The Company has outstanding equity awards under the Primerica, Inc. Second Amended and Restated 2010 Omnibus Incentive Plan (“OIP”). The OIP provides for the issuance of equity awards, including stock options, stock appreciation rights, restricted stock, deferred stock, RSUs, PSUs, and stock payment awards, as well as cash-based awards. In addition to time-based vesting requirements, awards granted under the OIP also may be subject to specified performance criteria. Since 2010, the Company has issued equity awards to our management (officers and other key employees), non-employees who serve on our Board of Directors (“directors”), and sales force leaders under the OIP. As of December 31, 2018, we had 1.7 million shares available for future grants under this plan.

Employee and Director Share-Based Compensation. As of December 31, 2018, the Company had outstanding RSUs, PSUs, and stock options issued to our management (officers and other key employees), as well as RSUs issued to our directors, under the OIP.

All of our outstanding employee and director RSU awards are eligible for dividend equivalents regardless of vesting status.

We recognized expense and tax benefit offsets as follows for employee and director RSU share-based compensation:

The following table summarizes employee and director RSU activity during the years ended December 31, 2018, 2017, and 2016.

	Shares					Weighted-average measurement-date fair value per share
	(Shares in thousands)
Unvested employee and director RSUs, December 31, 2015		390				$	45.07
Granted		225					42.86
Forfeited		-					-
Vested		(219	)				42.28
Unvested employee and director RSUs, December 31, 2016		396					45.37
Granted		130					80.33
Forfeited		(1	)				57.53
Vested		(213	)				46.54
Unvested employee and director RSUs, December 31, 2017		312					59.10
Granted		106					100.00
Forfeited		-		⁽¹	⁾		82.20
Vested		(186	)				58.51
Unvested employee and director RSUs, December 31, 2018		232					78.22

As of December 31, 2018, total compensation cost not yet recognized in our financial statements related to employee and director RSU awards with time-based vesting conditions yet to be reached was $3.3 million, and the weighted-average period over which cost will be recognized was 0.8 year.

In 2016, the Company began issuing PSUs to certain of its executive officers under the OIP as part of their annual equity compensation. PSU awards include a performance target of a specified average annual Return on Adjusted Equity (“ROAE”) for the Company over a three-year performance period, as well as a threshold ROAE and an ROAE at which the maximum number of shares can be earned. Awards cliff vest two months after the performance period ends. Depending on the ROAE achieved within the specified range, recipients may receive shares of common stock equal to between 0% and 150% of the number of PSUs granted. In addition, PSUs accrue forfeitable dividend equivalents, which are also paid out based on the number of shares earned.

PSU awards provide for vesting upon the voluntary termination of employment by any employee who is “retirement eligible” as of his or her termination date. The number of shares that will be earned for a retirement-eligible employee is equal to the amount calculated using the Company’s actual average annual three-year ROAE ending on the last day of the performance period, even if that employee retires prior to the completion of the performance period.

In connection with our granting of PSU awards, we recognized expense and tax benefit offsets as follows:

The following table summarizes PSU activity during the years ended December 31, 2018 and 2017.

	Shares		Weighted-average measurement-date fair value per share
	(Shares in thousands)
Unvested employee PSUs, December 31, 2016 ⁽¹⁾		18	$	41.88
Granted ⁽²⁾		36		80.45
Forfeited		-		-
Vested		-		-
Unvested employee PSUs, December 31, 2017		54		67.42
Granted ⁽³⁾		31		100.55
Forfeited		-		-
Vested		-		-
Unvested employee PSUs, December 31, 2018		85		79.34

As of December 31, 2018 total unrecognized compensation related to PSU awards was $0.6 million, and the weighted-average period over which cost will be recognized was 0.9 year.

Stock Options. From 2013 to 2016, the Company issued stock options to certain of its executive officers under the OIP as part of their annual equity compensation. Stock options were granted with an exercise price equal to the fair market value of our common stock on the grant date, and they expire 10 years from the date of grant. These options have time-based restrictions with equal and annual graded vesting over a three-year period. Stock options issued in 2014 through 2016 provide for such awards to vest upon the voluntary termination of employment by any employee who is “retirement eligible” as of his or her termination date. Upon retirement, employees have the lesser of three years or the remaining option term to exercise any vested options. We did not issue any stock options in 2018 or 2017.

