14.	SHARE-BASED COMPENSATION

The Company has an equity compensation program (the "Program") which provides for the granting of "Incentive Stock Options" within the meaning of Section

422

of the Internal Revenue Code of

1986,

as amended, non-qualified stock options and restricted stock awards. The Company believes that such awards better align the interest of its employees with those of its shareholders. The

2011

Equity Compensation Plan provides for the issuance of

1.4

million shares of the Company's Class B common stock. At

December 31, 2019

323,850

shares remained available for future issuance under the

2011

Equity Compensation Plan.

The Company records compensation expense in its consolidated statements of operations related to employee stock-based options and awards. The aggregate pretax compensation cost recognized for stock-based compensation amounted to approximately

$2.9

million and

$2.8

million for

2019

and

2018

, respectively, and related solely to restricted stock awards. The Company did

not

use any cash to settle any equity instruments granted under share-based arrangements during

2019

and

2018

. At

December 31, 2019

and

2018

, the only instruments issued and outstanding under the Program related to restricted stock awards.

Restricted Stock Awards

The Company provides common stock awards to certain officers, directors and key employees. The Company grants these awards, at its discretion, from the shares available under the Program. Unless otherwise provided at the date of grant or unless subsequently accelerated, the shares awarded are typically earned in

25%

increments on the second, third,

fourth

and

fifth

anniversaries of the award and are distributed provided the employee has remained employed by the Company through such anniversary dates; otherwise the unearned shares are forfeited. The market value of these shares at the date of award is recorded as compensation expense on the straight-line method over the applicable vesting period from the respective award dates, as adjusted for forfeitures of unvested awards. During

2019

and

2018

, the Company issued

70,000

shares and

262,000

shares of the Company's Class B common stock, respectively, under a restricted stock plan to various officers, directors and employees.

A summary of the restricted stock activity under the Program for the year ended

December 31, 2019

is presented below:

					Weighted Average
Restricted Stock			Weighted Average		Remaining
Awards	Shares		Award Price		Contractual Term (Years)

Outstanding at January 1, 2019		527,900	$	24.37		3.5 years
Granted		70,000		20.80
Vested		117,850		23.58
Forfeited		34,750		25.06
Outstanding at December 31, 2019		445,300	$	23.96		3.4 years

As of

December 31, 2019

, there was

$6.8

million of total pretax unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the restricted stock award plan. That cost is expected to be recognized over a period of

4.4

years. This expense is recorded in cost of sales and SG&A expense based upon the employment classification of the award recipients.

The Company's policy is to issue new shares to satisfy restricted stock awards. Currently the Company believes that the majority of its restricted stock awards will vest.