17. Stock-Based Compensation

Long-term incentive plan

During 1995, the Company established the 1995 Long-Term Incentive Stock Option Plan (the Plan), which permits the granting of stock options (including incentive stock options and nonqualified stock options) stock appreciation rights, restricted or unrestricted stock awards, phantom stock, performance awards or any combination of these to employees, directors or consultants. The Plan expires on April 21, 2026; the total number of shares that could be issued under the Plan is 7,500,000. As of December 31, 2019, 4,174,981 shares have been issued under the Plan, 5,000 stock options and 1,951,208 restricted stock units (RSUs) were outstanding under the Plan, while 1,599,241 shares remain for future grants under the Plan.

The Company recognizes compensation expense on a pro rata straight-line basis over the requisite service period for stock-based compensation awards with both graded and cliff vesting terms. The Company recognizes the cumulative effect of a change in the number of awards expected to vest in compensation expense in the period of change. The Company has not capitalized any portion of its stock-based compensation. The Company’s forfeiture rate is based on actuals.

During the years ended December 31, 2019 and 2018, the Company recognized $1.4 million and $1.5 million, respectively, of stock-based compensation expense under the fair value method. Accordingly, the Company recognized associated deferred income tax expense (benefits) of $86,000 and $(53,000), respectively, during the years ended December 31, 2019 and 2018. During the years ended December 31, 2019 and 2018, there were approximately $93,000 and $142,000 of stock-based compensation expense related to the change in fair value of cash-settled RSUs, which the Company accounts for as a liability.

Stock options

Options to purchase shares of the Company’s common stock under the Plan expire in either seven years or ten years from the date of grant and become exercisable in three, five, or seven installments with a certain percentage of options vesting on the first anniversary of the grant date and additional options vesting on each of the subsequent anniversaries of the grant date, subject to acceleration under certain circumstances.

Information with respect to stock option activity as of and for the year ended December 31, 2019 is as follows:

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Contractual Life (Years)

Options outstanding at January 1, 2019		55,000		$	1.87
Options granted		-			-
Options exercised		(50,000	)		1.89
Options forfeited		-			-
Options outstanding at December 31, 2019		5,000			1.65	$	-		0.87
Options expected to vest		-			-	$	-		-
Options exercisable at December 31, 2019		5,000		$	-	$	-		-

Information with respect to stock option activity as of and for the year ended December 31, 2018 is as follows:

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Contractual Life (Years)

Options outstanding at January 1, 2018		1,046,833		$	3.33
Options granted		-			-
Options exercised		(486,500	)		1.88
Options forfeited		(505,333	)		4.89
Options outstanding at December 31, 2018		55,000			1.87	$	17		2.08
Options expected to vest		-			-	$	-		-
Options exercisable at December 31, 2018		55,000		$	-	$	-		-

The Company did not grant stock options during the years ended December 31, 2019, and 2018, and the number of options vested were zero and 24,000 respectively.

The Company received cash for the exercise price associated with stock options exercised of $127,000 and $136,000 during the years ended December 31, 2019 and 2018, respectively. The total intrinsic value realized by participants on stock options exercised was $0 and $701,318 during the years ended December 31, 2019 and 2018, respectively.

Restricted Stock Units

During the years ended December 31, 2019 and 2018, the Company issued RSUs to employees which vest upon the achievement of specific market-based or time-based measures. The fair value for RSU’s is calculated based on the stock price on the grant date and expensed ratably over the requisite service period, which ranges between one year and five years. The following table summarizes the information about vested and unvested restricted stock units for the years ended December 31, 2019 and 2018.

	Number of Shares			Weighted Average Fair Value

Nonvested RSUs at January 1, 2018		1,634,663		$	1.96
RSUs granted		428,526			3.23
RSUs forfeited		(140,997	)		2.47
RSUs vested		(350,667	)		3.30

Nonvested RSUs at December 31, 2018		1,571,525		$	1.96

Nonvested RSUs at January 1, 2019		1,571,525		$	1.96
RSUs granted		918,459			2.56
RSUs forfeited		(64,172	)		3.12
RSUs vested		(452,087	)		3.30

Nonvested RSUs at December 31, 2019		1,973,725		$	1.49

As of December 31, 2019, the Company had $0.5 million of unrecognized compensation expense related to the RSUs expected to be recognized on a pro-rata straight line basis over a weighted average remaining service period of approximately 0.98 years.