options exercisable at March 31, 2019	1,972,769		$	10.82	3.70	$	2,779

Employee Stock Purchase Plan

No purchases were made under the 2015 Employee Stock Purchase Plan ("2015 ESPP") during the three months ended March 31, 2019 and 2018. As of March 31, 2019, approximately 2.3 million shares under the 2015 ESPP remain available for issuance.

Stock-Based Compensation

For the three months ended March 31, 2019 and 2018, the Company maintained stock plans covering a broad range of potential equity grants including stock options, nonvested equity stock and equity stock units and performance based instruments. In addition, the Company sponsors the 2015 ESPP, whereby eligible employees are entitled to purchase common stock semi-annually, by means of limited payroll deductions, at a 15% discount from the fair market value of the common stock as of specific dates.

Stock Options

There were no stock options granted during the three months ended March 31, 2019. During the three months ended March 31, 2019, the Company recorded stock-based compensation expense related to stock options of $0.2 million.

During the three months ended March 31, 2018, the Company granted approximately 0.6 million stock options with an estimated grant-date fair value of $2.3 million. During the three months ended March 31, 2018, the Company recorded stock-based compensation expense related to stock options of $0.6 million.

As of March 31, 2019, there was $3.5 million of total unrecognized compensation cost, net of expected forfeitures, related to non-vested stock-based compensation arrangements granted under the stock option plans. That cost is expected to be recognized over a weighted-average period of 2.6 years.

Employee Stock Purchase Plan

For the three months ended March 31, 2019, the Company recorded compensation expense related to the 2015 ESPP of $0.5 million. For the three months ended March 31, 2018, the Company recorded compensation expense related to the 2015 ESPP of $0.5 million. As of March 31, 2019, there was $0.2 million of total unrecognized compensation cost related to stock-based compensation arrangements granted under the 2015 ESPP. That cost is expected to be recognized over one month.

Valuation Assumptions

The fair value of stock awards is estimated as of the grant date using the Black-Scholes-Merton (“BSM”) option-pricing model assuming a dividend yield of 0% and the additional weighted-average assumptions as listed in the table below.

The following table presents the weighted-average assumptions used to estimate the fair value of stock options granted that contain only service conditions in the periods presented.



	Stock Option Plan
	Three Months Ended
	March 31, 2018
Stock Option Plan
Expected stock price volatility	29		%
Risk free interest rate	2.6		%
Expected term (in years)	5.8
Weighted-average fair value of stock options granted to employees	$	4.24

There were no stock options granted during the three months ended March 31, 2019.

No shares were issued under the 2015 ESPP during the three months ended March 31, 2019 and 2018, respectively.

Nonvested Equity Stock and Stock Units

The Company grants nonvested equity stock units to officers, employees and directors. During the three months ended March 31, 2019, the Company granted nonvested equity stock units totaling approximately 3.4 million shares under the 2015 Plan. During the three months ended March 31, 2018, the Company granted nonvested equity stock units totaling approximately 2.1 million shares under the 2015 Plan. These awards have a service condition, generally a service period of four years, except in the case of grants to directors, for which the service period is 1 year. For the three months ended March 31, 2019, the nonvested equity stock units were valued at the date of grant giving them a fair value of approximately $32.2 million. For the three months ended March 31, 2018, the nonvested equity stock units were valued at the date of grant giving them a fair value of approximately $26.8 million. During the first quarters of 2019 and 2018, the Company granted performance unit awards to certain Company executive officers with vesting subject to the achievement of certain performance conditions. The ultimate number of performance units that can be earned can range from 0% to 200% of target depending on performance relative to target over the applicable period. The shares earned will vest on the third anniversary of the date of grant. The Company's shares available for grant have been reduced to reflect the shares that could be earned at the maximum target.

For the three months ended March 31, 2019, the Company recorded stock-based compensation expense of approximately $6.4 million related to all outstanding nonvested equity stock grants. For the three months ended March 31, 2018, the Company recorded stock-based compensation expense of approximately $6.5 million related to all outstanding nonvested equity stock grants. Unrecognized stock-based compensation related to all nonvested equity stock grants, net of estimated forfeitures, was approximately $53.7 million at March 31, 2019. This amount is expected to be recognized over a weighted average period of 2.9 years.

The following table reflects the activity related to nonvested equity stock and stock units for the three months ended March 31, 2019:



Nonvested Equity Stock and Stock Units	Shares		Weighted- Average Grant-Date Fair Value
Nonvested at December 31, 2018	4,859,135		$	12.71
Granted	3,389,337		$	9.56
Vested	(1,076,198	)	$	12.49
Forfeited	(170,752	)	$	11.89
Nonvested at March 31, 2019	7,001,522		$	11.24