Share-based Compensation

The Company maintains the 2008 A.M. Castle & Co. Omnibus Incentive Plan, amended and restated as of July 27, 2016, for the benefit of officers, directors and other key management employees. In 2016, the Company's stockholders approved an increase in the number of shares available for grants of awards under the plan of 2,000 shares. As a result, there is an aggregate amount of 5,350 authorized shares under the plan.

The consolidated compensation cost recorded for the Company’s share-based compensation arrangements was $1,154, $828 and $1,972 for 2016, 2015 and 2014, respectively. The total income tax benefit recognized in the Consolidated Statements of Operations and Comprehensive Loss for share-based compensation arrangements was $0, $0 and $189 in 2016, 2015 and 2014, respectively. All compensation expense related to share-based compensation arrangements is recorded in sales, general and administrative expense. The unrecognized compensation cost as of December 31, 2016 associated with all share-based payment arrangements is $1,659 and the weighted average period over which it is to be expensed is 1.2 years.

2015 STIP

On July 24, 2015, the Board of Directors of the Company approved certain revisions to the Company's 2015 STIP. Along with providing cash bonus opportunities, the revisions awarded 124 stock options to executive officers and other select personnel, which were granted under the Company's 2008 Omnibus Incentive Plan. The stock options vest in three equal installments over three years from the grant date and are exercisable immediately upon vesting. The exercise price was equal to the closing price of the Company's stock on the date of grant. The term of the options is 10 years from the date of grant.

The weighted average grant date fair value of $2.10 per share for the options granted under the 2015 STIP was estimated using the Black-Scholes option-pricing model with the following assumptions:



Expected volatility	56.1	%
Risk-free interest rate	1.8	%
Expected life (in years)	6.0
Expected dividend yield	—

Long-Term Compensation and Incentive Plans

The Board of Directors of the Company approved equity awards under the Company's 2016 LTCP for executive officers and other select personnel on February 25, 2016 and October 25, 2016, respectively. The 2016 LTCP awards included non-qualified stock options.

On July 24, 2015, the Board of Directors of the Company approved equity awards under the Company's 2015 LTCP for executive officers and other select personnel. The 2015 LTCP awards included RSUs and non-qualified stock options.

On March 26, 2014, the Board of Directors of the Company approved equity awards under the Company’s 2014 LTCP for executive officers and other select personnel. The 2014 LTCP included RSUs and PSUs.

Each of the respective LTCPs for 2016, 2015 and 2014 are subject to the terms of the Company's 2008 A.M. Castle & Co. Omnibus Incentive Plan, amended and restated as of July 27, 2016.

Restricted Share Units and Non-Vested Shares

The RSUs granted under the 2015 LTCP will cliff vest on December 31, 2017. Approximately 21 RSUs granted under the 2014 LTCP cliff vested on December 31, 2016. Each RSU that becomes vested entitles the participant to receive one share of the Company’s common stock. The number of shares delivered may be reduced by the number of shares required to be withheld for federal and state withholding tax requirements (determined at the market price of Company shares at the time of payout).

The outstanding non-vested share balance consists of shares issued to the Board of Directors. Non-vested shares were issued to the directors during the third quarter of 2016, and will cliff vest on the first anniversary of the date of grant. Non-vested shares issued to the directors in the second quarter of 2015 and 2014 will cliff vest after three years in the second quarter of 2018 and 2017, respectively.

The grant date fair value of the RSUs and non-vested shares is established using the market price of the Company’s stock on the date of grant.

A summary of the non-vested share and RSU activity is as follows:



	Non-Vested Shares				Restricted Share Units
	Shares		Weighted-Average Grant Date Fair Value		Units		Weighted- Average Grant Date Fair Value
Outstanding at January 1, 2016	170		$	10.08	210		$	5.91
Granted	304		$	1.47	—		$	—
Forfeited	(125	)	$	1.82	(48	)	$	6.88
Vested	(85	)	$	7.83	(21	)	$	14.35
Outstanding at December 31, 2016	264		$	2.40	141		$	4.31
Expected to vest at December 31, 2016	264		$	2.40	78		$	4.62

The unrecognized compensation cost as of December 31, 2016 associated with RSU and non-vested share awards was $437. The total fair value of shares vested during the years ended December 31, 2016, 2015 and 2014 was $158, $1,762 and $938, respectively.

Performance Shares

PSU awards are based on two independent conditions, the Company’s relative total shareholder return (“RTSR”), which represents a market condition, and Company-specific target goals for Return on Invested Capital (“ROIC”) as defined in the LTCPs.

There were no PSUs awarded by the Company under the 2016 LTCP and 2015 LTCP. The status of PSUs that were awarded as part of the 2014 LTCP is summarized below as of December 31, 2016:

The grant date fair value of PSU awards containing the RTSR performance condition was estimated using a Monte Carlo simulation with the following assumptions:



Expected volatility	40.8	%
Risk-free interest rate	0.79	%
Expected life (in years)	2.77
Expected dividend yield	—

The grant date fair value for PSU awards subject to the ROIC performance condition was established using the market price of the Company's common stock on the date of grant.

Final award vesting and distribution of performance awards at December 31, 2016 that were granted under the 2014 LTCP was determined based on the Company's actual performance versus the target goals for a three-year consecutive period (as defined in the 2014 LTCP). Refer to the table above for the number of shares expected to be issued under the 2014 LTCP. There was no unrecognized compensation cost associated with the 2014 LTCP PSUs as of December 31, 2016.

Stock Options

The Company granted 1,668 stock options under the 2016 LTCP that vest ratably during 2017, 2018 and 2019.

In addition to the stock options granted under the 2015 STIP, the Company granted 583 stock options under the 2015 LTCP that vest in three equal installments during 2016, 2017 and 2018. The first installment will be exercisable 12 months after the date of grant and the remaining installments will be exercisable on February 25, 2017 and February 25, 2018, except for awards granted to the Company's President and Chief Executive Officer which become exercisable on April 17, 2017 and April 18, 2018.

For stock options granted under the 2016 LTCP and 2015 LTCP, the exercise price is equal to the closing price of the Company's stock on the date of grant, and the term of the options is 10 years from the date of grant. The weighted average grant date fair values of $0.90 per share and $2.05 per share for options granted under the 2016 LTCP and 2015 LTCP, respectively, were estimated using the Black-Scholes option-pricing model with the following weighted average assumptions:



	2016		2015
Expected volatility	63.8	%	55.7	%
Risk-free interest rate	1.3	%	1.8	%
Expected life (in years)	6.0		5.8
Expected dividend yield	—		—

A summary of stock option activity under all stock-based compensation plans is as follows:



	Shares		Weighted Average Exercise Price		Intrinsic Value		Weighted Average Remaining Contractual Life
Stock options outstanding at January 1, 2016	691		$	4.43
Granted	1,668		$	1.58
Exercised	—		$	—
Forfeited	(124	)	$	5.24
Expired	—		$	—
Stock options outstanding at December 31, 2016	2,235		$	2.26	$	—	9.1 years
Stock options exercisable at December 31, 2016	211		$	4.82	$	—	7.8 years
Stock options vested or expected to vest as of December 31, 2016	1,726		$	2.46	$	—	9.0 years

No options were exercised during the years ended December 31, 2016 and 2015. The total intrinsic value of options exercised during the year ended December 31, 2014 was $56. The unrecognized compensation cost associated with stock options as of December 31, 2016 was $1,222.

Grant Date Fair Value

Estimated Number of
Performance Shares to be Issued

RTSR performance condition

ROIC performance condition