STOCK INCENTIVE PLANS AND SHARE-BASED COMPENSATION

ATRM uses the fair value method to measure and recognize share-based compensation. We determine the fair value of stock options on the grant date using the Black-Scholes option valuation model. We determine the fair value of restricted stock awards based on the quoted market price of our common stock on the grant date. We recognize the compensation expense for stock options and restricted stock awards on a straight-line basis over the vesting period of the applicable awards.

2014 Incentive Plan

The Company has a stock incentive plan that was approved by the Board and became effective on December 4, 2014 (the “2014 Plan”), upon approval by shareholders. The 2014 Plan is administered by the Compensation Committee of the Board. The purpose of the 2014 Plan is to provide employees, consultants and Board members the opportunity to acquire an equity interest in the Company through the issuance of various stock-based awards such as stock options and restricted stock.

Under the 2014 Plan, prior to January 1, 2016, 60,000 restricted shares of the Company’s common stock were granted to its directors and its then Chief Financial Officer. The shares vested one year after the grant date and the fair value of the awards was determined to be $4.48 per share, the closing price of our common stock on the grant date. Compensation expense related to these grants amounted to approximately $115.0 thousand for the twelve months ended December 31, 2016 and is included in the caption “Selling, general and administrative expenses” in our Consolidated Statement of Operations.

On October 19, 2016, ATRM granted 30,000 restricted shares of the Company’s common stock to its Chief Executive Officer, Chief Financial Officer and former Chief Financial Officer (10,000 shares each). The shares vest one year after the grant date and the fair value of the awards was determined to be $2.25 per share, the closing price of our common stock on the grant date. Compensation expense related to these grants amounted to approximately $13.7 thousand and $53.8 thousand for the twelve months ended December 31, 2016 and 2017, respectively, and is included in the caption “Selling, general and administrative expenses” in our Consolidated Statement of Operations.

On December 18, 2017, ATRM granted 70,000 shares of the Company's common stock to its directors and its Chief Financial Officer (10,000 shares each). The shares vest one year after the grant date and the fair value of the awards was determined to be $1.18 per share, the closing price of our common stock on the grant date. Compensation expense related to these grants amounted to approximately $3.1 thousand for the twelve months ended December 31, 2017, and is included in the caption "Selling, general and administrative expenses" in our Consolidated Statement of Operations. The remaining compensation expense of approximately $79.4 thousand will be recognized on a straight-line basis through December 18, 2018, subject to forfeitures.

2003 Stock Incentive Plan

A stock incentive plan approved by our shareholders and adopted in May 2003 (the “2003 Plan”) terminated in February 2013. Stock options granted under the 2003 Plan continue to be exercisable according to their individual terms. The following table summarizes stock option activity under the 2003 Plan for the twelve months ended December 31, 2017:



	Number Of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contract Term	Aggregate Intrinsic Value (in thousands)
Outstanding January 1, 2017	27,500		$	6.88
Expired	(27,500	)	$	6.88
Outstanding December 31, 2017	—		$	—		$	—
Exercisable December 31, 2017	—		$	—		$	—

All stock options outstanding as of January 1, 2017 had expired unexercised as of December 31, 2017. The aggregate intrinsic values in the table above are zero because the option exercise prices for all outstanding options exceeded ATRM’s closing stock price on December 31, 2017.