13.	STOCK BASED COMPENSATION

The Company’s 2011 Omnibus Incentive Plan (the “2011 Plan”) was approved by the Company’s stockholders on April 29, 2011 and became effective May 3, 2011. The objectives of the 2011 Plan are to optimize the profitability and growth of the Company through incentives that are consistent with the Company’s goals and that align the personal interests of participants to those of the Company’s stockholders. The 2011 Plan provides for a committee of the Company’s Board of Directors to award nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, and other awards representing up to 2,144,743 shares of Company stock. Awards may be granted under the 2011 Plan up to ten years following the effective date of the plan. Each award under the 2011 Plan is governed by the terms of the individual award agreement, which specifies pricing, term, vesting, and other pertinent provisions. Shares issued in connection with stock compensation awards are issued from available authorized shares.

Stock Option

Option awards are generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant, generally vest based on five years of continuous service and have seven year contractual terms. The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. Expected volatilities are based on implied volatilities from historical volatility of the Company’s stock and other factors. The Company uses historical data to estimate option exercise, employee termination, and expected term of the options within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

A summary of the stock option activity in the Company’s 2011 Plan for the six months ended June 30, 2016, is presented below:

	Shares Underlying Awards		Weighted Average Exercise Price

Outstanding—January 1, 2016		227,449	$	6.68
Granted		--	$	--
Exercised		16,332	$	6.50
Forfeited		3,334	$	6.22

Outstanding—June 30, 2016		207,783	$	6.70
Exercisable—June 30, 2016		155,008	$	6.57

The weighted average remaining contractual life of the outstanding options was 2.5 years and the aggregate intrinsic value of the options was approximately $567,000 at June 30, 2016. The weighted average remaining contractual life of options exercisable was 2.5 years and the aggregate intrinsic value of the exercisable options was approximately $443,000 at June 30, 2016.

As of June 30, 2016, there was $73,000 of total unrecognized compensation costs related to nonvested stock options under the 2011 Plan. The cost is expected to be recognized over a weighted-average period of 1.0 years. Compensation expense attributable to option awards totaled approximately $33,000 and $36,000 for the three month periods ended June 30, 2016 and 2015 and approximately $68,000 and $72,000 for the six month periods ended June 30, 2016 and 2015, respectively.

Restricted Stock Units.

The fair value of each restricted stock unit (“RSU”) award is determined based on the closing market price of the Company’s stock on the grant date and amortized to compensation expense on a straight-line basis over the vesting period. The vesting periods range from one to five years.

A summary of the RSU activity in the Company’s 2011 Plan for the six months ended June 30, 2016, is presented below:

	Restricted Stock Units			Weighted Average Grant Date Fair Value

Outstanding—January 1, 2016		273,316		$	8.37
Granted		85,337		$	8.54
Vested		(58,879	)	$	8.30
Forfeited		(2,671	)	$	8.09

Outstanding—June 30, 2016		297,103		$	8.44

As of June 30, 2016, there was $1.7 million of total unrecognized compensation costs related to nonvested RSUs under the 2011 Plan. The cost is expected to be recognized over a weighted-average period of 2.3 years. Compensation expense attributable to awards of RSUs totaled approximately $270,000 and $111,000 for the three month periods ended June 30, 2016 and 2015, respectively, and approximately $685,000 and $191,000 for the six months ended June 30, 2016 and 2015, respectively.

Performance Awards

In January 2016, the Compensation Committee of the Company’s Board of Directors approved the grant of performance-based restricted stock units (“PSUs”) to certain members of executive and operational management under the 2011 Omnibus Incentive Plan for performance year 2016. PSUs are subject to the Company’s achievement of specified performance criteria for the year ended December 31, 2016. The value of the incentive can range from zero to 100% of the grantee’s base pay and will be paid 50% in cash and 50% in RSUs after the Compensation Committee has determined whether the performance goals have been achieved. The number of RSUs to be granted will be determined based on the dollar value of the award divided by the closing stock price on the date of grant following the performance period. The RSUs will vest 1/3 on the grant date and 1/3 on each of the next two anniversaries of the grant date. The Company began accruing estimated compensation cost as of the date of the Compensation Committee’s action, which was determined to be the service inception date.