STOCK-BASED COMPENSATION

The Company's stock-based compensation awards are in the form of restricted stock and performance share awards made pursuant to the Company's 2005 Restricted Stock Plan, 2012 Restricted Stock Plan for Non-Employee Directors, and 2014 Incentive Plan (the "Plans"). Stock-based compensation cost is measured at the grant date based on the fair value of the award, and is recognized as an expense over the employee’s or non-employee director’s requisite service period. As of December 31, 2017, there were a total of 946,183 shares of common stock reserved under the Plans for issuance under future share-based payment arrangements.

The following table details total stock-based compensation expense for the years ended December 31, 2017, 2016 and 2015, included in the consolidated statements of operations:



(In thousands)	2017			2016			2015
Costs of sales	$	1,750		$	1,396		$	1,447
Operating expenses	5,416			3,970			3,933
Pre-tax stock-based compensation expense	7,166			5,366			5,380
Less: income tax effect	(2,795		)	(2,093		)	(2,098		)
Net (after tax) stock-based compensation expense	$	4,371		$	3,273		$	3,282

As of December 31, 2017, there was $11.4 million of unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plans, which is expected to be recognized over a weighted-average period of 2.08 years.

Restricted Stock

The Company grants restricted stock to executive officers, certain key employees and non-employee directors under the Plans with the fair value of the awards representing the fair value of the common stock on the date the restricted stock is granted. Shares of restricted stock generally vest in equal annual installments over the applicable vesting period, which ranges from one to five years. The Company records expenses for these grants on a straight-line basis over the applicable vesting periods.

A summary of restricted stock activity under the Plans during the years ended December 31, 2017, 2016 and 2015 is as follows:



	Shares		Weighted-Average Grant-Date Fair Value
Nonvested stock outstanding at January 1, 2015	160,216		$	59.14
Granted	60,850		51.85
Performance share awards converted to restricted stock	45,844		60.28
Vested	(62,628	)	59.30
Forfeited	(12,885	)	58.06
Nonvested stock outstanding at December 31, 2015	191,397		$	57.12
Granted	86,984		52.21
Vested	(93,496	)	57.48
Nonvested stock outstanding at December 31, 2016	184,885		$	54.63
Granted	225,954		32.79
Vested	(101,644	)	55.58
Nonvested stock outstanding at December 31, 2017	309,195		$	38.36

Performance Share Awards

In 2014, the Company began to grant performance share awards to executive officers and certain key employees under the 2014 Incentive Plan. The number of shares of common stock earned and issuable under the award is determined at the end of each performance period, based on the Company's achievement of performance goals predetermined by the Compensation Committee of the Board of Directors at the time of grant. If certain levels of the performance criteria are met, the award results in the issuance of shares of restricted stock corresponding to such level, which shares are then subject to time-based vesting pursuant to which the shares of restricted stock vest in equal annual installments over the applicable vesting period, which is generally three years for restricted stock issued pursuant to performance share awards.

In the event that the Company's financial performance meets the predetermined target for the performance criteria, the Company will issue each award recipient the number of restricted shares equal to the target award specified in the individual's underlying performance share award agreement. In the event the financial results of the Company exceed the predetermined target, additional shares up to the maximum award may be issued. In the event the financial results of the Company fall below the predetermined target, a reduced number of shares may be issued. If the financial results of the Company fall below the threshold performance level, no shares will be issued.

The recipients of performance share awards do not receive dividends or possess voting rights during the performance period and, accordingly, the fair value of the performance share awards is the quoted market value of the Company stock on the grant date less the present value of the expected dividends not received during the relevant period. Expense is recognized using the accelerated attribution (graded vesting) method over the period beginning on the date the Company determines that it is probable that the performance criteria will be achieved and ending on the last day of the vesting period for the restricted stock issued in satisfaction of such awards. In the event the Company determines it is no longer probable that the minimum performance level will be achieved, all previously recognized compensation expense related to the applicable awards is reversed in the period such a determination is made.

A summary of performance share award activity under the 2014 Incentive Plan for the years ended December 31, 2017, 2016 and 2015, is as follows, based on the target award amounts set forth in the performance share award agreements:



	Shares		Weighted-Average Grant-Date Fair Value
Performance share awards outstanding at January 1, 2015	46,541		$	60.28
Granted	52,364		49.29
Forfeited or unearned	(3,590	)	51.42
Performance share awards converted to restricted stock	(45,844	)	60.28
Performance share awards outstanding at December 31, 2015	49,471		$	49.29
Granted	77,594		49.64
Forfeited or unearned	(49,471	)	49.29
Performance share awards converted to restricted stock	—		—
Performance share awards outstanding at December 31, 2016	77,594		$	49.64
Granted	189,325		29.94
Forfeited or unearned	(77,594	)	49.64
Performance share awards converted to restricted stock	—		—
Performance share awards outstanding at December 31, 2017	189,325		$	29.94