Stockholders’ Equity

Outstanding Securities

Our authorized capital stock consists of 50 million shares of common stock, par value $0.01 per share, and 5 million shares of preferred stock, par value $.01 per share. As of December 31, 2017 and 2016, there were approximately 24.1 million and 23.7 million shares, respectively, of our common stock outstanding and no shares of preferred stock outstanding. As of December 31, 2017, a warrant was outstanding to purchase 1.5 million shares of our common stock at an exercise price of $2.50 per share. The Board of Directors has the authority to issue up to 5 million shares of preferred stock and to fix the price, rights, preferences, privileges, and restrictions, including voting rights, of those shares without any further vote or action by the stockholders. Holders of common stock are entitled to one vote per share in the election of directors and on all other matters on which stockholders are entitled or permitted to vote. Holders of common stock are not entitled to cumulative voting rights. Therefore, holders of a majority of the shares voting for the election of directors can elect all the directors. Holders of common stock are entitled to dividends in amounts and at times as may be declared by the Board of Directors out of funds legally available. Upon liquidation or dissolution, holders of common stock are entitled to share ratably in all net assets available for distribution to stockholders after payment of any liquidation preferences to holders of preferred stock. Holders of common stock have no redemption, conversion or preemptive rights.

Share Repurchase and Dividends

In April 2005, our Board of Directors authorized a share repurchase program under which we can repurchase our outstanding shares of common stock from time to time, depending on market conditions, share price and other factors. As of December 31, 2017, we had approximately $15.3 million remaining under our share repurchase program. The repurchases may be made on the open market, in block trades, through privately negotiated transactions or otherwise, and the program may be suspended or discontinued at any time.

During the year ended December 31, 2017, we repurchased 419 thousand shares of common stock in connection with the New Credit Agreement. We did not repurchase any shares of common stock in the year ended December 31, 2016. As a result of shares withheld for tax purposes on the vesting of a restricted stock award, we increased our treasury shares by 103 thousand and 76 thousand in the years ended December 31, 2017 and 2016, respectively.

Under the New Credit Agreement, we are currently prohibited from repurchasing any shares of common stock, as well as declaring and paying ordinary cash or stock dividends.

Share Based Compensation

As of December 31, 2017, we have 3.3 million shares of common stock available for future grants of awards under the Plan, and awards for approximately 5.7 million shares are outstanding under all of our active and inactive plans. In April 2017, our Board of Directors approved a second amendment to the 2014 Plan to increase the number of shares authorized and reserved for issuance thereunder by 4.0 million shares, from 5.5 million shares to 9.5 million shares. The amendment was effective immediately upon our stockholders' approval in May 2017.

Stock Options

Total share based compensation expense recognized for stock options, which was included in general and administrative expense in our consolidated statements of operations, for the years ended December 31, 2017 and 2016 was $3.2 million and $80 thousand, respectively. The increase is due to grants of 2.1 million options in 2017, the majority of which were fully expensed on each grant date due to a retirement-age specific provision in our Executive Chairman and President's employment and award agreements.

The following table summarizes our stock option activity:



	2017			2016					Weighted
	Number of Shares	Weighted Average Exercise Price		Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Average Remaining Contractual Term
							(in thousands)		(in years)
Outstanding, beginning of year	861,366	$	3.99	778,590	$	5.36
Granted	2,146,190	$	3.85	379,000	$	2.30
Canceled	(74,324)	$	6.71	(296,224)	$	5.40
Exercised	—	$	—	—	$	—
Outstanding, end of year (1)	2,933,232	$	3.82	861,366	$	3.99	$	76	7.50
Exercisable at end of the year	408,042	$	5.07	482,366	$	5.33	$	—	1.44


(1)	Includes 658 thousand unvested options granted to a former employee. For additional information, please see Note 22.

The weighted average grant date fair value of options granted, based on the Black Scholes method, during the years ended December 31, 2017 and 2016 was $1.69 and $0.94, respectively.

For options exercised, intrinsic value is calculated as the difference between the market price on the date of exercise and the exercise price. There were no options exercised during the years ended December 31, 2017 or 2016.

As of December 31, 2017, there was $734 thousand of total unrecognized compensation cost related to unvested stock option arrangements granted under the Plan, all of which related to the options granted to a former employee (see Note 22). As of December 31, 2017, that cost was expected to be recognized over a weighted-average period of 1.2 years.

The following table summarizes information about employee stock options outstanding at December 31, 2017:



		Options Outstanding				Options Exercisable
Exercise Price	Shares		Weighted Average Remaining Contractual Term	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
			(in years)
$0 — $5.00	2,801,699		7.77	$	3.61	276,509	$	3.57
$5.01 — $10.00	105,783		1.38	$	6.76	105,783	$	6.76
$10.01 — $15.00	25,750		2.91	$	14.30	25,750	$	14.30
	2,933,232		7.50	$	3.82	408,042	$	5.07

Restricted Stock Units and Restricted Stock Awards

Total share based compensation recognized for restricted stock units and restricted stock awards (“RSUs”), which is included in general and administrative expenses in our consolidated statements of operations, for the years ended December 31, 2017 and 2016 was $5.4 million and $3.6 million, respectively.

The following table summarizes our RSUs activity:



	2017				2016
	Number of RSUs		Weighted Average Grant Date Fair Value		Number of RSUs		Weighted Average Grant Date Fair Value
Outstanding, beginning of year	3,363,946		$	2.78	2,167,212		$	4.24
Granted:
RSUs	2,001,642		$	4.35	789,167		$	2.38
Performance-based restricted stock units (1)	—		$	—	1,552,001		$	2.35
Total Granted	2,001,642		$	4.35	2,341,168		$	2.36
Canceled (2)	(1,914,319	)	$	2.75	(598,650	)	$	4.75
Vested	(713,916	)	$	3.61	(545,784	)	$	4.59
Outstanding, end of year (3)	2,737,353		$	3.83	3,363,946		$	2.78


(1)	Includes the maximum number of shares that could have vested from the performance-based restricted stock units (“PBRSUs”) granted in May 2016.


(2)	Includes shares net-settled to cover statutory employee taxes related to the vesting of restricted stock awards, which increased treasury shares by 103 thousand and 76 thousand in the years ended December 31, 2017 and 2016, respectively.


(3)	Includes 535 thousand RSUs granted to a former employee. For additional information, please see Note 22.

As of December 31, 2017, there was $6.9 million of total unrecognized compensation cost related to unvested restricted stock units granted under the Plans, including $1.2 million related to the RSUs granted to a former employee (see Note 22). As of December 31, 2017, that cost was expected to be recognized over the weighted-average contractual life of the RSUs of 1.6 years.

Other

As of December 31, 2017, we have an outstanding Warrant held by PEAK6 Investments to purchase an aggregate of 1.5 million shares of our common stock at an exercise price of $2.50 per share, for which we received $2.2 million in cash from PEAK6 Investments in the year ended December 31, 2017 in connection with the New Credit Agreement. For additional information, please see Note 15.

In addition to the stock options and RSUs, we determined the majority of the earn-out provisions in the business we acquired in March 2015 from Habits at Work to be share based compensation expense. We sold the Habits at Work business in June 2017. In the year ended December 31, 2017, we reduced share based compensation expense by $57 thousand due to actual Habits at Work performance being lower than forecasted. In the year ended December 31, 2016, we recorded share based compensation expense of $1.1 million. Due to the sale of the Habits at Work business, there is no remaining unrecognized compensation expense.