The Company issues shares pursuant to the 2007 Stock Incentive Plan (the “2007 Plan”), a shareholder approved plan, which provides for the grant of stock incentive awards in the form of incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units and other awards in stock to certain key employees, non-employee directors and service providers. The exercise price of stock options granted under the 2007 Plan is equal to the market value on the date of grant. With the exception of the awards described in the following paragraph, the stock options, restricted stock awards and restricted stock units granted during the year ended December 31, 2020 and 2019 were granted under the 2007 Plan.

In addition to awards granted under the 2007 Plan, the Company granted a non-qualified option to purchase 457,692 shares of its common stock to a newly hired chief executive officer on July 22, 2020, which was the first date of an open window period following the first day of employment. The option was granted outside of any shareholder-approved plan as an inducement to accept employment with the Company. The option has an exercise price equal to the closing price of the Company’s common stock as reported by the Nasdaq Stock Market on the grant date, vest in three equal installments on each of the first three anniversaries of the date of grant and has a term of seven years. In other respects, the option was structured to mirror the terms of the options granted under the 2007 Plan and are subject to a stock option agreement between the Company and the employee.

During the year ended December 31, 2020, the Company's shareholders approved an amendment to the 2007 Plan to increase the number of shares authorized under the plan by 500,000 to a total of 3,730,320 shares, of which 640,205 were available for future grant.


	Year Ended December 31,
	2020		2019		2018
Stock-based compensation cost charged against loss, before income tax benefit
Stock options	$	424	$	331	$	326
Restricted stock and restricted stock units	754		521		566
Performance stock units	—		5		190
Total stock-based compensation costs	$	1,178	$	857	$	1,082
Stock-based compensation cost included in:
Cost of revenues	$	36	$	26	$	34
Operating expenses	1,142		831		1,048
Total stock-based compensation costs	$	1,178	$	857	$	1,082

As of December 31, 2020, compensation expense of $1.9 million related to non-vested option awards was not yet recognized and is expected to be recognized over a weighted-average period of 2.8 years. As of December 31, 2020, compensation expense of $1.9 million related to non-vested shares and restricted share unit awards was not yet recognized and is expected to be recognized over a weighted-average period 2.9 years.

The fair value of each option award is estimated at the date of grant using the Black-Scholes option pricing model. The assumptions used to determine the fair value of stock option awards granted were as follows:


	Year Ended December 31,
	2020	2019	2018
Expected life of options in years	4.50 - 4.75	4.70 - 4.75	4.54 - 4.75
Risk-free interest rate	0.2% - 0.4%	1.8% - 2.5%	2.6% - 2.9%
Expected volatility	75.3% - 76.3%	69.7% - 73.6%	69.6% - 70.5%
Expected dividend yield	—%	—%	—%

The Company reviews these assumptions at the time of each new option award and adjusts them as necessary to ensure proper option valuation. The expected life represents the period that the stock option awards are expected to be outstanding. The Company has concluded that its stock option exercise history does not provide a reasonable basis upon which to estimate expected term, and therefore it uses the simplified method for determining the expected life of stock options granted to employees in 2020, 2019 and 2018, which bases the expected life calculation on the average of the vesting term and the contractual term of the awards. The risk-free interest rate is based on the yield of constant maturity U.S. treasury bonds with a remaining term equal to the expected life of the awards. The Company estimated the stock price volatility using weekly price observations over the most recent historical period equal to the expected life of the awards.


(In thousands, except per share data)	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value(1)
Options outstanding at December 31, 2017	1,288	$	6.18
Granted	758	2.24
Exercised	—	—
Canceled	(604)	7.60
Options outstanding at December 31, 2018	1,442	3.51
Granted	39	3.11
Exercised	(40)	2.55
Canceled	(381)	5.20
Options outstanding at December 31, 2019	1,060	2.93
Granted	658	4.90
Exercised	(295)	2.63
Canceled	(158)	4.31
Options outstanding at December 31, 2020	1,265	3.85		2.9	$	5,317
Total vested and expected to vest as of December 31, 2020	1,265	3.85		2.9	$	5,317
Options exercisable as of:
December 31, 2018	572	$	5.29
December 31, 2019	540	3.51
December 31, 2020	394	2.96		3.5	$	2,069


	Year Ended December 31,
	2020		2019		2018
Fair value of options granted	$	1,891	$	71	$	982
Per share weighted average fair value of options granted	$	2.87	$	1.83	$	1.30
Total intrinsic value of stock options exercised	$	707	$	55	$	—

Restricted stock and restricted stock units are valued based on the market value of the Company’s shares on the date of grant, which was equal to the intrinsic value of the shares on that date. These awards vest and the restrictions lapse over varying periods from the date of grant. The Company recognizes compensation expense for the intrinsic value of the restricted awards ratably over the vesting period.


	Number of Shares	Weighted Average Grant-Date Fair Value
Nonvested at December 31, 2017	218	$	3.87
Granted	279	2.17
Vested	(186)	3.66
Canceled	(3)	14.78
Nonvested at December 31, 2018	308	2.38
Granted	230	3.16
Vested	(198)	2.53
Canceled	(31)	2.25
Nonvested at December 31, 2019	309	2.87
Granted	577	4.50
Vested	(244)	2.23
Canceled	(114)	3.22
Nonvested at December 31, 2020	528	$	4.52


	Year Ended December 31,
	2020		2019		2018
Per share weighted average grant-date fair value of restricted stock and restricted stock units granted	$	4.50	$	3.16	$	2.17
Total fair value of restricted stock and restricted stock units vested	$	903	$	749	$	377

The Company granted performance stock units during 2018 ("2018 Performance Stock Units") and 2017 ("2017 Performance Stock Units"). In settlement of the performance stock units, the Company issues a number of shares equal to the number of performance stock units issued multiplied by the total percentage achievement of the performance goals for each award. The percentage achievement for the performance stock units may not exceed 100%.


	Number of Units
	2018 Performance Stock Units	2017 Performance Stock Units	Total Performance Stock Units
Nonvested at December 31, 2017	—	140	140
Granted	169	—	169
Vested	—	(116)	(116)
Canceled	(21)	(24)	(45)
Nonvested at December 31, 2018	148	—	148
Granted	—	—	—
Vested	(98)	—	(98)
Canceled	(9)	—	(9)
Nonvested at December 31, 2019	41	—	41
Granted	—	—	—
Vested	—	—	—
Canceled	(41)	—	(41)
Nonvested at December 31, 2020	—	—	—

In settlement of vested performance stock units granted in 2018, during the year ended December 31, 2019 the Company issued 98,492 shares of restricted stock, which was equal to the number of vested 2018 performance stock units multiplied by the performance goals achievement of 100%. At December 31, 2019, there were 40,599 shares of common stock underlying the outstanding 2018 performance stock units that were subject to vesting upon the achievement of performance goals for the performance period of January 1, 2019 to December 31, 2019. The outstanding unvested 2018 performance stock units were canceled on February 10, 2020 upon determination by the Compensation Committee of the Company's Board of Directors that

The 2017 Performance Stock Units consisted of 140,493 units outstanding as of December 31, 2017, of which 116,168 vested during 2018. In settlement of the vested 2017 Performance Stock Units, during 2018 the Company issued 25,726 shares upon vesting, which was equal to the number of 2017 Performance Stock Units vested multiplied by the weighted percentage achievement of the performance goals for the 2017 Incentive Plan of approximately 22.1%. With the vesting and settlement of the 2017 Performance Stock Units in shares, the 2017 Performance Stock Units terminated.