12. STOCK-BASED COMPENSATION

We compensate officers, directors, key employees and consultants with stock-based compensation under our stock option and incentive plans (the "Plans") approved by our shareholders and administered under the supervision of our Board of Directors. Stock option awards are granted at exercise prices equal to the closing price of our stock on the day before the date of grant. Generally, options vest proportionally over periods of three to five years from the dates of grant, beginning one year from the date of grant, and have a contractual term of nine to ten years.

Performance stock options are time based; however, the final number of awards earned and the related compensation expense are adjusted up or down to the extent the performance target is met. The actual number of shares that will ultimately vest ranges from 90% to 100% of the targeted amount if the minimum performance target is achieved. We evaluate the likelihood of meeting the performance target at each reporting period and adjust compensation expense, on a cumulative basis, based on the expected achievement of each performance target.

Compensation expense, net of estimated forfeitures, is recognized ratably over the vesting period. Stock-based compensation expense included in general and administrative expense for the years ended December 31, 2017 and 2016 was $301,000 and $247,000, respectively. At December 31, 2017, 190,913 shares were available for grant under the Company's stock option and incentive plan.

Stock Options

The following table summarizes stock option activity for 2017 and 2016:

	2017				2016
	Shares		WAEP*		Shares		WAEP*
Options outstanding at beginning of year	132,500		$	6.15	307,750		$	5.96
Granted	—		$	—	—		$	—
Exercised	—		$	—	—		$	—
Expired	(22,000	)	$	8.26	(23,000	)	$	11.65
Forfeited	(24,750	)	$	5.55	(152,250	)	$	4.93

Options outstanding at end of year	85,750		$	5.78	132,500		$	6.15
Options eligible for exercise at year-end	79,875		$	5.90	112,500		$	6.41

*Weighted Average Exercise Price

Options outstanding at December 31, 2017 had a weighted average remaining contractual term of 4.0 years and had no aggregate intrinsic value. Options eligible for exercise at December 31, 2017 had a weighted average remaining contractual term of 3.9 years and had no aggregate intrinsic value.

There were no stock options exercised during the fiscal years ended December 31, 2017 and 2016.

At December 31, 2017, there was approximately $4,000 of total unrecognized stock option expense related to non-vested awards, which is expected to be recognized over a weighted average period of approximately 0.36 of a year.

The fair value of stock options granted under stock‑based compensation programs has been estimated as of the date of each grant using the multiple option form of the Black‑Scholes valuation model, based on the grant price and assumptions regarding the expected grant life, stock price volatility, dividends, and risk‑free interest rates. Each vesting period of an option award is valued separately, with this value being recognized evenly over the vesting period. No options were granted for the years ended December 31, 2017 and 2016.

Restricted Stock and Stock Awards

Restricted stock awards are granted under the Plan at the discretion of the Compensation Committee of our Board of Directors. We issue restricted stock awards to executive officers and key consultants. These awards may contain certain performance conditions or time-based vesting criteria. The restricted stock awards granted to executive officers vest if the various performance or time-based metrics are met. Stock-based compensation is recognized for the number of awards expected to vest at the end of the period and is expensed beginning on the grant date through the end of the vesting period. At the time of vesting, the recipients of common stock may request to receive a net of the number of shares required for employee withholding taxes, which can be withheld up to the relevant jurisdiction's maximum statutory rate. Stock awards granted to consultants are recognized over the performance period based on the stock price on the date when the consultant's performance is complete.

We also issue stock awards as a portion of the annual retainer for each director on a quarterly basis. The stock awards are fully vested at the time of issuance. Compensation expense related to stock awards is determined on the grant date based on the publicly-quoted fair market value of our common stock and is charged to earnings on the grant date.

The following table summarizes restricted stock award activity for 2017:

	2017
	Number of Shares		Weighted Average Grant Date Fair Value
Awards outstanding December 31, 2016	—		$	—
Granted	115,975		$	3.08
Vested	(83,975	)	$	3.13
Forfeited	—		$	—

Awards outstanding at December 31, 2017	32,000		$	2.95

As of December 31, 2017, the total stock-based compensation expense related to non-vested awards not yet recognized was $55,000, which is expected to be recognized over a weighted average period of 2.2 years. The weighted average grant date fair value of restricted stock units granted during 2017 was $3.08. We granted restricted stock awards of 115,975 shares during 2017. During the years ended December 31, 2017 and 2016, we recognized $283,000 and $225,000, respectively, of stock-based compensation expense related to restricted stock awards.