Share-Based Compensation

Stock Options—The Company accounts for compensation expense associated with stock options issued to employees, Directors, and non-employees based on their fair value, which is calculated using an option pricing model, and is recognized over the service period, which is usually the vesting period. At December 31, 2017, the Company had one equity based compensation plan. No stock options were granted to employees or non-employees during 2017, 2016 and 2015; however, options were granted to Directors in 2017 and 2015. Stock compensation expense of $433 thousand, $340 thousand and $294 thousand was recognized during the years ending December 31, 2017, 2016 and 2015, respectively, on outstanding and unvested options.

The fair value of options granted during 2017 is estimated on the date of grant using the Black-Scholes option pricing model. The following table includes the weighted- average assumptions used in estimating the fair values and the resulting weighted-average fair value of stock options granted in the periods presented:



	Year Ended December 31, 2017			Year Ended December 31, 2016			Year Ended December 31, 2015
Weighted average fair values of stock options granted	$	15.38		$	19.50		$	7.90
Expected volatility	37.9		%	55.5		%	55.4		%
Expected dividends	.56		%	.61		%	1.42		%
Weighted average risk-free interest rate	1.64		%	1.40		%	1.03		%
Expected life of stock options (in years)	3.5			3.5			3.5

A summary of stock option activity for the years ended December 31, 2017, 2016 and 2015 is as follows:



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
						(in thousands)
Outstanding at January 1, 2015	207,000		$	16.41	1.88	$	121
Granted	42,000		$	22.25
Exercised	(109,122	)	$	20.25
Canceled	—
Outstanding at December 31, 2015	139,878		$	15.17	2.32	$	2,465
Granted	42,000		$	49.22
Exercised	(72,379	)	$	11.38
Canceled	—
Outstanding at December 31, 2016	109,499		$	30.73	3.28	$	2,882
Granted	42,000		$	53.90
Exercised	(3,500	)	$	14.90
Canceled	—
Outstanding at December 31, 2017	147,999		$	37.68	2.94	$	6,152
Exercisable at December 31, 2017	71,499		$	26.65	2.02	$	3,761

The aggregate intrinsic value for stock options outstanding and exercisable is defined as the difference between the market value of the Company’s stock as of the end of the period and the exercise price of the stock options. The total intrinsic value of stock options exercised during 2017, 2016 and 2015 was $169 thousand, $3.2 million, and $1.3 million, respectively.

Cash received or the value of stocks canceled from option exercises under all share-based payment arrangements for the years ended December 31, 2017, 2016 and 2015, was $52 thousand, $824 thousand and $2.2 million, respectively.

A summary of non-vested options and changes for the years ended December 31, 2017, 2016 and 2015 is as follows:



	Non-Vested Number of Shares		Weighted Average Exercise Price

Non-vested balance at January 1, 2015	67,500		$	16.52
Granted	42,000		$	22.25
Vested	(33,750	)	$	17.47
Canceled	—		$	—
Non-vested balance at December 31, 2015	75,750		$	19.27
Granted	42,000		$	49.22
Vested	(43,125	)	$	18.89
Canceled	—		$	—
Non-vested balance at December 31, 2016	74,625		$	36.35
Granted	42,000		$	53.90
Vested	(40,125	)	$	32.54
Canceled	—		$	—
Non-vested balance at December 31, 2017	76,500		$	47.99

The following table summarizes information about stock options outstanding by price range as of December 31, 2017:



	Options Outstanding				Options Exercisable
Exercise Prices	Number Outstanding	Weighted-Average Remaining Contractual Life (Years)	Weighted-Average Exercise Price		Number of Shares	Weighted-Average Exercise Price
$14.89	24,624	0.17	$	2.48	24,624	$	5.13
$21.19	33,375	0.46	$	4.78	24,375	$	7.22
$28.59	6,000	0.09	$	1.16	4,125	$	1.65
$49.22	42,000	0.95	$	13.97	18,375	$	12.65
$53.90	42,000	1.28	$	15.29	—	$	—
	147,999	2.94	$	37.68	71,499	$	26.65

Restricted Stock—Pursuant to the Company’s restricted stock agreements, the restricted stock granted generally vests as follows: one third after one year, and the remaining in eight equal quarterly installments. The restricted stock also vests with respect to any unvested shares upon the applicable employee’s death, disability or retirement, the Company’s termination of the employee other than for cause, or for a change in control of the Company. A summary of the status of the Company’s non-vested restricted stock grant shares is presented in the following table:



	Shares		Weighted-Average Grant Date Fair Value
Non vested at January 1, 2015	188,522		$	17.13
Granted	132,069		$	30.29
Vested	(108,798	)	$	17.35
Forfeited	(8,479	)	$	17.20
Non vested at December 31, 2015	203,314		$	25.56
Granted	26,119		$	44.79
Vested	(101,441	)	$	23.25
Forfeited	(4,338	)	$	35.54
Non vested at December 31, 2016	123,654		$	31.17
Granted	56,251		$	56.75
Vested	(72,810	)	$	29.50
Forfeited	—		$	—
Non vested at December 31, 2017	107,095		$	45.74

As of December 31, 2017 there was $4.2 million of total unrecognized compensation cost related to non-vested share based compensation arrangements granted under the 2006 and 2010 Incentive Compensation Program. That cost is expected to be recognized over a weighted-average period of 2.00 years. The total fair value of shares vested during the years ended December 31, 2017, 2016 and 2015 was $2.1 million, $2.4 million, and $1.9 million, respectively.

In the aggregate the total compensation expense recognized in connection with the restricted grants was $2.4 million, $2.5 million and $1.5 million during each of the years ending December 31, 2017, 2016 and 2015, respectively.

As of December 31, 2017 the Company has 5.4 million shares of common stock reserved for possible future stock option and restricted stock grants.