ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾

Annual report pursuant to Section 13 and 15(d)

STOCK-BASED COMPENSATION PLAN

v3.6.0.2
STOCK-BASED COMPENSATION PLAN
12 Months Ended
Dec. 31, 2016
STOCK-BASED COMPENSATION PLAN Ìý
STOCK-BASED COMPENSATION PLAN

23. STOCK-BASED COMPENSATION PLAN

ÌýÌýÌýÌýÌýÌýÌýÌýUnder the 2016 Stock Incentive Plan, we may grant nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, phantom stock, performance share units and other stock-based awards to our employees, directors and consultants and to employees and consultants of our subsidiaries, provided that incentive stock options may be granted solely to employees. The terms of the grants under both the 2016 Stock Incentive Plan and the Prior Plan are fixed at the grant date. As of DecemberÌý31, 2016, we were authorized to grant up to 8.2Ìýmillion shares under the 2016 Stock Incentive Plan. As of DecemberÌý31, 2016, we had approximately 8Ìýmillion shares remaining under the 2016 Stock Incentive Plan available for grant. Option awards have a maximum contractual term of 10Ìýyears and generally must have an exercise price at least equal to the market price of our common stock on the date the option award is granted. Outstanding stock-based awards generally vest over a three-year period; certain performance share unit awards vest over a two-year period.

ÌýÌýÌýÌýÌýÌýÌýÌýThe compensation cost from continuing operations under the 2016 Stock Incentive Plan and the Prior Plan for our Company and ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International were as follows (dollars in millions):

ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý

Ìý

Ìý

Year ended
DecemberÌý31,

Ìý

Ìý

Ìý

2016

Ìý

2015

Ìý

2014

Ìý

ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ Corporation compensation cost

Ìý

$

34Ìý

Ìý

$

30Ìý

Ìý

$

28Ìý

Ìý

ÀÖÌìÌÃfun88(ÖйúÇø)¹Ù·½ÍøÕ¾ International compensation cost

Ìý

Ìý

33Ìý

Ìý

Ìý

29Ìý

Ìý

Ìý

27Ìý

Ìý

ÌýÌýÌýÌýÌýÌýÌýÌýThe total income tax benefit recognized in the statement of operations for stock-based compensation arrangements was $7Ìýmillion, $6Ìýmillion and $6Ìýmillion for the years ended DecemberÌý31, 2016, 2015 and 2014, respectively.

STOCK OPTIONS

ÌýÌýÌýÌýÌýÌýÌýÌýThe fair value of each stock option award is estimated on the date of grant using the Black-Scholes valuation model that uses the assumptions noted in the following table. Expected volatilities are based on the historical volatility of our common stock through the grant date. The expected term of options granted was estimated based on the contractual term of the instruments and employees' expected exercise and post-vesting employment termination behavior. The risk-free rate for periods within the contractual life of the option was based on the U.S. Treasury yield curve in effect at the time of grant. The assumptions noted below represent the weighted averages of the assumptions utilized for all stock options granted during the year.

ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý

Ìý

Ìý

Year ended DecemberÌý31,

Ìý

Ìý

2016

Ìý

2015

Ìý

2014

Dividend yield

Ìý

5.6%

Ìý

2.3%

Ìý

2.4%

Expected volatility

Ìý

57.9%

Ìý

57.6%

Ìý

60.3%

Risk-free interest rate

Ìý

1.4%

Ìý

1.4%

Ìý

1.7%

Expected life of stock options granted during the period

Ìý

5.9Ìýyears

Ìý

5.9Ìýyears

Ìý

5.7Ìýyears

ÌýÌýÌýÌýÌýÌýÌýÌýA summary of stock option activity under the 2016 Stock Incentive Plan and the Prior Plan as of DecemberÌý31, 2016 and changes during the year then ended is presented below:

ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý

Option Awards

Ìý

Shares

Ìý

Weighted
Average
Exercise
Price

Ìý

Weighted
Average
Remaining
Contractual
Term

Ìý

Aggregate
Intrinsic
Value

Ìý

Ìý

Ìý

(in thousands)

Ìý

Ìý

Ìý

(years)

Ìý

(in millions)

Ìý

Outstanding at JanuaryÌý1, 2016

Ìý

Ìý

9,544

Ìý

$

15.51

Ìý

Ìý

Ìý

Ìý

Ìý

Ìý

Ìý

Granted

Ìý

Ìý

3,024

Ìý

Ìý

9.04

Ìý

Ìý

Ìý

Ìý

Ìý

Ìý

Ìý

Exercised

Ìý

Ìý

(148

)

Ìý

12.65

Ìý

Ìý

Ìý

Ìý

Ìý

Ìý

Ìý

Forfeited

Ìý

Ìý

(1,175

)