Compensation expense and related tax benefits recognized for stock option awards were as follows:

The following table summarizes activity related to stock options outstanding and exercisable during the years ended December 31, 2018, 2017, and 2016:

	Outstanding					Exercisable
	Number of shares			Weighted average exercise price		Number of shares		Weighted average exercise price
	(Shares in thousands)
Outstanding at December 31, 2015		203		$	41.28		35	$	36.38
Granted		90			41.88
Exercised		(148	)		38.24
Outstanding at December 31, 2016		145			44.75		6		53.50
Granted		-			-
Exercised		(38	)		43.63
Outstanding at December 31, 2017		107			45.15		32		47.26
Granted		-			-
Exercised		(33	)		47.59
Outstanding at December 31, 2018		74			44.07		44		45.55

Range of granted option exercise prices outstanding at December 31, 2018

$41.20 (average term remaining - 5.1 years)		7		$	41.20		7	$	41.20
$53.50 (average term remaining - 6.2 years)		14			53.50		14		53.50
$41.88 (average term remaining - 7.1 years)		52			41.88		22		41.88

The aggregate intrinsic value represents the difference between the exercise price of our stock options and the quoted closing price of our common stock as of December 31, 2018. A summary of the intrinsic values of our stock options is as follows:

The intrinsic value, tax benefit realized and value of shares withheld related to option exercise activity are summarized as follows:

	Year ended December 31,
	2018		2017		2016
	(In thousands)
Intrinsic value of options exercised	$	1,953	$	1,453	$	2,755
Tax benefit realized from the options exercised		-		509		964
Value of issued shares withheld to satisfy option exercise price		1,562		1,673		5,509

As of December 31, 2018, there was $6 thousand of total unrecognized compensation cost related to unvested options, and the weighted-average period over which cost will be recognized was 0.1 year.

Non-Employee Share-Based Compensation. Non-employee share-based transactions relate to the granting of RSUs to members of the sales force (“agent equity awards”). Agent equity awards are generally granted as a part of quarterly contests for successful life insurance policy acquisitions and for sales of investment and savings products for which the grant and the service period occur within the same calendar quarter.

The following table summarizes non-employee RSU activity during the years ended December 31, 2018, 2017, and 2016.

	Shares			Weighted-average measurement-date fair value per share
	(Shares in thousands)
Unvested non-employee RSUs, December 31, 2015		73		$	42.83
Granted		236			48.45
Vested		(267	)		44.82
Unvested non-employee RSUs, December 31, 2016		42			61.55
Granted		156			75.69
Vested		(166	)		68.96
Unvested non-employee RSUs, December 31, 2017		32			91.88
Granted		124			102.43
Vested		(122	)		101.01
Unvested non-employee RSUs, December 31, 2018		34			97.71

Agent equity awards vest and are measured using the fair market value at the conclusion of the quarterly contest, which is the time that performance is complete. Equity awards granted to the sales force prior to 2018 contained sales restrictions that expired over three years. Because of such sales restrictions, the fair market value of the awards incorporated an illiquidity discount reflecting the risk associated with the post-vesting restrictions. To quantify this discount for each award, we used a series of put option models with one-, two- and three-year tenors to estimate a hypothetical cost of eliminating the downside risk associated with the sale restrictions. Starting in 2018, equity awards granted under quarterly contests no longer contain sales restrictions, thereby eliminating the need to incorporate an illiquidity discount. These awards are measured using the fair value at the conclusion of the quarterly contest. Awards granted before January 2018 maintain the post-vesting sales restrictions established at the time of grant.

The most significant assumptions in estimating the illiquidity discount for awards granted prior to 2018 in the put option models are the volatility assumptions. We derive volatility assumptions primarily from the historical volatility of our common stock using terms comparable to the sale restriction terms.

The following table presents the assumptions used in valuing quarterly RSU granted to agents prior to 2018:

To the extent that these awards are an incremental direct cost of successful acquisitions of life insurance policies that result directly from and are essential to the policy acquisition(s) and would not have been incurred had the policy acquisition(s) not occurred, we defer and amortize the fair value of the awards in the same manner as other deferred policy acquisition costs. All agent equity awards that are not directly related to the acquisition of life insurance policies are recognized as expense in the quarter granted and earned.

	Year ended December 31,
	2018		2017			2016
	(Dollars in thousands, except per-share amounts)
Total quarterly non-employee RSUs granted		124,471		155,996			235,735
Measurement date per-share fair value of awards	$96.60 to $120.55		$67.82 to $91.88			$39.87 to $61.50
Illiquidity discounts	n/a			10	%	10% to 11%
Quarterly incentive awards expense recognized currently	$	3,288	$	980		$	910
Quarterly incentive awards expense deferred		9,484		10,821			10,517
Tax benefit associated with incentive awards		2,437		2,259			3,674

As of December 31, 2018, all agent equity awards were fully vested with the exception of approximately 34 thousand shares that vested on January 1, 2019. As such, any related compensation cost not recognized as either expense or DAC in our financial statements through December 31, 2018 is immaterial.