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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Share-Based Compensation | 18. Share-based Compensation On April 11, 2014, HC2’s Board of Directors adopted the HC2 Holdings, Inc. 2014 Omnibus Equity Award Plan (the “Omnibus Plan”), which was approved by our stockholders at the annual meeting of stockholders held on June 12, 2014. The Omnibus Plan provides that no further awards will be granted pursuant to the Company’s Management Compensation Plan, as amended (the “Prior Plan”). However, awards that had been previously granted pursuant to the Prior Plan will continue to be subject to and governed by the terms of the Prior Plan. The Compensation Committee of HC2's Board of Directors administers HC2's Omnibus Plan and the Prior Plan and has broad authority to administer, construe and interpret the plans. The Omnibus Plan provides for the grant of awards of non-qualified stock options, incentive (qualified) stock options, stock appreciation rights, restricted stock awards, restricted stock units, other stock based awards, performance compensation awards (including cash bonus awards) or any combination of the foregoing. The Company typically issues new shares of common stock upon the exercise of stock options, as opposed to using treasury shares. The Omnibus Plan authorizes the issuance of up to 5,000,000 shares of the Company’s common stock, subject to adjustment as provided in the Omnibus Plan. The Company follows guidance which addresses the accounting for share-based payment transactions whereby an entity receives employee services in exchange for either equity instruments of the enterprise or liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments. The guidance generally requires that such transactions be accounted for using a fair-value based method and share-based compensation expense be recorded, based on the grant date fair value, estimated in accordance with the guidance, for all new and unvested stock awards that are ultimately expected to vest as the requisite service is rendered. The Company granted 1,506,848 and 2,552,673 options during the years ended December 31, 2016 and 2015, respectively. Of the total options granted during the years ended December 31, 2016 and 2015, 6,848 and 249,083, respectively, of such options were granted to Philip Falcone, pursuant to a standalone option agreement entered in connection with Mr. Falcone’s appointment as Chairman, President and Chief Executive Officer of the Company, and not pursuant to the Omnibus Plan. The anti-dilution protection provision contained in such standalone option agreement was canceled in April 2016 and replaced with an award consisting solely of 1,500,000 premium stock options issued under the Omnibus Plan. The weighted average fair value at date of grant for options granted during the years ended December 31, 2016, 2015 and 2014 was $1.09, $2.23 and $1, respectively, per option. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions shown as a weighted average for the year:
|  | Years Ended December 31,
|  | 2016 |  | 2015 |  | 2014
Expected option life (in years) |  | 4.70 - 6.00 |  | 4.80 - 5.50 |  | 5.50 - 6.00
Risk-free interest rate |  | 1.27 - 1.35% |  | 1.49 - 1.73% |  | 1.61 - 2.73%
Expected volatility |  | 39.58 - 55.58% |  | 36.29 - 53.83% |  | 36.74 - 40.50%
Dividend yield |  | —% |  | —% |  | —%
Total share-based compensation expense recognized by the Company and its subsidiaries under all equity compensation arrangements was $8.3 million, $11.1 million and $11.0 million for the years ended December 31, 2016, 2015 and 2014, respectively. All grants are time based, and vest either immediately, or over a period of up to 3 years. The Company recognizes compensation expense for equity awards, reduced by estimated forfeitures, using the straight-line basis. Restricted Stock A summary of HC2’s restricted stock activity is as follows:
|  | Shares |  | Weighted Average Grant Date Fair Value
Unvested—January 1, 2015 |  | 338,702 |  |  | $ | 4.26 |
Granted |  | 1,539,114 |  |  | $ | 9.14 |
Vested |  | (1,087,128 | ) |  | $ | 8.35 |
Forfeited |  | — |  |  | $ | — |
Unvested—December 31, 2015 |  | 790,688 |  |  | $ | 8.14 |
Granted |  | 301,040 |  |  | $ | 3.89 |
Vested |  | (959,196 | ) |  | $ | 7.17 |
Forfeited |  | (16,611 | ) |  | $ | 5.03 |
Unvested—December 31, 2016 |  | 115,921 |  |  | $ | 5.59 |
As of December 31, 2016, the unvested restricted stock represented $0.4 million of compensation expense that is expected to be recognized over the weighted average remaining vesting period of approximately 1.0 years. The number of shares of unvested restricted stock expected to vest is 113,281. Stock Options A summary of HC2’s stock option activity is as follows:
|  | Shares |  | Weighted Average Exercise Price
Outstanding—January 1, 2015 |  | 3,573,141 |  |  | $ | 4.27 |
Granted |  | 2,552,673 |  |  | $ | 6.74 |
Exercised |  | — |  |  | $ | — |
Forfeited |  | (764,529 | ) |  | $ | 4.05 |
Outstanding—December 31, 2015 |  | 5,361,285 |  |  | $ | 5.48 |
Granted |  | 1,506,848 |  |  | $ | 10.49 |
Exercised |  | (2,000 | ) |  | $ | 4.06 |
Forfeited |  | (2,800 | ) |  | $ | 4.06 |
Expired |  | (34,236 | ) |  | $ | 6.68 |
Outstanding—December 31, 2016 |  | 6,829,097 |  |  | $ | 6.58 |
Eligible for exercise |  | 4,885,967 |  |  | $ | 5.31 |
As of December 31, 2016, intrinsic value and average remaining life of the Company's outstanding and exercisable options were $5.7 million and $5.7 million and approximately 7.97 and 7.57 years, respectively. As of December 31, 2016, the unvested stock options outstanding represented $2.3 million of compensation expense is expected to be recognized over the weighted average remaining vesting period of 1.65 years. The number of unvested stock options expected to vest is 1,943,130 shares, with a weighted average remaining life of 8.97 years, a weighted average exercise price of $9.75, and an intrinsic value of $0.

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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=6418621&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=51659978&loc=d3e25284-112666 Reference 3: 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 4: 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 5: 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 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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