In order to attract and retain employees, non-employee directors, consultants, and other persons associated with us, we may grant qualified and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance shares and performance units under the LKQ Corporation 1998 Equity Incentive Plan (the “Equity Incentive Plan”). We have granted RSUs, stock options, and restricted stock under the Equity Incentive Plan. We expect to issue new shares of common stock to cover past and future equity grants.

RSUs

RSUs vest over periods of up to five years, subject to a continued service condition. Currently outstanding RSUs contain either a time-based vesting condition or a combination of a performance-based vesting condition and a time-based vesting condition, in which case, both conditions must be met before any RSUs vest. For the RSUs containing a performance-based vesting condition, the Company must report positive diluted earnings per share, subject to certain adjustments, during any fiscal year period within five years following the grant date. Each RSU converts into one share of LKQ common stock on the applicable vesting date. The grant date fair value of RSUs is based on the market price of LKQ stock on the grant date.

During the three months ended March 31, 2015, we granted 869,893 RSUs to employees. The fair value of RSUs that vested during the three months ended March 31, 2015 was $12.3 million.

The following table summarizes activity related to our RSUs under the Equity Incentive Plan for the three months ended March 31, 2015:



	Number Outstanding		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value (in thousands) ⁽¹⁾
Unvested as of January 1, 2015	2,151,232		$	20.97	$	60,493
Granted	869,893		$	27.00
Vested	(471,050	)	$	19.54
Forfeited / Canceled	(15,666	)	$	23.61
Unvested as of March 31, 2015	2,534,409		$	23.29	$	64,780
Expected to vest after March 31, 2015	2,436,315		$	23.12	$	62,272

⁽¹⁾The aggregate intrinsic value of unvested and expected to vest RSUs represents the total pretax intrinsic value (the fair value of the Company's stock on the last day of each period multiplied by the number of units) that would have been received by the holders had all RSUs vested as of January 1, 2015 and March 31, 2015, respectively. This amount changes based on the market price of the Company’s common stock.

Stock Options

Stock options vest over periods of up to five years, subject to a continued service condition. Stock options expire either six or ten years from the date they are granted. No options were granted during the three months ended March 31, 2015.

The following table summarizes activity related to our stock options under the Equity Incentive Plan for the three months ended March 31, 2015:



	Number Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands) ⁽¹⁾
Balance as of January 1, 2015	5,207,772		$	8.04	3.6	$	105,038
Exercised	(462,025	)	$	4.36
Forfeited / Canceled	(6,109	)	$	32.31
Balance as of March 31, 2015	4,739,638		$	8.36	3.5	$	82,180
Exercisable as of March 31, 2015	4,637,000		$	7.85	3.4	$	82,134
Exercisable as of March 31, 2015 and expected to vest thereafter	4,729,661		$	8.31	3.5	$	82,180

⁽¹⁾ The aggregate intrinsic value of outstanding, exercisable and expected to vest options represents the total pretax intrinsic value (the difference between the fair value of the Company's stock on the last day of each period and the exercise price, multiplied by the number of options where the fair value exceeds the exercise price) that would have been received by the option holders had all option holders exercised their options as of January 1, 2015 and March 31, 2015, respectively. This amount changes based on the market price of the Company’s common stock.

The following table summarizes the components of pre-tax stock-based compensation expense (in thousands):



	Three Months Ended
	March 31,
	2015		2014
RSUs	$	5,420	$	5,396
Stock options	126		804
Restricted stock	—		46
Total stock-based compensation expense	$	5,546	$	6,246

As of March 31, 2015, unrecognized compensation expense related to unvested RSUs and stock options is $45.4 million and $0.5 million, respectively, and is expected to be recognized over weighted-average periods of 3.4 years and 1.7 years, respectively. Stock-based compensation expense related to these awards will be different to the extent the actual forfeiture rates are different from our estimated forfeiture rates.