Key Energy Services, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
NOTE 21. SHARE-BASED COMPENSATION
Equity and Cash Incentive Plan
On the Effective Date, pursuant to the Plan, the Company adopted a new management incentive plan titled the Key Energy Services, Inc. 2016 Equity and Cash Incentive Plan. The 2016 Incentive Plan authorizes the grant of compensation described in the following sentence comprised of stock or economic rights tied to the value of stock collectively representing up to 11% of the fully diluted shares of Common Stock as of the Effective Date (without regard to shares reserved for issuance pursuant to the Warrants) (as increased by the Board from the initial pool of 7% of fully diluted shares on the Effective Date, as permitted under the terms of the 2016 Incentive Plan). The 2016 Incentive Plan provides for awards of restricted stock, restricted stock units, options, stock appreciation rights and cash-based awards, for distribution to officers, directors and employees of the Company and its subsidiaries as determined by the New Board. As of the Effective Date, the New Board or an authorized committee thereof is authorized, without further approval of Key equity holders, to execute and deliver all agreements, documents, instruments and certificates relating to the 2016 Incentive Plan and to perform their obligations thereunder in accordance with, and subject to, the terms of the 2016 Incentive Plan. As of December 31, 2017, there were 1.0 million shares available for grant under the 2016 ECIP.
Stock Option Awards
Stock option awards granted under our incentive plans have a maximum contractual term of ten years from the date of grant. Shares issuable upon exercise of a stock option are issued from authorized but unissued shares of our common stock.
The following tables summarize the stock option activity for the year ended December 31, 2017 (shares in thousands):
Year Ended December 31, 2017
Outstanding at beginning of period
Canceled or expired
Outstanding at end of period
Exercisable at end of period
Cancellations for the year ended December 31, 2017 include 0.5 million options that were forfeited by employees in exchange for a new grant of time based and performance based RSUs which have different vesting terms than the forfeited options. The weighted average grant date fair market of stock options granted during the year ended December 31, 2017, period from December 16, 2016 through December 31, 2016, period from January 1, 2016 through December 15, 2016 and year ended December 31, 2015 was $12.14, $10.53, zero and zero, respectively. The total fair value of stock options vested during the year ended December 31, 2017, period from December 16, 2016 through December 31, 2016, period from January 1, 2016 through December 15, 2016 and year ended December 31, 2015 was $1.7 million, zero, zero and zero, respectively. For the year ended December 31, 2017, period from December 16, 2016 through December 31, 2016, period from January 1, 2016 through December 15, 2016 and year ended December 31, 2015, we recognized $1.8 million, $0.1 million, zero and zero in pre-tax expense related to stock options, respectively. The weighted average remaining contractual term for stock option awards exercisable as of December 31, 2017 is 9.0 years.