9. Stock-based Compensation

As of June 30, 2018, there were 4,075,328 shares, 2,378,832 shares and 680,810 shares available for grant under The Hanover Insurance Group 2014 Long-Term Incentive Plan, The Hanover Insurance Group 2014 Employee Stock Purchase Plan and the Chaucer Share Incentive Plan, respectively.

Compensation cost for the Company’s stock-based awards and the related tax benefits were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2018			2017			2018			2017
Stock-based compensation expense	$	4.6		$	4.1		$	7.6		$	7.3
Tax benefit		(1.0	)		(1.4	)		(1.6	)		(2.5	)
Stock-based compensation expense, net of taxes	$	3.6		$	2.7		$	6.0		$	4.8

Stock Options

Information on the Company’s stock option activity for the six months ended June 30, 2018 and 2017 is summarized below.

	Six Months Ended June 30,
	2018					2017
(in whole shares and dollars)	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Outstanding, beginning of period		1,062,177		$	75.53		1,396,152		$	68.63
Granted		294,603			110.68		460,610			90.85
Exercised		(149,043	)		71.74		(180,940	)		59.50
Forfeited or cancelled		(50,491	)		88.48		(16,567	)		80.40
Outstanding, end of period		1,157,246			84.40		1,659,255			75.68

Restricted Stock Units

The following tables summarize activity information about employee restricted stock units:

	Six Months Ended June 30,
	2018					2017
(in whole shares and dollars)	Shares			Weighted Average Grant Date Fair Value		Shares			Weighted Average Grant Date Fair Value
Time-based restricted stock units:
Outstanding, beginning of period		298,528		$	83.45		269,063		$	73.91
Granted		143,565			111.21		128,235			90.51
Vested		(71,556	)		72.56		(70,590	)		59.29
Forfeited		(16,890	)		89.89		(13,830	)		84.30
Outstanding, end of period		353,647			96.61		312,878			83.55
Performance-based and market-based restricted stock units:
Outstanding, beginning of period		102,586		$	81.21		115,057		$	78.82
Granted		34,280			117.65		60,101			79.48
Vested		(14,032	)		70.24		(17,642	)		58.16
Forfeited		(7,625	)		81.91		(2,180	)		95.36
Outstanding, end of period		115,209			93.34		155,336			81.19

In the first six months of 2018 and 2017, the Company granted market-based awards totaling 30,905 and 56,571, respectively, to certain members of senior management, which are included in the table above as performance and market-based restricted stock activity. The vesting of these stock units is based on the relative total shareholder return (“TSR”) of the Company. This metric is generally based on relative TSR for a three-year period as compared to a pre-selected group of property and casualty companies. The fair value of market-based awards was estimated at the date of grant using a valuation model. These units have the potential to range from 0% to 150% of the shares disclosed. Included in the amount granted above in 2018 and 2017 are 3,115 shares and 5,881 shares, respectively, related to market-based awards that achieved a payout in excess of 100%. These awards vested in the first six months of 2018 and 2017, respectively.

Performance-based restricted stock units are based upon the achievement of the performance metric at 100%. These units have the potential to range from 0% to 200% of the shares disclosed, which varies based on grant year and individual participation level. Increases above the 100% target level are reflected as granted in the period in which performance-based stock unit goals are achieved. Decreases below the 100% target level are reflected as forfeited. There were no awards vested in 2018 and 2017 at a level greater than 100%.