12. STOCK-BASED COMPENSATION

WESCO sponsors four stock-based compensation plans. The 1999 Long-Term Incentive Plan, as amended and restated (“LTIP”), was designed to be the successor plan to all prior plans. Any shares remaining reserved for future issuance under the prior plans are available for issuance under the LTIP. The LTIP and predecessor plans are administered by the Compensation Committee of the Board of Directors.

On May 31, 2017, the Company renewed and restated the LTIP, increasing the maximum number of shares of common stock that may be issued under the plan by 1.7 million shares to 3.4 million. Under the LTIP, the total number of shares of common stock authorized to be issued will be reduced by 1 share of common stock for every 1 share that is subject to a stock appreciation right granted, and 1.83 shares of common stock for every 1 share that is subject to an award other than a stock appreciation right granted on or after May 31, 2017. As of December 31, 2017, 3.6 million shares of common stock were reserved under the LTIP for future equity award grants.

Except for the performance-based award, awards granted vest and become exercisable once criteria based on time is achieved. Performance-based awards vest based on market or performance conditions. All awards vest immediately in the event of a change in control. Each award terminates on the tenth anniversary of its grant date unless terminated sooner under certain conditions.

WESCO recognized $14.8 million, $12.5 million and $12.9 million of non-cash stock-based compensation expense, which is included in selling, general and administrative expenses, for the years ended December 31, 2017, 2016 and 2015, respectively. As of December 31, 2017, there was $18.7 million of total unrecognized compensation expense related to non-vested stock-based compensation arrangements for all awards previously made of which approximately $11.3 million is expected to be recognized in 2018, $6.6 million in 2019 and $0.8 million in 2020.

The total intrinsic value of awards exercised during the years ended December 31, 2017, 2016, and 2015 was $17.2 million, $13.0 million, and $15.8 million, respectively. The gross deferred tax benefit associated with the exercise of stock-based awards totaled $6.4 million, $4.9 million, and $5.7 million in 2017, 2016, and 2015, respectively.

The following table sets forth a summary of stock-settled stock appreciation rights and related information for the years indicated:



	2017							2016				2015
	Awards		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life	Aggregate Intrinsic Value (In thousands)		Awards		Weighted-Average Exercise Price		Awards		Weighted-Average Exercise Price
Beginning of year	2,439,487		$	52.62				2,567,021		$	54.47	2,480,745		$	50.91
Granted	455,807		71.21					709,999		42.63		394,182		69.54
Exercised	(495,181	)	42.19					(526,818	)	41.54		(232,542	)	35.80
Canceled	(161,506	)	66.06					(310,715	)	63.71		(75,364	)	73.59
End of year	2,238,607		57.75		6.2	$	28,791	2,439,487		52.62		2,567,021		54.47
Exercisable at end of year	1,331,580		$	56.96	4.6	$	18,801	1,549,350		$	53.35	2,034,263		$	49.36

WESCO granted the following stock-settled stock appreciation rights at the following weighted-average assumptions:



	2017	2016	2015
Stock-settled stock appreciation rights granted	455,807	709,999	394,182
Risk free interest rate	1.9%	1.2%	1.6%
Expected life (in years)	5	5	5
Expected volatility	29%	32%	32%

The weighted-average fair value per stock-settled stock appreciation right granted was $20.52, $12.88 and $21.68 for the years ended December 31, 2017, 2016 and 2015, respectively.

The following table sets forth a summary of time-based restricted stock units and related information for the years ended December 31, 2017, 2016 and 2015:



	2017				2016				2015
	Awards		Weighted-Average Fair Value		Awards		Weighted-Average Fair Value		Awards		Weighted-Average Fair Value
Unvested at beginning of year	257,096		$	57.47	175,411		$	74.52	185,457		$	73.87
Granted	100,993		71.33		162,256		44.45		81,022		69.05
Vested	(44,720	)	84.57		(60,015	)	72.41		(76,387	)	66.89
Forfeited	(23,315	)	57.52		(20,556	)	59.15		(14,681	)	75.73
Unvested at end of year	290,054		$	58.11	257,096		$	57.47	175,411		$	74.52

The weighted-average fair value per restricted stock unit granted was $71.33, $44.45 and $69.05 for the years ended December 31, 2017, 2016 and 2015, respectively.

The following table sets forth a summary of performance-based awards for the year ended December 31, 2017:



	2017				2016				2015
	Awards		Weighted-Average Fair Value		Awards		Weighted-Average Fair Value		Awards		Weighted-Average Fair Value
Unvested at beginning of year	149,320		$	60.36	114,520		$	76.48	130,004		$	80.21
Granted	39,978		76.63		91,768		47.00		59,661		67.81
Vested	—		—		—		—		(38,869	)	72.25
Forfeited	(40,790	)	76.77		(56,968	)	71.25		(36,276	)	80.14
Unvested at end of year	148,508		$	60.23	149,320		$	60.36	114,520		$	76.48

The weighted-average fair value per performance-based award granted was $76.63, $47.00 and $67.81 for the years ended December 31, 2017, 2016 and 2015, respectively.

The fair value of the performance shares based on total stockholder return granted during the year ended December 31, 2017, 2016 and 2015 were estimated using the following weighted-average assumptions:



	Year ended December 31,
	2017			2016			2015
Grant date share price	$	71.65		$	42.44		$	69.54
WESCO expected volatility	29		%	26		%	27		%
Peer group median volatility	24		%	24		%	23		%
Risk-free interest rate	1.5		%	0.9		%	1.1		%
Correlation	114		%	122		%	96		%

The unvested performance-based awards in the table above include 74,254 shares in which vesting of the ultimate number of shares is dependent upon WESCO's total stockholder return in relation to the total stockholder return of a select group of peer companies over a three-year period. The fair value of these awards is determined using a Monte Carlo simulation model. These awards are accounted for as awards with market conditions; compensation cost is recognized over the service period, regardless of whether the market conditions are achieved and the awards ultimately vest.

Vesting of the remaining 74,254 shares of performance-based awards in the table above is dependent upon the three-year average growth rate of WESCO's net income. The fair value of these awards is based upon the grant-date closing price of WESCO's common stock. These awards are accounted for as awards with performance conditions; compensation cost is recognized over the performance period based upon WESCO's determination of whether it is probable that the performance targets will be achieved.