Stock-Based Compensation

3 Months Ended

Mar. 31, 2017

9. STOCK-BASED COMPENSATION

The company has an equity incentive plan that reserves 3,000,000 shares of common stock for issuance to its directors and employees. The company is seeking shareholder approval to increase the number of shares reserved for the equity incentive plan to 4,110,000 at its 2017 annual meeting. The plan provides for shares, including options to purchase shares of common stock, stock appreciation rights tied to the value of common stock, restricted stock, and restricted and deferred stock unit awards, to be granted to eligible employees, non-employee directors and consultants. The company measures stock-based compensation at fair value on the grant date, adjusted for estimated forfeitures. The company records noncash compensation expense related to equity awards in its consolidated financial statements over the requisite period on a straight-line basis. Substantially all of the existing stock-based compensation has been equity awards.

The activity related to the exercisable stock options for the three months ended March 31, 2017, is as follows:


	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)

Outstanding at December 31, 2016	148,750	$	12.36	2.8	$	2,305
Granted	-		-	-		-
Exercised	(5,000)		10.00	-		78
Forfeited	-		-	-		-
Expired	-		-	-		-
Outstanding at March 31, 2017	143,750	$	12.44	2.6	$	1,770
Exercisable at March 31, 2017 (1)	143,750	$	12.44	2.6	$	1,770

(1)

Includes in-the-money options totaling 143,750 shares at a weighted-average exercise price of $12.44.

Option awards allow employees to exercise options through cash payment for the shares of common stock or simultaneous broker-assisted transactions in which the employee authorizes the exercise and immediate sale of the options in the open market. The company uses newly issued shares of common stock to satisfy its stock-based payment obligations.

The non-vested stock award and deferred stock unit activity for the three months ended March 31, 2017, is as follows:


	Non-Vested Shares and Deferred Stock Units	Weighted-Average Grant-Date Fair Value		Weighted-Average Remaining Vesting Term (in years)

Non-Vested at December 31, 2016	1,139,560	$	17.65
Granted	485,143		24.30
Forfeited	(27,717)		17.90
Vested	(426,163)		19.07
Non-Vested at March 31, 2017	1,170,823	$	19.89	2.3

Green Plains Partners

Green Plains Partners has adopted the LTIP, an incentive plan intended to promote the interests of the partnership, its general partner and affiliates by providing incentive compensation based on units to employees, consultants and directors to encourage superior performance. The incentive plan reserves 2,500,000 common units for issuance in the form of options, restricted units, phantom units, distributable equivalent rights, substitute awards, unit appreciation rights, unit awards, profits interest units or other unit-based awards. The partnership measures unit-based compensation related to equity awards in its consolidated financial statements over the requisite service period on a straight-line basis.

The non-vested unit-based awards activity for the three months ended March 31, 2017, is as follows:


	Non-Vested Shares and Deferred Stock Units	Weighted-Average Grant-Date Fair Value		Weighted-Average Remaining Vesting Term (in years)

Non-Vested at December 31, 2016	15,009	$	15.99
Granted	-		-
Forfeited	-		-
Vested	-		-
Non-Vested at March 31, 2017	15,009	$	15.99	0.3

Compensation costs for stock-based and unit-based payment plans during the three months ended March 31, 2017 and 2016 were approximately $2.5 million and $2.3 million, respectively. At March 31, 2017, there was $20.9 million of unrecognized compensation costs from stock-based and unit-based compensation related to non-vested awards. This compensation is expected to be recognized over a weighted-average period of approximately 2.3 years. The potential tax benefit related to stock-based payment is approximately 37.7% of these expenses.

- 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.

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