15.	Benefit Plans

Stock-Based Compensation

The Company’s equity-based award plans provide for grants to Company employees and directors of incentive and non-qualified options to purchase common shares, rights to receive the appreciation in value of common shares, awards of common shares subject to restrictions on transfer, awards of common shares issuable in the future upon satisfaction of certain conditions and rights to purchase common shares and other awards based on common shares. Under the terms of the plans, awards available for grant were 6.2 million common shares at December 31, 2015.

Stock Options

Stock options may be granted at per-share prices not less than fair market value at the date of grant and must be exercised within the maximum contractual term of 10 years thereof. Options granted under the plans generally vest over three years in one-third increments, beginning one year after the date of grant.

The fair values for option awards granted in 2015, 2014 and 2013 were estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

For the Year Ended December 31,

2015

2014

2013

Weighted-average fair value of grants

2.35

2.43

5.31

Risk-free interest rate (range) – Based upon the U.S. Treasury Strip

with a maturity date that approximates the expected term of the award

1.4%–1.6%

1.2%–1.4%

0.9%–1.8%

Dividend yield (range) – Forecasted dividend yield based on the

expected life

4.1%–4.3%

4.5%–4.6%

4.1%–4.5%

Expected life (range) – Derived by referring to actual exercise experience

4–5 years

5–6 years

Expected volatility (range) – Derived by using a 50/50 blend of implied

and historical changes in the Company's historical stock prices over a

time frame consistent with the expected life of the award

21.5%–23.4%

24.7%–28.5%

49.2%–52.5%

The following table reflects the stock option activity described above:

				Weighted-		Weighted- Average		Aggregate
	Number of Options (Thousands)			Average Exercise Price		Remaining Contractual Term (Years)		Intrinsic Value (Thousands)
Balance December 31, 2012		2,596		$	25.70
Granted		345			16.91
Exercised		(87	)		9.25
Forfeited		(193	)		28.10
Balance December 31, 2013		2,661			24.77
Granted		774			16.61
Exercised		(154	)		10.02
Forfeited		(320	)		33.40
Balance December 31, 2014		2,961			22.48
Granted		557			19.26
Exercised		(234	)		12.85
Forfeited		(472	)		36.51
Balance December 31, 2015		2,812		$	20.29		5.6	$	6,867

Options exercisable at December 31,
2015		1,760		$	21.69		4.2	$	6,764
2014		1,922			25.75		4.0		9,077
2013		2,052			27.53		4.1		6,491

The following table summarizes the characteristics of the options outstanding at December 31, 2015 (in thousands):

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Outstanding at 12/31/15		Weighted-Average Remaining Contractual Life (Years)		Weighted-Average Exercise Price		Exercisable at 12/31/15		Weighted-Average Exercise Price
$0.00–$12.00		566		3.3	$	6.92		566	$	6.92
$12.01–$16.00		371		5.7		13.85		371		13.85
$16.01–$21.00		1,415		7.9		17.64		363		16.76
$21.01–$69.50		460		1.5		50.09		460		50.09
		2,812		5.6	$	20.29		1,760	$	21.69

The following table reflects the activity for unvested stock option awards for the year ended December 31, 2015 (options in thousands):

	Options			Weighted-Average Grant Date Fair Value
Unvested at December 31, 2014		1,039		$	3.23
Granted		557			2.35
Vested		(438	)		3.64
Forfeited		(106	)		2.71
Unvested at December 31, 2015		1,052		$	2.64

As of December 31, 2015, total unrecognized stock option compensation cost granted under the plans was $1.4 million, which is expected to be recognized over a weighted-average 1.6-year term.

Exercises of Employee Stock Options

The following table summarizes the activity of employee stock option exercises that are primarily settled with newly issued common shares or with treasury shares, if available (in millions):

	For the Year Ended December 31,
	2015		2014		2013
Cash received for exercise price	$	2.5	$	1.5	$	0.8
Intrinsic value		1.2		1.1		0.7

Restricted Stock Awards

The Board of Directors approved grants to executives of the Company of restricted common shares of 0.2 million in 2015 and 2013, and 0.3 million in 2014. The restricted stock grants generally vest in equal annual amounts over a four-year period. Restricted share awards have the same cash dividend and voting rights as other common stock and are considered to be currently issued and outstanding. These grants have a weighted-average fair value at the date of grant ranging from $9.25 to $19.54, which was equal to the market value of the Company’s common shares at the date of grant. As a component of compensation to the Company’s non-employee directors, the Company issued 0.1 million common shares to the non-employee directors in each of the three years ended December 31, 2015. These grants were issued equal to the market value of the Company’s common shares at the date of grant and immediately vested upon grant.

