During the years ended December 31, 2018, 2017 and 2016, we recognized $37.3 million, $38.5 million and $41.1 million, respectively, in stock-based compensation expense, which was allocated between costs of goods sold and selling, general and administrative expenses on the consolidated statements of operations. We recognized tax benefits on stock-based compensation of $6.7 million, $12.1 million and $14.0 million for the years ended December 31, 2018, 2017 and 2016, respectively.

In 2013, Axalta’s Board of Directors approved the Axalta Coating Systems Ltd. 2013 Incentive Award Plan (the "2013 Plan") which reserved shares of common stock of the Company for issuance to employees, directors and consultants. The 2013 Plan provided for the issuance of stock options, restricted stock or other stock-based awards. No further awards may be granted pursuant to the 2013 Plan.

In 2014, Axalta's Board of Directors approved the Axalta Coating Systems Ltd. 2014 Incentive Award Plan, as amended and restated (the "2014 Plan"), which reserved additional shares of common stock of the Company for issuance to employees, directors and consultants. The 2014 Plan provides for the issuance of stock options, restricted stock or other stock-based awards. All awards granted pursuant to the 2014 Plan must be authorized by the Board of Directors of Axalta or a designated committee thereof. Our Board of Directors has generally delegated responsibility for administering the 2014 Plan to our Compensation Committee.

The terms of the stock options may vary with each grant and are determined by the Compensation Committee within the guidelines of the 2013 and 2014 Plans. Option life cannot exceed ten years and the Company may settle option exercises by issuing new shares, treasury shares or shares purchased on the open market.

The Black-Scholes option pricing model was used to estimate fair values of the options as of the date of the grant. The weighted average fair values of options granted in 2018, 2017 and 2016 were $6.78, $7.69 and $5.69 per share, respectively. Options granted have a 3-year vesting period. Principal weighted average assumptions used in applying the Black-Scholes model were as follows:



	2018 Grants		2017 Grants		2016 Grants
Expected Term	6.0 years		6.0 years		6.0 years
Volatility	20.27	%	21.75	%	21.63	%
Dividend Yield	—		—		—
Discount Rate	2.66	%	2.03	%	1.45	%

The expected term assumptions used for the grants mentioned in the above table were determined using the simplified method. We do not anticipate paying cash dividends in the foreseeable future and, therefore, use an expected dividend yield of zero. Volatility for outstanding grants was based upon our industry peer group since we have a limited history as a public company. The discount rate was derived from the U.S. Treasury yield curve.



	Awards (in millions)		Weighted- Average Exercise Price		Aggregate Intrinsic Value (in millions)		Weighted Average Remaining Contractual Life (years)
Outstanding at December 31, 2017	8.1		$	16.54
Granted	1.1		$	29.74
Exercised	(1.7	)	$	10.52
Forfeited	(0.3	)	$	29.59
Outstanding at December 31, 2018	7.2		$	19.32
Vested and expected to vest at December 31, 2018	7.2		$	19.32	$	48.0	5.76
Exercisable at December 31, 2018	5.6		$	16.80	$	48.0	5.08

Cash received by the Company upon exercise of options in 2018 was $17.4 million. Tax benefits on these exercises were $6.6 million. For the years ended December 31, 2018, 2017 and 2016, the intrinsic value of options exercised was $33.6 million, $42.2 million and $42.5 million, respectively.

At December 31, 2018, there was $3.6 million of unrecognized compensation cost relating to outstanding unvested stock options expected to be recognized over the weighted average period of 1.4 years.

During the year ended December 31, 2018, we issued 1.1 million shares of restricted stock awards and restricted stock units. A majority of these awards vests ratably over three years. The other awards granted cliff vest over one, two, three or four year periods.

A summary of restricted stock and restricted stock unit award activity as of December 31, 2018 is presented below:



	Awards (in millions)		Weighted-Average Fair Value
Outstanding at December 31, 2017	1.9		$	29.32
Granted	1.1		$	29.61
Vested	(1.2	)	$	29.84
Forfeited	(0.2	)	$	29.33
Outstanding at December 31, 2018	1.6		$	29.12

At December 31, 2018, there was $19.3 million of unamortized expense relating to unvested restricted stock awards and restricted stock units that is expected to be amortized over a weighted average period of 1.6 years.

The intrinsic value of awards vested during 2018, 2017 and 2016 was $36.2 million, $30.1 million and $5.5 million, respectively. The total fair value of awards vested during 2018, 2017 and 2016 was $35.3 million, $29.4 million and $6.2 million, respectively.

During the year ended December 31, 2018, the Company granted performance stock awards and performance share units (collectively referred to as "PSAs") to certain employees of the Company as part of their annual equity compensation award.

PSAs are tied to the Company’s total shareholder return ("TSR") relative to the TSR of a selected industry peer group or S&P 500. Each award vests over a period of three years and covers a performance cycle of three years starting at the beginning of the fiscal year in which the shares were granted. Awards will cliff vest upon meeting the applicable TSR thresholds and the service requirement of three years. The actual number of shares awarded is adjusted to between zero and 200% of the target award amount based upon achievement of pre-determined objectives. TSR relative to peers is considered a market condition under applicable authoritative guidance.



	Awards (in millions)		Weighted-Average Fair Value
Outstanding at December 31, 2017	0.6		$	31.17
Granted	0.3		$	33.81
Vested	—		$	—
Forfeited	(0.1	)	$	33.65
Outstanding at December 31, 2018	0.8		$	31.82