Share-based Compensation

Pursuant to the Amended and Restated 2015 Management Incentive Plan as described in Note 18 “Capital Structure”, and in connection with the IPO, non-qualified stock options to purchase shares of Class A Common Stock were granted, each of which vests in equal annual installments over a period of four years from grant date and expires not later than 10 years from the date of grant.

The following table summarizes activity related to stock options for the three months ended March 31, 2019 and 2018:



	Options Outstanding					Options Exercisable
	Number of Options		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life	Number of Options		Weighted Average Exercise Price Per Share
At December 31, 2017	7,783,000		$	19.00	7.29	3,891,500		$	19.00
Granted	—		—		—	—		—
Exercised	(732,000	)	19.00		—	(732,000	)	19.00
Forfeited or expired	—		—		—	—		—
At March 31, 2018	7,051,000		19.00		7.05	3,182,000		19.00

At December 31, 2018	3,486,150		19.00		6.30	1,660,400		19.00
Granted	156,129		13.60		4.87	156,129		13.60
Exercised	(208,700	)	19.00		—	(208,700	)	19.00
Forfeited or expired	(40,000	)	—		—	—		—
At March 31, 2019	3,393,579		$	18.75	5.99	1,607,829		$	18.48

The expected life has been determined based on an average of vesting and contractual period. The risk-free interest rate was determined based on the yields available on U.S. Treasury zero-coupon issues. The expected stock price volatility was determined based on historical volatilities of comparable companies. The expected dividend yield was determined based on estimated future dividend payments divided by the IPO stock price.

The Company recognized $1.4 million and $1.4 million for the three months ended March 31, 2019 and 2018, respectively, of compensation expense in relation to the stock options issued and outstanding. As of March 31, 2019 and December 31, 2018, total unrecognized share-based compensation expense related to unvested stock options was $0.2 million and $1.6 million, respectively, and these amounts are to be recognized over a weighted average period of 0.0 and 0.3 years, respectively.

Amended and Restated Investment Technology Group, Inc. 2007 Omnibus Equity Compensation Plan

On the ITG Closing Date, the Company assumed the Amended and Restated ITG 2007 Equity Plan and certain stock option awards, restricted stock unit awards, deferred stock unit awards and performance stock unit awards granted under the Amended and Restated ITG 2007 Equity Plan (the “Assumed Awards”). The Assumed Awards are subject to the same terms and conditions that were applicable to them under the Amended and Restated ITG 2007 Equity Plan, except that (i) the Assumed Awards relate to shares of the Company’s Class A Common Stock, (ii) the number of shares of Class A Common Stock subject to the Assumed Awards was the result of an adjustment based upon an Exchange Ratio (as defined in the ITG Merger Agreement) and (iii) the performance share unit awards were converted into service-based vesting restricted stock unit awards that were no longer subject to any performance based vesting conditions. As of the ITG Closing Date, the aggregate number of shares of Class A Common Stock subject to such Assumed Awards was 2,497,028 and the aggregate number of shares of Class A Common Stock that remained issuable pursuant to the Amended and Restated ITG 2007 Equity Plan was 1,230,406. The Company filed a Registration Statement on Form S-8 on the ITG Closing Date to register such shares of Class A Common Stock.

Class A Common Stock and Restricted Stock Units

Pursuant to the Amended and Restated 2015 Management Incentive Plan as described in Note 18 “Capital Structure”, subsequent to the IPO, shares of immediately vested Class A Common Stock and restricted stock units were granted, with the latter vesting over a period of up to 4 years. The fair value of the Class A Common Stock and RSUs was determined based on a volume weighted average price and is being recognized on a straight-line basis over the vesting period. For the three months ended March 31, 2019 and 2018, respectively, there were 423,393 and 594,536 shares of immediately vested Class A Common Stock granted as part of year-end compensation. In addition, the Company accrued compensation expense of $2.7 million and $3.9 million for the three months ended March 31, 2019 and 2018, respectively, related to immediately vested Class A Common Stock expected to be awarded as part of year-end incentive compensation, which was included in Employee compensation and payroll taxes on the condensed consolidated statements of comprehensive income and Accounts payable, accrued expenses and other liabilities on the condensed consolidated statements of financial condition.

The following table summarizes activity related to the RSUs (including the Assumed Awards):



	Number of Shares		Weighted Average Fair Value
At December 31, 2017	853,047		$	17.94
Granted	1,044,690		20.64
Forfeited	(30,626	)	18.52
Vested	—		—
At March 31, 2018	1,867,111		18.85

At December 31, 2018	1,378,922		20.03
Granted	3,280,742		25.77
Forfeited	(156,414	)	20.70
Vested	(562,537	)	22.94
At March 31, 2019	3,940,713		$	24.37

The Company recognized $5.0 million and $4.0 million for the three months ended March 31, 2019 and 2018, respectively, of compensation expense in relation to the restricted stock units. As of March 31, 2019 and December 31, 2018, total unrecognized share-based compensation expense related to unvested RSUs was $83.5 million and $21.3 million, respectively, and this amount is to be recognized over a weighted average period of 2.0 and 1.7 years, respectively.