14.	STOCK BASED COMPENSATION

2011

Omnibus Incentive Plan

— 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

2011.

An amendment of the

2011

Plan was approved by the Company’s stockholders on

May

25,

2016.

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 Options.

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 year ended

December

31,

2016

is presented below:

	Shares Underlying Awards			Weighted Average Exercise Price

Outstanding— January 1, 2016		227,449		$	6.68
Granted		--		$	--
Exercised		(21,664	)	$	6.52
Forfeited		(4,111	)	$	6.06
Expired		(3,111	)	$	5.35

Outstanding—December 31, 2016		198,563		$	6.73
Exercisable—December 31, 2016		184,674		$	6.62

The weighted average remaining contractual life of the outstanding options was

2.0

years and the aggregate intrinsic value of the options was approximately

$679,000

December

31,

2016

. The weighted average remaining contractual life of options exercisable was

2.0

years and the aggregate intrinsic value of those options was approximately

$652,000

December

31,

2016.

As of

December

31,

2016

, there was

$33,000

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

0.8

years. Compensation expense attributable to option awards totaled approximately

$108,000,

$148,000

and

$149,000

for the years ended

December

31,

2016,

2015

and

2014,

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

three

five

years.

A summary of the restricted stock unit activity in the Company’s

2011

Plan for the year ended

December

31,

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		(90,906	)	$	8.45
Forfeited		(5,078	)	$	7.73

Outstanding—December 31, 2016		262,669		$	8.41

As of

December

31,

2016

, there was

$1.3

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

1.9

years. Compensation expense attributable to awards of RSUs totaled approximately

$1.1

million,

$642,000

and

$329,000

for the years ended

December

31,

2016,

2015

and

2014,

respectively.

Performance Awards.

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

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.

RSUs which have been granted pursuant to performance awards are reflected in the RSU table above. 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. Compensation expense recognized for the year ended

December

31,

2016

was not significant.