16.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 to five year period.

Restricted Stock

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


		Weighted
	Number	Average
	of	Fair Value
	Shares	Per Share
Nonvested at January 1, 2017	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
Granted	333,864	$	7.47
Vested	(217,244)	$	6.61
Forfeited/repurchased shares	(71,139)	$	6.85
Nonvested at December 31, 2018	417,941	$	7.04
Granted	757,012	$	2.52
Vested	(585,754)	$	3.74
Forfeited/repurchased shares	(72,627)	$	6.05
Nonvested at December 31, 2019	516,572	$	4.29

Independent directors receive equity compensation in the form of grants. In January 2019, two new independent directors each received equity compensation grants of 8,427 shares, with a fair value of $4.45 per share. In May 2019, the Company’s independent directors each received equity compensation grants of 45,918 shares, with a fair value of $1.96 per share. In October 2019, a new independent director received an equity compensation grant of 14,218 shares, with a fair value of $4.22 per share. In May 2018, the Company’s independent directors each received equity compensation grants of 12,064 shares, with a fair value of $7.46 per share. 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.

In March 2019, the Company granted an executive of the Company 168,350 shares of restricted common stock, which vested one-third at March 31, June 30, and September 30, 2019, respectively. The fair value of all shares awarded on the date of the grant was $2.97 per share. In May 2019, certain officers and executives of the Company were awarded 62,500 shares with a vesting period of three years and a fair value of $1.96 per share. In July 2019, certain officers and executives of the Company were awarded 46,500 shares with a vesting period of three years and a fair value of $3.66. In December 2019, certain officers and executives of the Company were awarded 31,500 shares with a vesting period of three years and a fair value of $5.08 per share. In May 2018, certain officers and executives of the Company were awarded 203,752 shares with a vesting period of three years and a fair value of $7.46 per share. In July 2018 an executive was awarded 2,769 shares of restricted common stock with a fair value of $9.03 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.

Performance Stock

In May 2019, the Company awarded certain executives 187,500 shares of performance stock. The performance-based stock will potentially vest 50% if the target is met, with 25% each vesting on the second and third anniversary of the grant, with 100% of the shares to be earned based on the achievement of an objective, tiered return on invested capital, measured over a one-year performance period. The Company evaluates the probability of achieving this each reporting period. The fair value of all shares awarded on the date of the grant was $1.96 per share. In May 2018, the Company awarded certain executives 67,023 shares of performance based stock, which will potentially vest at the end of fiscal 2021, with 100% of the shares to be earned based on the achievement of an objective, tiered return on invested capital measured over a three-year performance period. The Company evaluates the probability of achieving this each reporting period. The fair value of all shares awarded on the date of the grant was $7.46 per share. 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.

Stock Options

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


		Weighted		Weighted
		Average		Average
	Number	Exercise		Contractual	Aggregate
	of	Price		Life	Intrinsic
	Shares	Per Share		(Years)	Value
Outstanding at January 1, 2017	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
Granted	374,215	$	7.49
Exercised	(488,303)	$	5.76
Forfeited	(132,252)	$	7.89
Outstanding at December 31, 2018	1,664,781	$	8.31
Granted	—	$	—
Exercised	(7,021)	$	4.94
Forfeited	(192,994)	$	15.26
Outstanding at December 31, 2019	1,464,766	$	7.41

Vested and expected to vest at December 31, 2019	1,460,181	$	7.41	4.78	$	91
Exercisable at December 31, 2019	1,293,830	$	7.41	4.34	$	91

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:


	2018			2017
Weighted average grant-date fair value of options granted	$	2.78		$	7.22
Risk-free interest rate		2.65	%		1.46	%
Expected volatility		52	%		48	%
Expected term of options (in years)		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, 2019, 2018 and 2017, compensation expense related to stock based awards outstanding for the periods was $2.8 million, $2.2 million and $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, 2018, certain officers and executives of the Company were awarded 374,215 options with a vesting period of three years and a weighted average exercise price of $7.49 per share. 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 exercise price of $7.22 per share.

In the year ended December 31, 2019, the Company received proceeds of less than $0.1 million upon the exercise of 7,021 options. In the year ended December 31, 2018, the Company received proceeds of approximately $2.8 million upon the exercise of 488,303 options. In the year ended December 31, 2017, the Company received proceeds of $1.3 million upon the exercise of 229,551 options.

As of December 31, 2019, total unrecognized compensation expense related to unvested stock and options was approximately $2.0 million, which is expected to be recognized over a period of approximately 1.5 years.


	2019		2018		2017
Total intrinsic value of options exercised	$	—	$	1,286	$	706
Total fair value of shares vested	$	769	$	705	$	855