STOCK-BASED COMPENSATION

Incentive Compensation Plan

The Company maintains the Hudson Global, Inc. 2009 Incentive Stock and Awards Plan, as amended and restated May 24, 2016 (the "ISAP"), pursuant to which it can issue equity-based compensation incentives to eligible participants. The ISAP permits the granting of stock options, restricted stock, restricted stock units, and other types of equity-based awards. The Compensation Committee of the Company’s Board of Directors (the "Compensation Committee") will establish such conditions as it deems appropriate on the granting or vesting of stock options, restricted stock, restricted stock units and other types of equity-based awards. As determined by the Compensation Committee, equity awards also may be subject to immediate vesting upon the occurrence of certain events following a change in control of the Company. The Company primarily grants restricted stock and restricted stock units to its employees. A restricted stock unit is equivalent to one share of the Company’s common stock and is payable only in common stock of the Company issued under the ISAP.

The Compensation Committee administers the ISAP and may designate any of the following as a participant under the ISAP: any officer or other employee of the Company or its affiliates or individuals engaged to become an officer or employee; consultants or other independent contractors who provide services to the Company or its affiliates; and non-employee directors of the Company. On May 24, 2016, the Company's stockholders approved an amendment and restatement of the ISAP to, among other things, increase the number of shares of the Company's common stock that are reserved for issuance by 2,400,000 shares. As of March 31, 2018, there were 1,519,116 shares of the Company’s common stock available for future issuance under the ISAP.

The Company also maintains the Director Deferred Share Plan (the "Director Plan") pursuant to which it can issue restricted stock units to its non-employee directors. A restricted stock unit is equivalent to one share of the Company’s common stock and is payable only in common stock issued under the ISAP upon a director ceasing service as a member of the Board of Directors of the Company. The restricted stock units vest immediately upon grant and are credited to each of the non-employee director's retirement accounts under the Director Plan. Restricted stock units issued under the Director Plan contain the right to a dividend equivalent award in the form of additional restricted stock units. The dividend equivalent award is calculated using the same rate as the cash dividend paid on a share of the Company's common stock, and then divided by the closing price of the Company’s common stock on the date the dividend is paid to determine the number of additional restricted stock units to grant. Dividend equivalent awards have the same vesting terms as the underlying awards. During the three months ended March 31, 2018, the Company granted 45,329 restricted stock units to its non-employee directors pursuant to the Director Plan. As of March 31, 2018, non-employee directors held a total of 919,113 deferred restricted stock units.

For the three months ended March 31, 2018 and 2017, the Company’s stock-based compensation expense related to stock options, restricted stock and restricted stock units were as follows:



	Three Months Ended March 31,
	2018		2017
Stock options	$	—	$	—
Restricted stock units	696		191
Total	$	696	$	191

Stock Options

Stock options granted by the Company generally expire between five and ten years after the date of grant and have an exercise price of at least 100% of the fair market value of the underlying share of common stock on the date of grant.

As of March 31, 2018, the Company had no unrecognized stock-based compensation expense related to outstanding unvested stock options.

Changes in the Company’s stock options for the three months ended March 31, 2018 and 2017 were as follows:



	Three Months Ended March 31,
	2018			2017
	Number of Options	Weighted Average Exercise Price per Share		Number of Options			Weighted Average Exercise Price per Share
Options outstanding at January 1,	100,000	$	3.86	123,500			$	6.16
Expired/forfeited	—	—		(6,500		)	16.90
Options outstanding at March 31,	100,000	$	3.86	$	117,000		$	5.56
Options exercisable at March 31,	100,000	$	3.86	$	117,000		$	5.56

Restricted Stock Units

As of March 31, 2018, the Company had approximately $103 of unrecognized stock-based compensation expense related to outstanding unvested restricted stock units. The Company expects to recognize that cost over a weighted average service period of 1.9 years. Restricted stock units have no voting or dividend rights until the awards are vested.

Changes in the Company’s restricted stock units for the three months ended March 31, 2018 and 2017 were as follows:



	Three Months Ended March 31,
	2018				2017
	Number of Restricted Stock Units		Weighted Average Grant-Date Fair Value		Number of Restricted Stock Units		Weighted Average Grant-Date Fair Value
Unvested restricted stock units at January 1,	1,088,933		$	1.16	480,000		$	2.79
Granted	45,329		2.14		1,077,000		1.00
Shares earned above target (a)	244,855		1.00		—		—
Vested	(498,919	)	1.28		(135,727	)	1.64
Forfeited	(7,515	)	1.00		(332,340	)	2.79
Unvested restricted stock units at March 31,	872,683		$	1.10	1,088,933		$	1.16


(a)	The number of shares earned above target are based on the performance target established by the Compensation Committee at the initial grant date.