SHAREHOLDERS’ EQUITY

Stock-Based Compensation Plans

The Company currently has two equity compensation plans which reserve shares of common stock for issuance to key employees, directors, consultants and advisors to the Company. The following is a description of these plans:

The 1999 Long-term Stock Incentive Plan, as amended (“1999 Plan”) - This plan was adopted in October 1999 with substantially the same terms and provisions as the 1995 Long-term Stock Incentive Plan. The number of shares that may be granted under this plan to a maximum of 7,500,000. The maximum number of shares granted per type of award to any individual may not exceed 1,500,000 in any calendar year and 3,000,000 in total. The ability to grant new awards under this plan ended on December 31, 2009 but awards granted prior to such date continue until their expiration. A total of 50,000 options were outstanding under this plan as of December 31, 2018.

The 2010 Long-term Stock Incentive Plan (“2010 Plan”) - This plan was adopted in April 2010 with substantially the same terms and provisions as the 1999 Long-term Stock Incentive Plan. The maximum number of shares granted per type of award to any individual may not exceed 1,500,000 in any calendar year. Restricted stock grants and common stock awards reduce stock options otherwise available for future grant. Awards for a maximum of 7,500,000 shares may be granted under this plan. A total of 546,148 options and 132,484 restricted stock units were outstanding under this plan as of December 31, 2018.

Shares issued under our share-based compensation plans are usually issued from shares of our common stock held in the treasury.

Compensation cost related to non-qualified stock options recognized in continuing operations (selling, distribution and administrative expense) for 2018, 2017 and 2016 was $0.3 million, $1.1 million, and $0.7 million respectively. ETG compensation cost related to non-qualified stock options recognized in discontinued operations was $0.4 million in 2018, primarily related to the acceleration of stock options due to the sale of the France business of approximately $0.3 million, de minimis compensation cost in 2017 and $0.1 million in 2016. NATG segment’s compensation cost related to non-qualified stock options was de minimis in 2016. The related future income tax benefits recognized for 2018, 2017 and 2016 were $0.1 million, $0.2 million and $0.3 million, respectively.

Stock Options

The following table presents the weighted-average assumptions used to estimate the fair value of options granted in 2018, 2017 and 2016:



	2018		2017		2016
Expected annual dividend yield	1.4	%	2.4	%	—	%
Risk-free interest rate	2.94	%	2.26	%	1.64	%
Expected volatility	48.0	%	48.9	%	44.4	%
Expected life in years	5.2		4.0		7.1

The following table summarizes information concerning outstanding and exercisable options:



	Weighted Average
	2018					2017					2016
	Shares			Weighted Avg. Exercise Price		Shares			Weighted Avg. Exercise Price		Shares			Weighted Avg. Exercise Price
Outstanding at beginning of year	1,001,300			$	11.58	1,410,250			$	12.57	954,625			$	15.98
Granted	17,550			$	31.66	10,000			$	24.36	670,000			$	8.43
Exercised	(400,203		)	$	12.18	(138,450		)	$	13.49	0			$	0.00
Canceled or expired	(22,499		)	$	15.24	(280,500		)	$	16.04	(214,375		)	$	14.86
Outstanding at end of year	596,148			$	11.64	1,001,300			$	11.58	1,410,250			$	12.57

Options exercisable at year end	341,515					588,802					750,250
Weighted average fair value per option granted during the year	$	12.87				$	10.69				$	3.94

The total intrinsic value of options exercised was $9.5 million in 2018 and $1.3 million in 2017 and de minimis in 2016.

The following table summarizes information about options vested and exercisable or nonvested that are expected to vest (nonvested outstanding less expected forfeitures) at December 31, 2018:



Range of Exercise Prices					Number Exercisable	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value (in millions)
$	5.00	to	$	10.00	366,043	$	8.54	7.52	$	5.5
$	10.01	to	$	15.00	126,250	$	13.57	2.05	1.3
$	15.01	to	$	20.00	79,348	$	18.73	3.17	0.4
$	20.01	to	$	25.00	0	$	0.00	0	0.0
$	25.01	to	$	30.00	0	$	0.00	0	$	0.0
$	30.01	to	$	31.66	17,550	$	31.66	9.77	$	0.0
$	5.00	to	$	31.66	589,191	$	11.68	5.83	$	7.2

The aggregate intrinsic value in the tables above represents the total pretax intrinsic value (the difference between the closing stock price on the last day of trading in 2018 and the exercise price) that would have been received by the option holders had all options been exercised on December 31, 2018. This value will change based on the fair market value of the Company’s common stock.

The following table reflects the activity for all unvested stock options during 2018:



	Shares		Weighted Average Grant- Date Fair Value
Unvested at January 1, 2018	412,498		$	4.93
Granted	17,550		$	12.87
Vested	(152,916	)	$	7.52
Forfeited	(22,499	)	$	12.28
Unvested at December 31, 2018	254,633		$	4.73

At December 31, 2018, there was approximately $0.5 million of unrecognized compensation costs related to unvested stock options, which is expected to be recognized over a weighted average period of 1.75 years. The total fair value of stock options vested during 2018, 2017 and 2016 was $1.2 million, $0.9 million and $0.6 million, respectively.

