7. Stockholders’ Equity

Equity Based Awards

At the Company’s 2010 Annual Meeting of Stockholders, the stockholders of the Company approved the Company’s 2010 Long Term Incentive Plan (the “2010 Incentive Plan”). The 2010 Incentive Plan is administered by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”). A total of 1,500,000 shares of the Company’s common stock are reserved and 391,737 shares are available for issuance pursuant to awards granted under the 2010 Incentive Plan. A variety of discretionary awards for employees, officers, directors and consultants are authorized under the 2010 Incentive Plan, including incentive or non-qualified statutory stock options and nonvested stock. All awards must be evidenced by a written award certificate which will include the provisions specified by the Compensation Committee. The Compensation Committee will determine the exercise price for non-statutory stock options, which cannot be less than the fair market value of the Company's common stock as of the date of grant.

In the event of a change of control as defined in the 2010 Incentive Plan, all restricted periods and restrictions imposed on non-performance based restricted stock awards will lapse and outstanding options will become immediately exercisable in full.

Share Based Compensation

Nonvested Stock

The Company issues stock-based compensation to employees in the form of nonvested stock, which is an award of common stock subject to certain restrictions. The awards, which the Company calls nonvested shares, generally vest over a five year period, conditioned on continued employment for the full incentive period. Compensation expense for the nonvested stock is recognized for the awards that are expected to vest. The expense is based on the fair value of the awards on the date of grant recognized on a straight-line basis over the requisite service period, which generally relates to the vesting period.

During 2017, 2016 and 2015, respectively, 139,310, 220,800 and 182,865 nonvested shares were granted to employees pursuant to the 2010 Incentive Plan.

The Company also issues nonvested stock to its independent directors of the Company’s Board of Directors. During 2017, 2016 and 2015, respectively, 11,700, 15,300 and 16,200 nonvested shares of stock were granted to the independent directors under the 2005 Director Compensation Plan. The shares issued under the 2005 Director Compensation Plan were drawn from the 1,500,000 shares reserved for issuance under the 2010 Incentive Plan. The shares fully vest one year from the date of the grant, except for grants provided to new directors, which vest one-third on each of the first three anniversaries of the grant date.

The fair value of nonvested shares is determined based on the closing trading price of the Company’s shares on the grant date. The weighted average grant date fair values of nonvested shares granted during the years ended December 31, 2017, 2016 and 2015 were $48.52, $37.99 and $34.06, respectively.

The following table represents the nonvested stock activity for the year ended December 31, 2017:



	Number of Shares		Weighted Average Grant Date Fair Value
Nonvested shares outstanding at January 1, 2017	574,711		$	31.61
Granted	151,010		48.52
Vested	(192,463	)	28.95
Forfeited	(3,793	)	39.30
Nonvested shares outstanding at December 31, 2017	529,465		$	37.34

As of December 31, 2017, there was $13.4 million of total unrecognized compensation cost related to non-vested shares granted. That cost is expected to be recognized over the weighted average period of 2.99 years. The total fair value of shares vested in the year ended December 31, 2017 was $5.6 million and the total fair value of shares vested in the years December 31, 2016 and 2015 was $4.5 million and $4.1 million, respectively. The Company records compensation expense related to non-vested share awards at the grant date for shares that are awarded fully vested and over the vesting term on a straight line basis for shares that vest over time. The Company has recorded $6.0 million, $4.9 million and $4.2 million in compensation expense related to non-vested stock grants in the years ended December 31, 2017, 2016 and 2015, respectively.

Employee Stock Purchase Plan

In 2006, the Company adopted the Employee Stock Purchase Plan allowing eligible employees to purchase the Company’s common stock at 95% of the market price on the last day of each calendar quarter. There were 250,000 shares reserved for the plan.

On June 20, 2013, the Amended and Restated Employee Stock Purchase Plan was approved by the Company’s stockholders. As a result of the amendment, the Employee Stock Purchase Plan was modified as follows:


•	An additional 250,000 shares of common stock were authorized for issuance over the term of the Employee Stock Purchase Plan.


•	The term of the Employee Stock Purchase Plan was extended from January 1, 2016 to January 1, 2023.

The following table represents the shares issued during 2017, 2016 and 2015 under the Employee Stock Purchase Plan:



	Number of Shares	Weighted Average Per Share Price
Shares available as of December 31, 2014	236,483
Shares issued in 2015	22,723	$	34.37
Shares issued in 2016	24,149	$	37.79
Shares issued in 2017	18,542	$	55.40
Shares available as of December 31, 2017	171,069

Treasury Stock

In conjunction with the vesting of the non-vested shares of stock, recipients incur personal income tax obligations. The Company allows the recipients to turn in shares of common stock to satisfy those personal tax obligations. The Company redeemed 61,825, 52,119 and 42,197 shares of common stock related to these tax obligations during the years ended December 31, 2017, 2016 and 2015, respectively.