Stock-Based Compensation

The Compensation Committee of the Company’s Board of Directors is responsible for the administration of the Company’s stock incentive plans, which include the balance of shares remaining under the 2011 Long Term Incentive Plan (the "2011 LTIP") and 2017 Long Term Incentive Plan (the "2017 LTIP"), which was approved by shareholders in May 2017 and authorized the maximum aggregate number of shares to be issued of 2,400,000. In general, the Company's 2017 LTIP provides for grants of restricted stock and stock options to be issued with a per-share price equal to the fair market value of a share of common stock on the date of grant. Option terms are specified at each grant date, but are generally are 10 years from the date of issuance. Options generally vest over a three year period.

Restricted Stock

The following table summarizes the restricted stock activity under the Company's equity incentive plans :



	Number of Shares		Weighted Average Fair Value Per Share
Nonvested at January 1, 2015	235,863		$	8.63
Granted	38,660		$	5.82
Vested	(134,545	)	$	6.84
Forfeited/repurchased shares	(19,824	)	$	11.35
Nonvested at December 31, 2015	120,154		$	9.28
Granted	407,002		$	4.96
Vested	(147,259	)	$	6.62
Forfeited/repurchased shares	(7,591	)	$	7.08
Nonvested at December 31, 2016	372,306		$	5.66
Granted	345,913		$	7.22
Vested	(225,406	)	$	7.25
Forfeited/repurchased shares	(120,353	)	$	6.08
Nonvested at December 31, 2017	372,460		$	6.01

Independent directors receive equity compensation in the form of grants. In May 2017, the Company's independent directors each received equity compensation grants of 12,465 shares, with a fair value of $7.22 per share and in May 2016, the Company's independent directors each received equity compensation grants of 14,170 shares, with a fair value of $4.94 per share. Additionally, in 2017, certain officers and executives of the Company were awarded 213,643 shares with a vesting period of three years and a weighted average fair value of $7.22 per share and in 2016, certain officers and executives of the Company were awarded 267,175 shares with a vesting period of three years and a weighted average fair value of $4.96 per share. No shares were granted to independent directors, officers or executives of the Company during 2015, except for the chief operating officer who joined the Company in September 2015. Upon execution of his employment agreement, he was awarded 38,660 shares, with a vesting period of three years and a fair value of $5.82 per share.

Performance Stock

In May 2017, the Company awarded certain executives 69,945 shares of performance based stock, which vest based on the achievement of an objective return on invested capital measured over a two-year performance period covering the 2018 and 2019 fiscal years. The fair value on the date of grant was $7.22 per share. In May 2016, the Company awarded certain executives 68,977 shares of performance based stock, which vest based on the achievement of an objective return on invested capital measured over a two-year performance period covering the 2017 and 2018 fiscal years. The fair value on the date of the grant was $4.94 per share.

Stock Options

The following table summarizes the stock option activity under the Company's equity incentive plans:



	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2015	2,056,898		$	9.86
Granted	143,862		$	5.82
Exercised	(3,970	)	$	6.00
Forfeited	(46,890	)	$	11.72
Outstanding at December 31, 2015	2,149,900		$	9.56
Granted	587,862		$	4.98
Exercised	(13,850	)	$	4.86
Forfeited	(374,466	)	$	9.89
Outstanding at December 31, 2016	2,349,446		$	8.39
Granted	425,204		$	7.22
Exercised	(229,551	)	$	5.75
Forfeited	(633,978	)	$	10.36
Outstanding at December 31, 2017	1,911,121		$	7.79

Vested and expected to vest at December 31, 2017	2,024,130		$	7.69	5.26	$	2,872
Exercisable at December 31, 2017	1,462,481		$	8.18	3.82	$	2,054

The Company calculates the fair value of each option on the date of grant using the Black-Scholes pricing model and the following weighted-average assumptions in each year:



	2017			2016			2015
Weighted average grant-date fair value of options granted	$	7.22		$	4.97		$	5.82
Risk-free interest rate	1.46		%	1.06		%	0.97		%
Expected volatility	48		%	49		%	38		%
Expected term of options (in years)	3.0			3.0			3.0
Dividend yield	—		%	—		%	—		%

The risk-free interest rate is based on interest rates on U.S. Treasury zero-coupon issues that match the contractual terms of the stock option grants. The expected term represents the period in which the Company’s equity awards are expected to be outstanding, which for the years presented is based on the exercise history.

For years ended December 31, 2017, 2016 and 2015, compensation expense related to stock based awards outstanding for the periods was $2.3 million, respectively. The Company applies a 3.2% and 5.5% forfeiture rate, which gets compounded over the vesting terms of the individual award, to its restricted stock and option grants, respectively, based on historical analysis.

During the year ended December 31, 2017, certain officers and executives of the Company were awarded 425,204 options with a vesting period of three years and a weighted average fair value of $7.22 per share, and for the year ended December 31, 2016, certain officers and executives were awarded 587,862 options with a vesting period of three years and a fair value of $4.98 per share. No options were awarded to officers or executives of the Company as of the year ended December 31, 2015, except for the chief operating officer who joined the Company in September 2015. Upon execution of his employment agreement, he was granted 143,862 shares, with a vesting period of three years and a fair value of $5.82 per share.

In the year ended December 31, 2017, the Company received proceeds of approximately $1.3 million upon the exercise of 229,551 options. In the year ended December 31, 2016, proceeds of $67,000 upon the exercise of 13,850 options and in the year ended December 31, 2015, 3,970 options were exercised, generating proceeds of $28,000.

As of December 31, 2017, total unrecognized compensation expense related to unvested stock and options was approximately $2.9 million, which is expected to be recognized over a period of approximately 2.0 years.



	2017		2016		2015
Total intrinsic value of options exercised	$	706	$	53	$	17
Total fair value of shares vested	$	855	$	986	$	1,226