NOTE 13: STOCK-RELATED BENEFIT PLANS

New York Community Bank Employee Stock Ownership Plan

All full-time employees who have attained 21 years of age and have completed twelve consecutive months of credited service are eligible to participate in the Employee Stock Ownership Plan (“ESOP”), with benefits vesting on a six-year basis, starting with 20% in the second year of employment and continuing in 20% increments in each successive year. Benefits are payable upon death, retirement, disability, or separation from service, and may be paid in stock. However, in the event of a change in control, as defined in the ESOP, any unvested portion of benefits shall vest immediately.

In 2016, 2015, and 2014, the Company allocated 617,031; 552,829; and 560,228 shares, respectively, to participants in the ESOP. For the years ended December 31, 2016, 2015, and 2014, the Company recorded ESOP-related compensation expense of $9.8 million, $9.2 million, and $8.8 million, respectively.

Supplemental Executive Retirement Plan

In 1993, the Community Bank established a Supplemental Executive Retirement Plan (“SERP”), which provided additional unfunded, non-qualified benefits to certain participants in the ESOP in the form of Company common stock. The SERP was frozen in 1999. Trust-held assets, consisting entirely of Company common stock, amounted to 1,729,319 and 1,653,737 shares, respectively, at December 31, 2016 and 2015, including shares purchased through dividend reinvestment. The cost of these shares is reflected as a reduction of paid-in capital in excess of par in the Consolidated Statements of Condition.

Stock Incentive and Stock Option Plans

At December 31, 2016, the Company had a total of 9,646,760 shares available for grants as options, restricted stock, or other forms of related rights under the New York Community Bancorp, Inc. 2012 Stock Incentive Plan (the “2012 Stock Incentive Plan”), which was approved by the Company’s shareholders at its Annual Meeting on June 7, 2012. The Company granted 2,805,652 shares of restricted stock, with an average fair value of $15.21 per share on the date of grant, during the twelve months ended December 31, 2016. During 2015 and 2014, the Company granted 2,352,641 shares and 2,377,498 shares, respectively, of restricted stock, which had average fair values of $15.83 and $16.79 per share on the respective grant dates. The shares of restricted stock that were granted during the years ended December 31, 2016, 2015, and 2014 vest over a period of five years. Compensation and benefits expense related to the restricted stock grants is recognized on a straight-line basis over the vesting period and totaled $32.7 million, $30.2 million, and $27.5 million, respectively, for the years ended December 31, 2016, 2015, and 2014.

The following table provides a summary of activity with regard to restricted stock awards in the year ended December 31, 2016:


	For the Year Ended December 31, 2016
	Number of Shares			Weighted Average Grant Date Fair Value
Unvested at beginning of year		6,362,117		$	15.44
Granted		2,805,652			15.21
Vested		(2,007,863	)		15.37
Cancelled		(229,600	)		15.23

Unvested at end of year		6,930,306			15.37

As of December 31, 2016, unrecognized compensation cost relating to unvested restricted stock totaled $77.4 million. This amount will be recognized over a remaining weighted average period of 2.9 years.

In addition, at December 31, 2016 and 2015, the Company had no stock option plans. At December 31, 2015, the Company had options outstanding under the 2004 Synergy Financial Group Stock Option Plan (the “Stock Option Plan”), all of which expired on March 1, 2016.

The Company uses the modified prospective approach to recognize compensation costs related to share-based payments at fair value on the date of grant, and recognizes such costs in the financial statements over the vesting period during which the employee provides service in exchange for the grant. As there were no unvested stock options at any time during 2016, 2015, or 2014, the Company did not record any compensation and benefits expense relating to stock options during those years.

To satisfy the exercise of options, the Company either issued new shares of common stock or used common stock held in Treasury. In the event that Treasury stock was used, the difference between the average cost of Treasury shares and the exercise price was recorded as an adjustment to retained earnings or paid-in capital on the date of exercise. At December 31, 2016, 2015, and 2014, respectively, there were 0; 2,400; and 58,560 stock options outstanding.

The status of the Stock Option Plan at December 31, 2016, and the changes that occurred during the year ended at that date, are summarized below:


	For the Year Ended December 31, 2016
	Number of Stock Options			Weighted Average Exercise Price
Stock options outstanding, beginning of year		2,400		$	16.88
Exercised		—			—
Expired		(2,400	)		16.88

Stock options outstanding, end of year		—			—
Options exercisable at year-end		—			—

There were no stock options outstanding or exercisable at December 31, 2016 and no options were exercised during the twelve months ended at that date. At December 31, 2015, the stock options outstanding and exercisable had no intrinsic value, and no options were exercised during the twelve months ended at that date. The intrinsic value of options exercised during the twelve months ended December 31, 2014 was $132,000.