FOOTNOTE 15

Stock-Based Compensation

The Company maintains a 2013 stock plan (the “2013 Plan”), which allows for grants of stock-based awards. At December 31, 2017, there were approximately 37 million share-based awards collectively available for grant under the 2013 Plan. The 2013 Plan generally provides for awards to vest over a minimum three-year period, although some awards entitle the recipient to shares of common stock if specified market or performance conditions are achieved and vest no earlier than one year from the date of grant. The stock-based awards granted to employees include stock options and time-based and performance-based restricted stock units, as follows:

Stock Options

The Company has issued both nonqualified and incentive stock options at exercise prices equal to the Company’s common stock price on the date of grant with contractual terms of ten years. Stock options issued by the Company generally vest and are expensed ratably over three years. Stock option grants are generally subject to forfeiture if employment terminates prior to vesting, except upon retirement, in which case the options may remain outstanding and exercisable for the remaining contractual term of the option. The Company has not granted stock options since 2011.

Time-Based Restricted Stock Units

Awards of time-based restricted stock units are independent of stock option grants and are generally subject to forfeiture if employment terminates prior to vesting. The awards generally cliff-vest in three years or vest ratably over three years from the date of grant. In the case of retirement (as defined in the award agreement), awards vest depending on the employee’s age and years of service.

The time-based restricted stock units have rights to dividend equivalents payable in cash. Time-based restricted stock units issued in 2016 and prior receive dividend payments at the same time as the shareholders of the Company’s stock. Time-based restricted stock units issued subsequent to 2016 have dividend equivalents credited to the recipient and are paid only to the extent the applicable service criteria is met and the time-based restricted stock units vest and the related stock is issued.

Performance-Based Restricted Stock Units

Performance-based restricted stock unit awards (“Performance-Based RSUs”) represent the right to receive unrestricted shares of stock based on the achievement of Company performance objectives and/or individual performance goals established by the Organizational Development & Compensation Committee and the Board of Directors.

The Performance-Based RSUs generally entitle recipients to shares of common stock if performance objectives are achieved, and typically vest no earlier than one year from the date of grant and primarily no later than three years from the date of grant. The actual number of shares that will ultimately vest is dependent on the level of achievement of the specified performance conditions. For restricted stock units with performance conditions that are based on stock price (“Stock-Price Based RSUs”), the grant date fair value of certain Stock-Price based RSUs is estimated using a Monte Carlo simulation, with the primary input into such valuation being the expected future volatility of the Company’s common stock, and if applicable, the volatilities of the common stocks of the companies in the Company’s peer group, upon which the relative total shareholder return performance is measured. In the case of retirement (as defined in the award agreement), awards vest depending on the employee’s age and years of service, subject to the satisfaction of the applicable performance criteria.

The Company accounts for stock-based compensation pursuant to relevant authoritative guidance, which requires measurement of compensation cost for all stock awards at fair value on the date of grant and recognition of compensation, net of estimated forfeitures, over the longer of the derived service period or explicit requisite service period for awards expected to vest. For non stock-price based Performance-Based RSUs, the Company assesses the probability of achievement of the performance conditions each period and records expense for the awards based on the probable achievement of such metrics.

With respect to Performance-Based RSUs, dividend equivalents are credited to the recipient and are paid only to the extent the applicable performance criteria are met and the Performance-Based RSUs vest and the related stock is issued.

The following table summarizes the changes in the number of shares of common stock under option for 2017 (shares and aggregate intrinsic value in millions):


	Shares			Weighted- Average Exercise Price Per Share		Weighted Average Remaining Life (years)		Aggregate Intrinsic Value
Outstanding at December 31, 2016		0.7		$	20
Exercised		(0.3	)	$	25

Outstanding at December 31, 2017 (a)		0.4		$	16		2.4	$	6.3

(a)	All options outstanding are exercisable

The total intrinsic value of options exercised was $5.5 million, $11.3 million and $32.8 million in 2017, 2016 and 2015, respectively.

The following table summarizes the changes in the number of outstanding restricted stock units for 2017 (shares in millions):


	Restricted Stock Units			Weighted- Average Grant Date Fair Value Per Share
Outstanding at December 31, 2016		4.3		$	48
Granted		2.0			47
Grant Adjustments (b)		0.1			39
Vested		(1.4	)		40
Forfeited		(0.6	)		48

Outstanding at December 31, 2017		4.4			50

Expected to vest at December 31, 2017		2.1			47

(b)	Represents the incremental shares issued from the shares originally granted which were dependent upon the achievement of specified performance criteria.

The weighted-average grant-date fair values of awards granted were $54 and $41 per share in 2016 and 2015, respectively. The fair values of awards that vested were $67.6 million, $54.1 million and $74.2 million in 2017, 2016 and 2015, respectively.

During 2017, the Company awarded 1.4 million Performance-Based RSUs, which had an aggregate grant date fair value of $65.9 million and entitle the recipients to shares of the Company’s common stock at the end of a three-year vesting period. The actual number of shares that will ultimately vest is dependent on the level of achievement of the specified performance conditions.

During 2017, the Company also awarded 0.6 million time-based RSUs, which had an aggregate grant date fair value of $26.3 million and entitle recipients to shares of the Company’s common stock at the end of the specified vesting period.

Excess tax benefits related to stock-based compensation for 2017, 2016 and 2015 were $5.9 million, $11.9 million and $27.1 million, respectively.

The following table summarizes the Company’s total unrecognized compensation cost related to stock-based compensation as of December 31, 2017 (in millions):


	Unrecognized Compensation Cost		Weighted-Average Period of Expense Recognition (in years)
Restricted stock units	$	87.9		1