SHARE-BASED AWARDS AND OPTIONS

We have granted nonqualified stock options and restricted stock awards to key employees, officers and directors under a long-term incentive plan, which permits grants of equity to employees, officers, directors and consultants. A total of 14.0 million shares of our common stock was reserved and made available for issuance pursuant to awards granted under the plan. The awards are held in escrow and released upon the grantee's satisfaction of conditions of the award certificate.

The following table summarizes share-based compensation expense and the related income tax benefit recognized for our share-based awards and stock options:



	Year Ended December 31,		Seven Months Ended December 31,		Year Ended May 31,
	2017		2016		2016		2015

	(in thousands)
Share-based compensation expense	$	39,095	$	18,707	$	30,809	$	21,056
Income tax benefit	$	13,849	$	6,582	$	9,879	$	6,907

Restricted Stock

Restricted stock awards vest in equal annual installments over a three- or four-year period and in some cases vest at the end of a three-year service period. Restricted shares cannot be sold or transferred until they have vested. The grant date fair value of restricted stock awards, which is based on the quoted market value of our common stock on the grant date, is recognized as share-based compensation expense on a straight-line basis over the vesting period.

Performance Units

Certain of our executives have been granted performance units under our long-term incentive plan. Performance units are performance-based restricted stock units that, after a performance period, may convert into common shares, which may be restricted. The number of shares is dependent upon the achievement of certain performance measures during the performance period. The target number of performance units and any market-based performance measures ("at threshold," "target," and "maximum") are set by the compensation committee of our board of directors. Performance units are converted only after the compensation committee certifies performance based on pre-established goals.

The compensation committee may set a range of possible performance-based outcomes for performance units. For awards with only performance conditions, we recognize compensation expense on a straight-line basis over the performance period using the grant date fair value of the award, which is based on the number of shares expected to be earned according to the level of achievement of performance goals. If the number of shares expected to be earned were to change at any time during the performance period, we would make a cumulative adjustment to share-based compensation expense based on the revised number of shares expected to be earned. The performance period for awards granted range from 28 months to three years.

Leveraged Performance Units

During the year ended May 31, 2015, certain executives were granted performance units that we refer to as "leveraged performance units," or "LPUs." LPUs contain a market condition based on our relative stock price growth over a three-year performance period. The LPUs contain a minimum threshold performance which, if not met, would result in no payout. The LPUs also contain a maximum award opportunity set as a fixed dollar and fixed number of shares. After the three-year performance period, which concluded in October 2017, one-third of the earned units converted to unrestricted common stock. The remaining two-thirds converted to restricted stock that will vest in equal installments on each of the first two anniversaries of the conversion date. We recognize share-based compensation expense based on the grant date fair value of the LPUs, as determined by use of a Monte Carlo model, on a straight-line basis over the requisite service period for each separately vesting portion of the LPU award.

The following table summarizes the changes in unvested restricted stock and performance awards for the year ended December 31, 2017, the 2016 fiscal transition period and for the years ended May 31, 2016 and 2015:



	Shares		Weighted-Average Grant-Date Fair Value
	(in thousands)
Unvested at May 31, 2014	1,754		$	22.72
Granted	954		36.21
Vested	(648	)	23.17
Forfeited	(212	)	27.03
Unvested at May 31, 2015	1,848		28.97
Granted	461		57.04
Vested	(633	)	27.55
Forfeited	(70	)	34.69
Unvested at May 31, 2016	1,606		37.25
Granted	348		74.26
Vested	(639	)	31.38
Forfeited	(52	)	45.27
Unvested at December 31, 2016	1,263		49.55
Granted	899		79.79
Vested	(858	)	39.26
Forfeited	(78	)	59.56
Unvested at December 31, 2017	1,226		$	78.29

The total fair value of restricted stock and performance awards vested was $33.7 million for the year ended December 31, 2017, $20.0 million for the 2016 fiscal transition period and $17.4 million and $15.0 million, respectively, for the years ended May 31, 2016 and 2015.

For restricted stock and performance awards, we recognized compensation expense of $35.2 million for the year ended December 31, 2017, $17.2 million for the 2016 fiscal transition period and $28.8 million and $19.8 million, respectively, for the years ended May 31, 2016 and 2015. As of December 31, 2017, there was $46.1 million of unrecognized compensation expense related to unvested restricted stock and performance awards that we expect to recognize over a weighted-average period of 1.8 years. Our restricted stock and performance award plans provide for accelerated vesting under certain conditions.

Stock Options

Stock options are granted with an exercise price equal to 100% of fair market value of our common stock on the date of grant and have a term of ten years. Stock options granted before the year ended May 31, 2015 vest in equal installments on each of the first four anniversaries of the grant date. Stock options granted during the year ended May 31, 2015 and thereafter vest in equal installments on each of the first three anniversaries of the grant date. Our stock option plans provide for accelerated vesting under certain conditions.

The following summarizes changes in stock option activity for the year ended December 31, 2017, the 2016 fiscal transition period and the years ended May 31, 2016 and 2015:



	Options		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term	Aggregate Intrinsic Value
	(in thousands)				(years)	(in millions)
Outstanding at May 31, 2014	1,532		$	20.36	3.8	$	21.3
Granted	306		35.78
Forfeited	(48	)	27.42
Exercised	(896	)	20.15			16.6
Outstanding at May 31, 2015	894		25.47		5.2	23.9
Granted	145		55.92
Forfeited	(8	)	16.10
Exercised	(220	)	22.46			9.4
Outstanding at May 31, 2016	811		31.81		5.8	36.8
Granted	73		74.66
Forfeited	(1	)	22.93
Exercised	(124	)	22.26			6.5
Outstanding at December 31, 2016	759		37.51		6.0	24.5
Granted	124		79.45
Forfeited	—		—
Exercised	(160	)	23.50			10.1
Outstanding at December 31, 2017	723		$	47.79	6.4	$	37.9

Options vested and exercisable at December 31, 2017	502		$	36.60	5.4	$	31.9

We recognized compensation expense for stock options of $2.6 million during the year ended December 31, 2017 and $1.1 million, $1.4 million and $0.7 million during the 2016 fiscal transition period and the fiscal years ended May 31, 2016 and 2015, respectively. As of December 31, 2017, we had $3.4 million of unrecognized compensation expense related to unvested stock options that we expect to recognize over a weighted-average period of 1.8 years.

The weighted-average grant-date fair value of stock options granted during the year ended December 31, 2017, the 2016 fiscal transition period and during the years ended May 31, 2016 and 2015 was $23.68, $21.87, $15.60 and $8.45, respectively. Fair value was estimated on the date of grant using the Black-Scholes valuation model with the following weighted-average assumptions:



	Year Ended December 31,		Seven Months Ended December 31,		Year Ended May 31,
	2017		2016		2016		2015
Risk-free interest rate	1.99	%	1.05	%	1.62	%	1.57	%
Expected volatility	30.00	%	31.58	%	28.65	%	23.65	%
Dividend yield	0.06	%	0.06	%	0.10	%	0.13	%
Expected term (years)	5		5		5		5

The risk-free interest rate is based on the yield of a zero coupon U.S. Treasury security with a maturity equal to the expected life of the option from the date of the grant. Our assumption on expected volatility is based on our historical volatility. The dividend yield assumption is calculated using our average stock price over the preceding year and the annualized amount of our most current quarterly dividend per share. We based our assumptions on the expected term of the options on our analysis of the historical exercise patterns of the options and our assumption on the future exercise pattern of options.