Ìý

19.70

Ìý

Ìý

Ìý

Ìý

Ìý

Ìý

Ìý

�

�

â€� Ìý

â€� Ìý

�

�

�

�

�

�

�

�

�

�

Outstanding at DecemberÌý31, 2016

Ìý

Ìý

11,245

Ìý

Ìý

13.37

Ìý

Ìý

5.5

Ìý

$

71

Ìý

�

�

â€� Ìý

â€� Ìý

�

�

�

�

�

�

�

�

�

�

�

�

â€� Ìý

â€� Ìý

�

�

�

�

�

�

�

�

�

�

Exercisable at DecemberÌý31, 2016

Ìý

Ìý

7,339

Ìý

Ìý

14.02

Ìý

Ìý

3.7

Ìý

Ìý

42

Ìý

�

�

â€� Ìý

â€� Ìý

�

�

�

�

�

�

�

�

�

�

�

�

â€� Ìý

â€� Ìý

�

�

�

�

�

�

�

�

�

�

ÌýÌýÌýÌýÌýÌýÌýÌýThe weighted-average grant-date fair value of stock options granted during 2016, 2015 and 2014 was $3.15, $9.81 and $9.63 per option, respectively. As of DecemberÌý31, 2016, there was $10Ìýmillion of total unrecognized compensation cost related to nonvested stock option arrangements granted under the 2016 Stock Incentive Plan and the Prior Plan. That cost is expected to be recognized over a weighted-average period of approximately 1.8Ìýyears.

ÌýÌýÌýÌýÌýÌýÌýÌýDuring the years ended DecemberÌý31, 2016, 2015 and 2014, the total intrinsic value of stock options exercised was approximately $1Ìýmillion, nil and $14Ìýmillion, respectively.

NONVESTED SHARES

ÌýÌýÌýÌýÌýÌýÌýÌýNonvested shares granted under the 2016 Stock Incentive Plan and the Prior Plan consist of restricted stock and performance share unit awards, which are accounted for as equity awards, and phantom stock, which is accounted for as a liability award because it can be settled in either stock or cash.

ÌýÌýÌýÌýÌýÌýÌýÌýThe fair value of each performance share unit award is estimated using a Monte Carlo simulation model that uses various assumptions, including an expected volatility rate and a risk-free interest rate. For the years ended DecemberÌý31, 2016 and 2015, the weighted-average expected volatility rate was 39.3% and 30.0%, respectively and the weighted average risk-free interest rate was 0.9% and 0.7%, respectively. For the performance share unit awards granted during the years ended DecemberÌý31, 2016 and 2015 the number of shares earned varies based upon the Company achieving certain performance criteria over two-year and three-year performance periods. The performance criteria are total stockholder return of our common stock relative to the total stockholder return of a specified industry peer group for the two-year and three-year performance periods. No performance share unit awards were granted during the year ended DecemberÌý31, 2014.

ÌýÌýÌýÌýÌýÌýÌýÌýA summary of the status of our nonvested shares as of DecemberÌý31, 2016 and changes during the year then ended is presented below:

ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý

Ìý

Ìý

Equity Awards

Ìý

Liability Awards

Ìý

Ìý

Ìý

Shares

Ìý

Weighted
Average
Grant-Date
Fair Value

Ìý

Shares

Ìý

Weighted
Average
Grant-Date
Fair Value

Ìý

Ìý

Ìý

(in thousands)

Ìý

Ìý

Ìý

(in thousands)

Ìý

Ìý

Ìý

Nonvested at JanuaryÌý1, 2016

Ìý

Ìý

1,854

Ìý

$

19.97

Ìý

Ìý

475

Ìý

$

21.37

Ìý

Granted

Ìý

Ìý

1,889

Ìý

Ìý

9.28

Ìý

Ìý

715

Ìý

Ìý

9.09

Ìý

Vested

Ìý

Ìý

(671)

(1)

Ìý

19.74

Ìý

Ìý

(243

)

Ìý

20.18

Ìý

Forfeited

Ìý

Ìý

(76

)

Ìý

16.42

Ìý

Ìý

(35

)

Ìý

15.74

Ìý

�

�

â€� Ìý

â€� Ìý

�

�

�

�

â€� Ìý

â€� Ìý

�

�

�

�

Nonvested at DecemberÌý31, 2016

Ìý

Ìý

2,996

Ìý

Ìý

13.36

Ìý

Ìý

912

Ìý

Ìý

12.27

Ìý

�

�

â€� Ìý

â€� Ìý

�

�

�

�

â€� Ìý

â€� Ìý

�

�

�

�

�

�

â€� Ìý

â€� Ìý

�

�

�

�

â€� Ìý

â€� Ìý

�

�

�

�


Ìý

Ìý

Ìý

(1)ÌýÌýÌýÌýÌýÌýÌýÌýÌýÌý

As of DecemberÌý31, 2016, a total of 454,900 restricted stock units were vested but not yet issued, of which 60,948 vested during 2016. These shares have not been reflected as vested shares in this table because, in accordance with the restricted stock unit agreements, shares of common stock are not issued for vested restricted stock units until termination of employment.

ÌýÌýÌýÌýÌýÌýÌýÌýAs of DecemberÌý31, 2016, there was $28Ìýmillion of total unrecognized compensation cost related to nonvested share compensation arrangements granted under the Stock Incentive Plan and the Prior Plan. That cost is expected to be recognized over a weighted-average period of approximately 1.9Ìýyears. The value of share awards that vested during the years ended DecemberÌý31, 2016, 2015 and 2014 was $16Ìýmillion, $20Ìýmillion and $19Ìýmillion, respectively.