NOTE 11 STOCK BASED COMPENSATION

Stock Options

The Company’s Amended and Restated Equity Incentive Plan (“Plan”) allows for equity awards to be granted to employees, consultants, advisors, and directors. The Plan is administered by the Compensation Committee of the Board of Directors (“Committee”), which determines the terms pursuant to which any award is granted. The Committee may delegate to certain officers the authority to grant awards to certain employees (other than such officers), consultants and advisors. The number of shares of common stock reserved for issuance thereunder is 17.5 million shares, including shares issued under the Plan before it was amended, with no more than 1 million shares subject to grants of options to an individual in a calendar year. The Plan also provides for the grant of incentive options under Section 422 of the Internal Revenue Code (the “Code”), which provide potential tax benefits to the recipients compared to non-qualified options. At December 31, 2018, 5,776,483 awards were authorized and available for issuance under the Plan (December 31, 2017 – 5,283,137 awards).

During the year ended December 31, 2018, 171,000 shares of common stock (December 31, 2017 – 94,000) were issued upon exercise of stock options under the Plan, at a weighted average exercise price of $1.02 (2017 – $1.30) per share for proceeds of $0.2 million (2017 – $0.1 million).

The following table summarizes information about stock options under the Plan outstanding at December 31, 2018:


				Weighted
		Weighted		Average
		Average		Remaining
	Number of	Exercise		Contractual	Intrinsic
	Shares	Price		Life (Years)	Value
	(in thousands, except per share and year data)
Balance at December 31, 2015	6,954	$	2.49	4.1	$	98
Granted	645		3.99	—		—
Exercised	(1,457)		2.48	—		1,601
Forfeited	(1,422)		3.45	—		—
Expired	—		—	—		—
Balance at December 31, 2016	4,720	$	2.41	3.4	$	4,388
Granted	338		2.99	—		—
Exercised	(94)		1.30	—		87
Forfeited	(37)		4.28	—		—
Expired	(21)		5.00	—		—
Balance at December 31, 2017	4,906	$	2.45	2.6	$	2,564
Granted	375		1.90	—		—
Exercised	(171)		1.02	—		195
Forfeited	(405)		3.99	—		—
Expired	(462)		2.27	—		—
Balance at December 31, 2018	4,243	$	2.33	2.0	$	1,475
Exercisable at December 31, 2018	3,552	$	2.28	1.6	$	1,475

Stock options have been granted to key employees, directors and consultants under the Plan. Options to purchase shares under the Plan were granted at or above market value as of the date of the grant. During the year ended December 31, 2018, the Company granted stock options to certain employees and directors for an aggregate of 0.4 million shares of common stock (2017 – 0.3 million, 2016 – 0.6 million) at a weighted average exercise price of $1.90 per share (2017 – $2.99, 2016 – $3.99). The options vest equally over a three-year period if the individuals remain affiliated with the Company (subject to acceleration of vesting in certain events) and are exercisable for a period of 5 years from the date of grant.

The fair value of the options granted under the Plan was estimated at the date of grant, using the Black-Scholes option-pricing model, with the following weighted-average assumptions:


		2018		2017		2016
Risk-free interest rate		2.67% to 2.89%		1.46% to 1.60%		1.13% to 1.21%
Dividend yield		0.36% to 0.53%		0.31% to 0.36%		0.24% to 0.27%
Volatility factor of the expected market price of common stock		63% to 64%		72% to 74%		74%
Weighted-average expected life of option		3.5 years		3.5 years		5.0 years
Weighted-average grant date fair value	$	1.90	$	2.99	$	2.36

During the year ended December 31, 2018, the Company recorded stock option expense of $0.3 million (2017 -$1.3 million, 2016 – $1.0 million) while the corresponding fair value of awards vesting in the period was $0.7 million (2017 – $1.3 million and 2016 – $1.3 million).

At December 31, 2018, there was $0.4 million (2017 – $0.7 million, 2016 - $1.4 million) of unrecognized compensation expense related to 0.7 million (2017 – 1.5 million, 2016 – 2.5 million) unvested stock options outstanding. This cost is expected to be recognized over a weighted-average period of approximately 1.4 years (2017 – 1.3 years, 2016 – 1.6 years).

The following table summarizes the status and activity of non-vested stock options for the year ended December 31, 2018, for the Company’s Plan and the replacement options from the acquisition of Lexam (see Note 19 Acquisitions):


		Weighted
		Average
	Number of	Grant Date
	Shares	Fair Value
	(in thousands, except per share amounts)
Non-vested, beginning of year	1,479	$	1.24
Granted	375	$	0.88
Cancelled/Forfeited	(248)	$	2.25
Vested	(915)	$	0.80
Non-vested, end of year	691	$	1.28