Note 2. Share-Based Compensation

Viad grants share-based compensation awards to officers, directors, and certain key employees pursuant to the 2007 Viad Corp Omnibus Incentive Plan (the “2007 Plan”). The 2007 Plan has a 10-year life and provides for the following types of awards: (a) incentive and non-qualified stock options; (b) restricted stock and restricted stock units; (c) performance units or performance shares; (d) stock appreciation rights; (e) cash-based awards; and (f) certain other stock-based awards. The number of shares of common stock available for grant under the 2007 Plan is limited to 1.7 million shares plus shares awarded under the 1997 Viad Corp Omnibus Incentive Plan (which terminated in May 2007) (the “1997 Plan”) that subsequently cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent the shares are exercised for, or settled in, vested and non-forfeited shares) up to an aggregate maximum of 1.5 million shares. As of December 31, 2015, there were 959,330 total shares available for future grant.

The following table summarizes share-based compensation expense:

	Year Ended December 31,
(in thousands)	2015			2014			2013
Restricted stock	$	2,111		$	2,495		$	3,073
Performance unit incentive plan (“PUP”)		1,692			359			1,864
Restricted stock units		45			76			177
Stock options		—			—			107
Share-based compensation before income tax benefit		3,848			2,930			5,221
Income tax benefit		(1,454	)		(1,102	)		(1,936	)
Share-based compensation, net of income tax benefit	$	2,394		$	1,828		$	3,285

In addition, $45,000 of costs, $0.1 million of benefits, and $0.7 million of costs associated with share-based compensation were included in restructuring expense in 2015, 2014 and 2013, respectively. The 2015 amount of $45,000 related to restricted stock units. The 2014 amount of $0.1 million related to the reversal of expense of PUP awards. Of the 2013 amount, $0.3 million related to the restricted stock units and PUP awards. No share-based compensation costs were capitalized during 2015, 2014, or 2013.

On January 24, 2014 and October 25, 2013, Viad’s Board of Directors declared special cash dividends of $1.50 and $2.50 per share, respectively, to shareholders of record at the close of business on February 7, 2014 and November 7, 2013, respectively. In accordance with the mandatory provisions of the 2007 Plan and the 1997 Plan, the Human Resources Committee of Viad’s Board of Directors approved equitable adjustments to outstanding long-term incentive awards of stock options and PUP awards issued pursuant to those plans in order to prevent the special dividends from diluting the rights of participants under those plans. The equitable adjustments to the outstanding stock options reduced the exercise price and increased the number of shares of common stock underlying such options. The equitable adjustment to the PUP awards reflects the effect of the special dividends, but will be paid only if certain performance goals are met at the end of the three-year performance period.

The following table summarizes the activity of the outstanding share-based compensation awards:

	Restricted Stock					PUP Awards					Restricted Stock Units
	Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value
Balance, December 31, 2014		328,602		$	23.30		267,120		$	23.51		25,370		$	23.17
Granted		92,850		$	27.52		92,100		$	27.30		4,800		$	27.35
Vested		(109,050	)	$	20.51		(103,555	)	$	20.60		(11,623	)	$	20.91
Forfeited		(33,185	)	$	24.51		(24,500	)	$	25.23		(2,100	)	$	25.46
Balance, December 31, 2015		279,217		$	25.65		231,165		$	26.15		16,447		$	25.69

The grant date fair value of restricted stock which vested during 2015, 2014, and 2013 was $2.2 million, $4.5 million, and $3.5 million, respectively. As of December 31, 2015, the unamortized cost of all outstanding restricted stock awards was $2.7 million, which Viad expects to recognize in the consolidated financial statements over a weighted-average period of approximately 1.4 years. During 2015, 2014, and 2013, the Company repurchased 35,649 shares for $1.0 million, 72,996 shares for $1.8 million and 50,156 shares for $1.3 million, respectively, related to tax withholding requirements on vested share-based awards.

As of December 31, 2015 and 2014, Viad had liabilities recorded of $2.4 million and $3.5 million, respectively, related to PUP awards. In March 2015, the PUP units granted in 2012 vested and cash payouts totaling $2.5 million were distributed. In March 2014, the PUP units granted in 2011 vested and cash payouts totaling $2.9 million were distributed. There were no cash settlements of PUP awards during 2013. As of December 31, 2015 and 2014, Viad had aggregate liabilities recorded of $0.3 million and $0.5 million, respectively, related to restricted stock unit liability awards. In February 2015, portions of the 2010, 2011, and 2012 restricted stock unit awards vested and cash payouts totaling $0.3 million were distributed. Similarly, in February 2014 and 2013, portions of the 2010 and 2011 restricted stock unit awards vested and cash payouts of $0.2 million and $0.3 million were distributed, respectively. As discussed above, the equitable adjustment to the PUP awards reflects the effect of the special dividends, but would be paid only if certain performance goals are met at the end of the three-year performance period. This adjustment to the PUP awards did not impact the compensation expense recognized by the Company for the years ended December 31, 2015 and 2014, or the unrecognized cost.

The following table summarizes stock option activity:

	Shares			Weighted- Average Exercise Price		Options Exercisable
Options outstanding at December 31, 2014		247,590		$	17.82		247,590
Exercised		(54,076	)	$	16.62
Forfeited or expired		(129,741	)	$	18.91
Options outstanding at December 31, 2015		63,773		$	16.62		63,773

As of December 31, 2015, there were no unrecognized costs related to non-vested stock option awards. No stock options were granted in 2015, 2014, or 2013. As discussed above, the equitable adjustments to the outstanding stock options resulting from the special cash dividends paid on February 14, 2014 and November 14, 2013 reduced the exercise price and increased the number of shares of common stock underlying such options. This adjustment to the exercise price and the number of shares did not impact the compensation expense recognized by the Company for the years ended December 31, 2015 and 2014, or the unrecognized cost.

As of December 31, 2015, there were 63,773 stock options outstanding and exercisable with a weighted-average exercise price of $16.62 and a weighted-average remaining contractual life of 3.2 years.

Additional information pertaining to stock options is provided in the table below:

	December 31,
(in thousands)	2015		2014		2013
Total intrinsic value of stock options outstanding	$	740	$	2,251	$	2,723
Total intrinsic value of stock options exercised	$	1,474	$	1,616	$	1,611
Fair value of stock options vested	$	—	$	—	$	532
Cash received from the exercise of stock options	$	898	$	1,155	$	777
Tax benefits realized for tax deductions related to stock option exercises	$	104	$	461	$	404

The aggregate intrinsic value of stock options outstanding in the table above represents the difference between Viad’s closing stock price on December 31 of each year and the exercise price, multiplied by the number of in-the-money options. The intrinsic value of stock options outstanding therefore changes based on changes in the fair market value of Viad’s common stock.