NOTE 7. LONG-TERM COMPENSATION

Prologis Outperformance Plan (“POP”)

Participation points represent a portion of a compensation pool that can be earned if and when certain performance criteria are met under the POP for the applicable performance period. We granted participation points for the 2017 – 2019 performance period in January 2017, with a fair value of $20.4 million using a Monte Carlo valuation model that assumed a risk-free interest rate of 1.49% and an expected volatility of 22.2%.

The POP performance criteria were met for the 2014 – 2016 performance period, which resulted in awards for this performance period being earned. An aggregate performance pool of $62.2 million was awarded in January 2017 in the form of common stock or vested POP LTIP Units.

Prologis Promote Plan (“PPP”)

The following table details the equity awards granted under the PPP for the nine months ended September 30 (in thousands):

	2017		2016
RSUs granted		88		53
Grant date fair value of RSUs granted	$	4,800	$	2,300
LTIP Units granted		203		114
Grant date fair value of LTIP Units granted	$	11,100	$	4,900

Prologis Outperformance Plan Operating Partnership Long-Term Incentive Plan Units (“POP LTIP Units”)

The following table summarizes the activity for the unvested POP LTIP Units for the nine months ended September 30, 2017 (units in thousands):

	Number of Unvested
	POP LTIP Units
Balance at January 1, 2017		3,490
Granted		38
Vested POP LTIP Units (1)		(698	)
Forfeited		(576	)
Balance at September 30, 2017		2,254

(1)

Vested units were based on the POP performance criteria being met for the 2014 – 2016 performance period and represented the earned award amount. Vested units are included in LTIP Units in the table below. Any excess outstanding unvested POP LTIP Units for the 2014 – 2016 performance period were forfeited to the extent not earned.

Operating Partnership Long-Term Incentive Plan Units (“LTIP Units”)

The following table summarizes the activity for LTIP Units for the nine months ended September 30, 2017 (units in thousands):

	Number of			Weighted Average		Number of
	LTIP Units			Grant-Date Fair Value		LTIP Units Vested
Balance at January 1, 2017		2,219		$	40.81		743
Granted		1,032
Vested POP LTIP Units		698
Conversion to common limited partnership units		(234	)
Balance at September 30, 2017		3,715		$	45.54		1,868

Restricted Stock Units (“RSUs”)

The following table summarizes the activity for RSUs for the nine months ended September 30, 2017 (units in thousands):

	Number of			Weighted Average		Number of
	RSUs			Grant-Date Fair Value		RSUs Vested
Balance at January 1, 2017		1,617		$	40.58		125
Granted		757
Vested and distributed		(802	)
Forfeited		(63	)
Balance at September 30, 2017		1,509		$	45.35		106

Stock Options

We have 0.8 million stock options outstanding and exercisable at September 30, 2017, with a weighted average exercise price of $30.81. The aggregate intrinsic value of exercised options was $24.4 million and $43.9 million for the nine months ended September 30, 2017, and 2016, respectively. No stock options were granted in 2017 or 2016.