In 2009, the Company’s Board of Directors approved and adopted the Value Sharing Equity Program (the “2009 VSEP”) and the grant of awards to certain of the Company’s executives. These award grants are reflected as restricted stock and vest in equal annual amounts through December 31, 2016.

2013 Value Sharing Equity Program

The Company adopted the 2013 Value Sharing Equity Program (“2013 VSEP”) and on January 1, 2013, granted to certain officers of the Company awards that represent the opportunity to earn restricted stock grants through December 31, 2015. The 2013 VSEP awards earned resulted in the granting of common shares of the Company to participants on several measurement dates through December 31, 2015, and are subject to an additional service-based vesting schedule. As a result, in general, the total compensation available to participants under the 2013 VSEP will be fully earned and vested on December 31, 2019.

The 2013 VSEP was designed to allow DDR to reward participants for superior financial performance and allow them to share in value created based upon (1) increases in DDR’s adjusted market capitalization over pre-established periods and (2) increases in relative total shareholder return of DDR as compared to the performance of the FTSE NAREIT Equity REITs Total Return Index for the FTSE International Limited NAREIT U.S. Real Estate Index Series (the “NAREIT Index”). Under the 2013 VSEP, participants were granted two types of performance-based awards – an “absolute performance award” and a “relative performance award,” which were settled with DDR common shares.

Absolute Performance Awards. On December 31, 2015, the final measurement date, the Company measured the “Value Created” between the start of the 2013 VSEP through December 31, 2015. Value Created was determined as the increase in DDR’s market capitalization, as adjusted for equity issuances and/or equity repurchases. The share price used for purposes of determining Value Created for the absolute performance awards was capped based on an 8.0% compound annual growth rate for DDR shares from the start of the 2013 VSEP through the end of 2015 (the “Maximum Ending Share Price”).

The total share of Value Created for all participants for the absolute performance awards was capped at $18.0 million (the aggregate percentage share for all participants for the absolute performance awards was 1.4133%). As a result, each participant’s total share of Value Created for the absolute performance awards was capped at an individual maximum limit. An aggregate of 0.5 million common shares was issued under the terms of the plan.

Relative Performance Awards. Under the relative performance awards, on December 31, 2015, DDR compared its dividend-adjusted share price performance during the period between the start of the 2013 VSEP and December 31, 2015, to the performance of a comparable hypothetical investment in the NAREIT Index (in each case as adjusted for equity issuances and/or equity repurchases during the same period). No relative performance awards were earned under the terms of the plan.

The fair value of the 2013 VSEP awards was estimated on the date of grant using a Monte Carlo approach model based on the following assumptions:

	Range
Risk-free interest rate		0.36%
Weighted-average dividend yield		4.0%
Expected life	3 years
Expected volatility	18%–24%

Summary of Unvested Share Awards

The following table reflects the activity for the unvested awards pursuant to all restricted stock grants and grants pursuant to VSEP plans for the year ended December 31, 2015 (awards in thousands):

	Awards			Weighted-Average Grant Date Fair Value
Unvested at December 31, 2014		1,165		$	16.00
Granted		240			19.06
Vested		(582	)		15.83
Forfeited		(81	)		16.98
Unvested at December 31, 2015		742		$	17.03

As of December 31, 2015, total unrecognized compensation for the restricted awards granted under the plans as summarized above was $10.1 million, which is expected to be recognized over a weighted-average 2.0-year term.

Deferred Compensation Plans

The Company maintains a 401(k) defined contribution plan covering substantially all of the officers and employees of the Company in accordance with the provisions of the Code. Also, for certain officers, the Company maintains the Elective Deferred Compensation Plan and DDR Corp. Equity Deferred Compensation Plan, both non-qualified plans, which permit the deferral of base salaries, commissions and annual performance-based cash bonuses or receipt of restricted shares. In addition, directors of the Company are permitted to defer all or a portion of their fees pursuant to the Directors’ Deferred Compensation Plan, a non-qualified plan. All of these plans were fully funded at December 31, 2015.