Restricted Stock and Restricted Stock Units

In August 2010, the Company granted 175,000 RSUs under the 2010 Plan to a key employee who is also a Company director. These RSUs have none of the rights as other shares of common stock, other than rights to cash dividends, until common stock is distributed. This RSU award was a non-performance award which originally vested in ten equal annual installments of 17,500 units beginning May 15, 2011 and each May 15, thereafter. Pursuant to the CEO succession plan, the remaining 35,000 unvested shares will accelerate and vest on January 7, 2019. Compensation expense related to this RSU award was approximately $0.1 million during 2018, 2017 and 2016.

In November 2011, the Company granted 100,000 RSUs under the 2010 Plan to a key employee who is also a Company director. These RSUs have none of the rights as other shares of common stock, other than rights to cash dividends, until common stock is distributed. This RSU award was a non-performance award which vested in ten equal annual installments of 10,000 units beginning November 14, 2012 and each November 14 thereafter. Pursuant to the CEO succession plan, the remaining 30,000 unvested shares will accelerate and vest on January 7, 2019. Compensation expense related to this RSU award was approximately $0.2 million during 2018 and $0.1 million during 2017 and 2016.

In March 2012, the Company granted 50,000 RSUs under the 2010 Plan to a key employee. This RSU has none of the rights as other shares of common stock, other than rights to cash dividends, until common stock is distributed. This RSU award was a non-performance award which vest in ten equal annual installments of 5,000 units beginning March 1, 2013 and each March 1 thereafter. Compensation expense related to this RSU award was approximately less than $0.1 million during 2018 and approximately $0.1 million in 2017 and 2016.

In July 2015, the Company granted 23,620 RSUs under the 2010 Plan to, at that time, a key employee. These RSU's had none of the rights as other shares of common stock, other than rights to cash dividends, until common stock is distributed. This RSU award was a non-performance award which was to vest in four equal annual installments of 5,905 units beginning July 6, 2015 and each July 6 thereafter. This key employee was terminated in the third quarter of 2016 and this award was forfeited. Compensation expense related to this RSU award was de minimis in 2016.

In February 2016, the Company granted 100,000 RSUs under the 2010 Plan to certain key employees, one of whom is also a Company director. These RSUs have none of the rights as other shares of common stock, other than rights to cash dividends, until common stock is distributed. The RSU awards were non-performance awards which vest in three annual installments beginning February 1, 2017. Pursuant to the CEO succession plan, 16,666 unvested shares will accelerate and vest on January 7, 2019 and the remaining RSU shares will vest on February 1, 2019. Compensation expense related to these RSU awards was approximately $0.1 million during 2018 and $0.2 million during 2017 and $0.5 million during 2016.

In October 2017 and November 2017, the Company granted 53,288 RSU's under the 2010 Plan to certain key employees. These RSUs have none of the rights as other shares of common stock, other than rights to cash dividends, until common stock is distributed. The RSU awarded in October 2017 was a non-performance award which vest in two installments: 1,844 units vested immediately and 1,844 units vest in April 2018. The RSU's granted in November 2017 of 49,600 units were performance awards which were to vest in up to three installments beginning December 2019. Compensation expense, recorded in continuing operations related to the non-performance award during 2018 was de minimis and approximately $0.1 million recorded during 2017. Due to the sale of the France business and terms of the performance award, compensation expense, recorded in discontinued operations, during 2018 was $1.5 million and less than $0.1 million during 2017.

In October 2018, the Company granted 5,117 RSU's under the 2010 Plan to a key employee. These RSU's have none of the rights as other shares of common stock, other than rights to cash dividends, until common stock is distributed. This RSU award was a non-performance award which vest in four annual installments beginning October 2, 2019. Compensation expense related to this award was de minimis in 2018.

Share-based compensation expense for restricted stock issued to Directors was $0.1 million in 2018, $0.1 million benefit in 2017 due to the resignation of two Directors during the year and $0.1 million in 2016.

In 2018, due to the sale of the France business, $1.5 million of compensation expense related to the performance RSU's above were reported in discontinued operations and $0.8 million were reported in continuing operations. In 2017 and 2016, all of the above share-based compensation expense is recognized within continuing operations in selling, distribution and administrative expense.

The following table reflects the activity for all unvested restricted stock during 2018:



	Shares		Weighted Average Grant- Date Fair Value
Unvested at January 1, 2018	240.867		16.22
Granted	8.894		13.49
Vested	(117.277	)	19.55
Unvested at December 31, 2018	132.484		14.31

Employee Stock Purchase Plan

The 2018 Employee Stock Purchase Plan - This plan was approved by the Company's stockholders in December 2018 and a reserve of 500,000 shares of common stock has been established under this plan. The Company adopted this plan, the terms of which allow for eligible employees (as defined in the 2018 Employee Stock Purchase Plan) to participate in the purchase, during each six month purchase period, up to a maximum of 10,000 shares of the Company's common stock at a purchase price equal to 85% of the closing price at either the start date or the end date of the stock purchase period, whichever is lower. Compensation expense related to this plan of approximately $0.1 million is recognized in selling, distribution and administrative expenses during 2018.

Stock Repurchase

On July 31, 2018 the Company's Board of Director's approved a share repurchase program with a repurchase authorization of up to two million shares of the Company's common stock. Under the share repurchase program, the Company is authorized to purchase shares from time to time through open market purchases, tender offerings or negotiated purchases, subject to market conditions and other factors. During the third quarter of 2018, the Company repurchased 232,550 common shares for approximately $9.1 million. Details of the purchase is as follows:



Fiscal Month	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs

July	232,550	38.96	232,550	1,767,450