Stock-Based Compensation

The Company has two stock-based compensation plans under which outstanding equity awards have been granted, the 2008 Equity Incentive Plan ("2008 EIP") and the 2017 Equity Incentive Compensation Plan ("2017 EICP") (collectively, the "Plans"). No additional awards may be granted under the 2008 EIP. Awards granted outside of the Plans are referred to as inducement awards.

During the three and nine months ended September 30, 2018, grants were made to the Company's key employees and directors. The grants included stock options, nonvested stock awards (restricted stock, restricted stock units, and performance-based restricted stock units ("PBUs")), and stock appreciation rights ("SARs").

Summary of the Company's 2018 Grant Activity

The following is a summary of grant activity for the three months ended September 30, 2018 (in thousands, except number of awards):



	Three Months Ended September 30, 2018
	# of Awards Granted	Grant Date Fair Value
Stock options	70,000	$	215
Restricted stock	18,391	170
Restricted stock units	4,879	44
PBUs	36,035	331
SARs	28,125	45
	157,430	$	805

The awards granted in the three months ended September 30, 2018 had the following terms:


•	The stock options vest over three years in approximately equal annual installments commencing one year after the grant date.


•	The restricted stock and restricted stock units vest over three years in approximately equal annual installments commencing one year after the grant date.


•	The vesting of the PBUs is subject to the satisfaction of certain specified financial performance conditions for the two-year performance period ending on either December 31, 2018 or December 31, 2019. PBUs that vest will be settled in shares of the Company's common stock. Stock-based compensation expense for these PBUs is being recognized at target, as if 100% of the awards will vest.

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The SARs will vest on March 1, 2020. Upon vesting, 25% of the SARs may be exercised on the last day of each of the first, second and third calendar quarters in 2020. Within 30 days after the SARs are exercised, the Company must settle the exercised SARs in a cash payment equal to the excess of (i) the lesser of the fair market value, as of the date on which the SARs are exercised, or $18 per share, over (ii) $9.15 per share, less any applicable tax withholding. Vested SARs not exercised during any previous quarter will remain outstanding and be automatically exercised as of December 31, 2020.

The following is a summary of grant activity for the nine months ended September 30, 2018 (in thousands, except number of awards):



	Nine Months Ended September 30, 2018
	# of Awards Granted	Grant Date Fair Value
Stock options	465,000	$	1,337
Restricted stock	324,776	3,071
Restricted stock units	83,385	791
PBUs	289,192	2,708
SARs	331,250	609
	1,493,603	$	8,516

The awards granted in the nine months ended September 30, 2018 had the same terms as those described above, except:


•	The restricted stock awards and restricted stock units granted to the Company's directors during the second quarter of 2018 vest on the later of (i) June 26, 2019 or (ii) the date of, and immediately prior to, the Company's 2019 Annual Meeting of Shareholders.

Additional Information

As of September 30, 2018, there were approximately 2.8 million shares available for future grant under the 2017 EICP.

Stock-based compensation expense for the three months ended September 30, 2018 and 2017 was $1.3 million and $2.1 million, respectively, and $4.2 million and $5.4 million for the nine months ended September 30, 2018 and 2017, respectively, and is included in Selling, general and administrative expenses in the Company's Condensed Consolidated Statement of Operations. As of September 30, 2018, there was $8.7 million of unrecognized stock-based compensation expense related to the Company's equity awards which will be recognized over approximately 2.1 years.

On June 30, 2018, SARs covering 200,000 shares of the Company's common stock vested and became payable in cash in a lump sum equal to $1.0 million (less applicable tax withholding), which represents the excess of the fair market value, as of June 30, 2018, of the shares of the Company's common stock over $4.71, the fair market value (closing price) of the Company's common stock on the date of grant, April 27, 2016. This payment was made in July 2018.

During the nine months ended September 30, 2018, the Company issued 483,623 shares of common stock and paid $5.4 million in long-term incentive compensation related to the vesting of PBU awards granted in 2016.