STOCK COMPENSATION

Equity Incentive Plans

The Company's 2015 Equity Incentive Plan (the "2015 Plan") provides for the issuance of common stock in connection with the grant of non-qualified stock options, incentive stock options, restricted stock, restricted stock units, stock appreciation rights, performance units, common stock, or any other share-based award to eligible employees, consultants, and members of the Board. The Company also had two predecessor plans, the 2005 Equity Incentive Plan (the "2005 Plan") and the 2007 Equity Incentive Plan (the "2007 Plan"). Shares of common stock reserved and authorized for issuance at December 31, 2016 under all plans were 9,969,331 shares, subject to adjustment for future stock splits, stock dividends, and similar changes in capitalization.

Stock Option Activity

Stock option activity for the years ended December 31, 2016, 2015, and 2014 was:



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
	(in thousands, except exercise price and years)
Outstanding as of January 1, 2014	2,105		$	13.34	4.86	$	10,790
Granted	119		14.22
Exercised	(266	)	5.05
Forfeited or expired	(262	)	21.02
Outstanding as of December 31, 2014	1,696		$	13.52	3.88	$	4,435
Granted	35		13.52
Exercised	(285	)	6.54
Forfeited or expired	(150	)	21.82
Outstanding as of December 31, 2015	1,296		$	14.09	2.83	$	1,261
Granted	—		—
Exercised	(104	)	4.04
Forfeited or expired	(674	)	13.47
Outstanding as of December 31, 2016	518		$	16.90	3.99	$	186,184
Exercisable at December 31, 2016	447		$	17.37	3.48	$	186,184
Vested and expected to vest at December 31, 2016	518		$	16.90	3.97	$	186,184

No stock options were granted during 2016. During the years ended December 31, 2015 and 2014 stock options were valued using a Black Scholes option pricing model using the following assumptions:



	Year Ended December 31,
	2015	2014
Expected volatility	43%	44% - 50%
Dividend yield	—	—
Risk-free interest rate	1.50% - 1.72%	1.41% - 1.71%
Expected life (in years)	4.00	4.00

The weighted average grant date fair value of stock options granted during the years ended December 31, 2015 and 2014 was approximately $4.74, and $5.35, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2016, 2015, and 2014 was $0.5 million, $1.7 million, and $2.7 million, respectively. During the years ended December 31, 2016, 2015, and 2014 the Company received $0.4 million, $1.9 million and $1.3 million cash in connection with the exercise of stock options. The total grant date fair value of stock options vested during the years ended December 31, 2016, 2015, and 2014 was $0.3 million, $0.7 million, and $0.8 million, respectively.

As of December 31, 2016, the Company had $0.3 million of total unrecognized share-based compensation expense related to unvested options, which is expected to be amortized over the remaining weighted average period of 1.81 years.

Stock options under both the 2005 Plan and the 2007 Plan generally vest ratably over four years with the first vesting occurring one year from the date of grant, followed by monthly vesting for the remaining three years.

Restricted Stock Awards and Units

From time to time, restricted stock awards ("RSAs") and restricted stock units ("RSUs") are granted to employees. RSAs and RSUs generally vest over three years, depending on the terms of the grant. Holders of unvested RSAs have the same rights as those of common stockholders including voting rights and non-forfeitable dividend rights. However, ownership of unvested RSAs cannot be transferred until vested. Holders of unvested RSUs have a contractual right to receive a share of common stock upon vesting. RSUs have dividend equivalent rights which accrue over the term of the award and are paid if and when the RSUs vest, but RSU holders have no voting rights. The Company grants time-based RSUs and performance-based RSUs.

Time-based RSUs are typically granted on an annual basis to certain executive and non-executive employees and vest on a straight-line basis in three annual installments, beginning one year after the grant date. During the years ended December 31, 2016, 2015, and 2014, the Board approved grants of 0.4 million, 0.4 million, and 0.3 million RSUs to certain non-executives.

During the years ended December 31, 2016, 2015, and 2014, the Board approved the grant of 1.2 million, 1.5 million, and 0.9 million, respectively, RSUs to certain executives as part of a performance incentive program.

Performance-based RSUs are granted on an annual basis to certain executive employees and consist of a time-based and performance-based component. Under the time-based component, RSUs vest at the end of each of the three years beginning one year from the grant date. The performance targets and vesting conditions for performance-based RSU's are based on achievement of multiple weighted performance goals, and vest upon certification of the compensation committee plus an additional service period.

RSA and RSU activity during the years ended December 31, 2016, 2015, and 2014 was:



	Restricted Stock Awards				Restricted Stock Units
	Shares		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value
Unvested at January 1, 2014	210,490		$	13.43	1,965,667		$	16.50
Granted	9,973		15.04		1,749,993		16.05
Vested	(68,420	)	15.03		(541,888	)	17.64
Forfeited	(144,555	)	12.67		(1,176,301	)	16.51
Unvested at December 31, 2014	7,488		$	15.61	1,997,471		$	15.78
Granted	15,987		15.01		2,866,562		10.14
Vested	(15,480	)	15.30		(505,025	)	16.20
Forfeited	(1,328	)	15.00		(1,270,630	)	14.14
Unvested at December 31, 2015	6,667		$	15.00	3,088,378		$	10.75
Granted	22,860		10.28		2,312,121		9.16
Vested	(18,097	)	12.02		(612,370	)	13.05
Forfeited	—		—		(932,761	)	11.26
Unvested at December 31, 2016	11,430		$	10.28	3,855,368		$	10.31

RSAs vested during the years ended December 31, 2016, 2015, and 2014 consisted entirely of time-based awards. RSUs vested during the year ended December 31, 2016 consisted of 31,396 performance-based awards and 599,071 time-based awards. RSUs vested during the year ended December 31, 2015 consisted of 67,893 performance-based awards and 437,132 time-based awards. RSUs vested during the year ended December 31, 2014 consisted of 30,946 performance-based awards and 510,942 time-based awards.

The total grant date fair value of RSAs vested during the years ended December 31, 2016, 2015, and 2014 was $0.2 million, $0.2 million, and $1.0 million, respectively. As of December 31, 2016, there was $0.1 million of total unrecognized share-based compensation expense related to non-vested restricted stock awards, all of which was related to time-based awards. As of December 31, 2016, unvested RSAs are expected to amortize over a remaining weighted average period of 0.43 years.

The total grant date fair value of RSUs vested during the years ended December 31, 2016, 2015, and 2014 was $8.0 million, $8.2 million and $9.6 million, respectively. As of December 31, 2016, there was $14.2 million of total unrecognized share-based compensation expense related to unvested restricted stock units, of which $2.6 million is related to performance-based awards and $11.6 million is related to time-based awards. As of December 31, 2016, unvested RSUs are expected to amortize over a remaining weighted average period of 1.63 years, which consists of a remaining weighted average period of 1.56 years related to performance-based awards and a remaining weighted average period of 1.71 years related to time-based awards.

Share-based Compensation Expense

During the years ended December 31, 2016, 2015, and 2014, the Company recorded $10.7 million, $11.2 million, and $12.7 million, respectively, of pre-tax share-based compensation expense, of which $0.5 million, $0.5 million and $0.8 million is reported within 'Cost of sales', and $10.2 million, $10.7 million and $11.8 million, respectively in 'Selling, general and administrative expense in the consolidated statements of operations. During 2014, $0.2 million of share compensation cost related to the Company's enterprise resource planning system was included in capitalized software cost.