11.	EQUITY-BASED COMPENSATION

The Amended and Restated Cable One, Inc.

2015

Omnibus Incentive Compensation Plan (the

“2015

Plan”) provides for grants of incentive stock options, non-qualified stock options, restricted stock awards, SARs, restricted stock units (“RSUs”), cash-based awards, performance-based awards, dividend equivalent units (“DEUs”), and other stock-based awards, including performance stock units and deferred stock units. Directors, officers and employees of the Company and its affiliates are eligible for grants under the

2015

Plan as part of the Company’s approach on long-term incentive compensation.

Restricted stock awards granted to employees are subject to service-based vesting and certain awards are also subject to performance-based vesting and generally cliff-vest on the

three

-year anniversary of the grant date or, for certain service-based awards, in

four

equal ratable installments beginning on the

first

anniversary of the grant date. SARs granted to employees vest in

four

equal ratable installments beginning on the

first

anniversary of the grant date. RSUs are generally granted to non-employee directors on the date of the Company’s annual stockholders’ meeting and vest on the earlier of the

first

anniversary of the grant date or the annual stockholders’ meeting date immediately following the grant date. In

January 2018,

certain non-employee directors who elected to defer all or a portion of their annual cash fees were granted RSU awards in lieu of such fees, and such RSUs will vest in full on the date immediately preceding the date of the

2018

annual stockholders’ meeting. The settlement of these RSUs will follow vesting, unless the director has previously elected to defer such settlement until the earliest of his or her separation from service from the Board, a date specified by the director or a change in control of the Company.

The

2015

Plan provides, that, subject to certain adjustments for specified corporate events, the maximum number of shares of common stock that

may

be issued under the

2015

Plan is

334,870.

March 31, 2018,

266,731

shares were available for issuance under the

2015

Plan.

Compensation expense associated with equity based awards is recognized on a straight-line basis over the vesting period, with forfeitures recognized as incurred. Equity-based compensation expense of

$2.3

million and

$2.4

million for the

three

months ended

March 31, 2018

and

2017,

respectively, was included in selling, general and administrative expenses within the condensed consolidated statements of operations and comprehensive income. The Company recognized an income tax benefit of

$2.4

million related to equity-based awards during the

three

months ended

March 31, 2018.

The deferred tax asset related to all outstanding equity-based awards was

$2.7

million as of

March 31, 2018.

Restricted Stock Awards.

Restricted shares, RSUs and DEUs are collectively referred to as “restricted stock.” A summary of restricted stock activity during the

three

months ended

March 31, 2018

is as follows:

				Weighted Average
				Grant Date
	Restricted			Fair Value
	Stock			Per Share
Outstanding as of December 31, 2017		51,290		$	472.89
Granted		11,039		$	707.20
Forfeited		(818	)	$	595.99
Vested		(24,171	)	$	391.19
Outstanding as of March 31, 2018		37,340		$	592.42

Vested and unissued as of March 31, 2018		3,185		$	436.93

Equity-based compensation expense for restricted stock was

$1.4

million and

$1.7

million for the

three

months ended

March 31, 2018

and

2017.

March 31, 2018,

there was

$10.2

million of unrecognized compensation expense related to restricted stock, which is expected to be recognized over a weighted average period of

1.7

years.

Stock Appreciation Rights.

A summary of SAR activity during the

three

months ended

March 31, 2018

is as follows:

	Stock Appreciation Rights			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Aggregate Intrinsic Value ( in thousands )		Weighted Average Remaining Contractual Term (in y ears)
Outstanding as of December 31, 2017		102,458		$	477.62	$	100.91	$	23,173		8.1
Granted		12,500		$	707.17	$	169.54	$	-		9.8
Exercised		(11,157	)	$	432.23	$	89.73
Forfeited		(2,249	)	$	422.31	$	87.22
Outstanding as of March 31, 2018		101,552		$	512.09	$	110.89	$	18,116		8.1

Vested and exercisable as of March 31, 2018		15,795		$	482.94	$	102.51	$	3,225		7.8

The grant date fair value of the Company’s SARs is measured using the Black-Scholes valuation model. The weighted average inputs used in the model for grants awarded during the

three

months ended

March 31, 2018

were as follows:

	2018
Expected volatility		22.53	%
Risk-free interest rate		2.31	%
Expected term (in years)		6.25
Expected dividend yield		0.98	%

Equity-based compensation expense for SARs was

$0.9

million and

$0.7

million for the

three

months ended

March 31, 2018.

March 31, 2018,

there was

$7.9

million of unrecognized compensation expense related to SARs, which is expected to be recognized over a weighted average period of

1.3

years.