STOCK BASED COMPENSATION

The Company's 2011 Incentive Stock Plan (the "Plan"), as amended on May 6, 2014, permits the grant of several types of incentives, including share options, non-qualified stock options, stock appreciation rights, restricted stock awards/ units (“RSAs”) and performance share incentives (“PSIs”).

Stock Options

There were 255,000 non-qualified stock options granted in the nine months ended September 30, 2017. There are no other vested or unvested stock options outstanding. The fair market value of stock options is estimated using the Black-Scholes valuation model using the following assumptions:



	Nine Months Ended September 30, 2017
Expected volatility	37.0% - 38.5%
Expected dividend yield	0.0% - 0.66%
Risk free rate	1.32% - 1.97%
Expected term (in years)	6.0 - 6.5
Weighted average grant date fair value	$4.52
Weighted average exercise price	$12.05

Stock options vest over a two or three-year period based on either a service period or a combination of service period and performance measures. Deferred compensation for stock options is amortized on a straight-line basis for stock options which vest over a specified service period, and is recognized ratably for stock options, which also have a performance requirement to the extent that it is probable that the performance target will be met. All stock options granted have a ten-year contractual term.

The aggregate intrinsic value of stock options at September 30, 2017 was $0.8 million, which is calculated as the difference between the stock price as of September 30, 2017 and the exercise price of the option.

Restricted Stock/ Unit Awards ("RSAs")

There were 42,350 RSAs granted during the nine months ended September 30, 2017, and no awards in the same period of 2016. There were 6,850 RSAs forfeited during the nine months ended September 30, 2017. The deferred compensation for RSAs is amortized on a straight-line basis over the specified service period, which ranges from three to four years.

Performance Share Incentives ("PSIs")

There were 42,350 PSIs granted during the nine months ended September 30, 2017, and no awards in the same period of 2016. There were 8,161 PSIs forfeited during the nine months ended September 30, 2017. The deferred compensation with respect to the PSIs is being recognized into earnings based on the passage of time and achievement of performance targets.

Compensation Costs

Stock based compensation costs are based on estimated fair values. The fair value of service and performance based stock awards are based on the market value on the date of the grant. The fair value of stock options are estimated using a Black-Scholes valuation model. All stock based compensation to employees is recorded as "Selling, general and administrative expenses" in the Consolidated Statements of Operations. These non-cash compensation costs are included in the depreciation and amortization amounts in the Consolidated Statements of Cash Flows.

A summary of stock based compensation expense is as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Stock Options	$	103	$	—	$	135	$	—
Restricted stock/unit awards (“RSA”)	57		67		164		190
Performance share incentives (“PSI”)	28		—		67		—
Total stock based compensation	$	188	$	67	$	366	$	190

Unrecognized compensation and the expected weighted-average recognition periods with respect to the outstanding RSAs and PSIs as of September 30, 2017 and December 31, 2016, are as follows:



	September 30, 2017						December 31, 2016
	Stock Options		RSAs		PSIs		Stock Options		RSAs		PSIs
Unrecognized compensation cost (in thousands)	$	1,019	$	335	$	818	$	—	$	113	$	520
Expected weighted-average recognition period for unrecognized compensation cost (in years)	2.44		1.30		1.20		N/A		0.92		0.97