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Stock Options and Other Stock Based Compensation | 12 Months Ended
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Dec. 31, 2016
Stock Options and Other Stock Based Compensation |
Stock Options and Other Stock Based Compensation | 14. Stock Options and Other Stock Based Compensation The Company has various nonqualified plans approved by share owners under which it has granted stock options, restricted shares and performance vested restricted share units. At December 31, 2016, there were 5,081,000 shares available for grants under these plans. Total compensation cost for all grants of shares and units under these plans was $15 million, $15 million and $21 million for the years ended December 31, 2016, 2015 and 2014, respectively. Stock Options In general, subject to change in control, options become exercisable 25% per year beginning on the first anniversary of grant. No options may be exercised in whole or in part during the first year after the date granted. In general, options expire following termination of employment or the seventh anniversary of the option grant. The fair value of options is amortized over the vesting periods which range from one to four years. Stock option information at December 31, 2016 and for the year then ended is as follows:
|  |  |  |  |  |  | Weighted |  |  |  |
|  |  |  | Weighted |  | Average |  |  |  |
|  |  |  | Average |  | Remaining |  |  |  |
|  | Number of |  | Exercise |  | Contractual |  | Aggregate |
|  | Shares |  | Price |  | Term |  | Intrinsic |
|  | (thousands) |  | (per share) |  | (years) |  | Value |
Options outstanding at January 1, 2016 |  | 2,621 |  | $ | 23.64 |  |  |  |  |  |
Granted |  | 1,098 |  |  | 15.10 |  |  |  |  |  |
Exercised |  | (504) |  |  | 10.13 |  |  |  |  |  |
Forfeited or expired |  | (119) |  |  | 21.24 |  |  |  |  |  |
Options outstanding at December 31, 2016 |  | 3,096 |  |  | 22.91 |  | 4.2 |  | $ | 3 |
Options vested or expected to vest at December 31, 2016 |  | 3,096 |  | $ | 22.91 |  | 2.3 |  | $ | 3 |
Options exercisable at December 31, 2016 |  | 1,342 |  | $ | 27.71 |  | 4.2 |  | $ | — |
Certain additional information related to stock options is as follows for the periods indicated:
|  | 2016 |  | 2015 |  | 2014 |
Weighted average grant-date fair value of options granted (per share) |  | $ | 4.98 |  | $ | 7.79 |  | $ | 13.17 |
Aggregate intrinsic value of options exercised |  | $ | 2 |  | $ | — |  | $ | 3 |
Aggregate cash received from options exercised |  | $ | 5 |  | $ | 1 |  | $ | 5 |
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model using the following weighted average assumptions:
|  | 2016 |  | 2015 |  | 2014 |
Expected life of options (years) |  | 5.20 |  | 5.00 |  | 5.00 |
Expected stock price volatility |  | 32.8 | % | 34.5 | % | 43.0 | %
Risk-free interest rate |  | 1.5 | % | 1.7 | % | 1.6 | %
Expected dividend yield |  | 0.0 | % | 0.0 | % | 0.0 | %
The expected life of options is determined from historical exercise and termination data. The expected stock price volatility is determined by reference to historical prices over a period equal to the expected life. Restricted Shares and Restricted Share Units Shares granted after March 21, 2005 and prior to 2011, vest 25% per year beginning on the first anniversary and unvested shares are forfeited upon termination of employment. Restricted share units granted to employees after 2010 vest 25% per year beginning on the first anniversary. Holders of vested restricted share units receive one share of the Company’s common stock for each unit as units vest. Granted but unvested restricted share units are forfeited upon termination, unless certain retirement criteria are met. Restricted share units granted to directors vest after one year. The fair value of the restricted shares and restricted share units is equal to the market price of the Company’s common stock on the date of the grant. The fair value of restricted shares and restricted share units, is amortized over the vesting periods which range from one to four years. The activity of restricted shares and restricted share units is as follows:
|  |  |  | Weighted |
|  | Number of |  | Average |
|  | Restricted |  | Grant-Date |
|  | Shares |  | Fair Value |
|  | (thousands) |  | (per share) |
Nonvested at January 1, 2016 |  | 672 |  | $ | 23.66 |
Granted |  | 389 |  |  | 15.70 |
Vested |  | (215) |  |  | 25.88 |
Forfeited |  | (10) |  |  | 21.11 |
Nonvested at December 31, 2016 |  | 836 |  |  | 19.42 |
Awards granted during 2015 |  |  |  | $ | 22.69 |
Awards granted during 2014 |  |  |  | $ | 33.36 |
|  | 2016 |  | 2015 |  | 2014 |
Total fair value of shares vested |  | $ | 6 |  | $ | 4 |  | $ | 5 |
Performance Vested Restricted Share Units Performance vested restricted share units vest on January 1 of the third year following the year in which they are granted. Holders of vested units may receive up to 2 shares of the Company’s common stock for each unit, depending upon the attainment of consolidated performance goals established by the Compensation Committee of the Company’s Board of Directors. If minimum goals are not met, no shares will be issued. Granted but unvested restricted share units are forfeited upon termination of employment, unless certain retirement criteria are met. The fair value of each performance vested restricted share unit is equal to the product of the fair value of the Company’s common stock on the date of grant and the estimated number of shares into which the performance vested restricted share unit will be converted. The fair value of performance vested restricted share units is amortized ratably over the vesting period. Should the estimated number of shares into which the performance vested restricted share unit will be converted change, an adjustment will be recorded to recognize the accumulated difference in amortization between the revised and previous estimates. Performance vested restricted share unit activity is as follows:
|  | Number of Performance |  | Weighted Average |
|  | Vested Restricted Shares |  | Grant-Date Fair Value |
|  | Units (thousands) |  | (per unit) |
Nonvested at January 1, 2016 |  | 933 |  | $ | 26.80 |
Granted |  | 726 |  |  | 15.10 |
Vested |  | (158) |  |  | 26.10 |
Forfeited/Cancelled |  | (146) |  |  | 25.41 |
Nonvested at December 31, 2016 |  | 1,355 |  |  | 20.76 |
Awards granted during 2015 |  |  |  | $ | 23.63 |
Awards granted during 2014 |  |  |  | $ | 33.41 |
Approximately 158,000 shares were issued in 2016 with a fair value at issuance date of $4 million related to performance vested restricted share units. As of December 31, 2016, there was $17 million of total unrecognized compensation cost related to all unvested stock options, restricted shares, restricted share units and performance vested restricted share units. That cost is expected to be recognized over a weighted average period of approximately two years.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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