10.	Shareholders’ Equity

Dividends

Our dividend policy and the payment of cash dividends under that policy are subject to the Board of Director’s continuing determination that the dividend policy and the declaration of dividends are in the best interest of the Company’s shareholders. Future dividends and the dividend policy may be changed or cancelled at the Company’s discretion at any time. Payment of dividends is also subject to the continuing compliance with our financial covenants under our Credit Facility. On November 6, 2017, the Board of Directors reviewed the Company’s dividend policy and determined that it would be in the best interest of the stockholders to suspend dividend payments.

During 2017, 2016 and 2015, our Board declared the following quarterly cash dividends on our common stock:

Dividend Per Share	Record Date	Payment Date
$0.075	August 7, 2017	September 29, 2017
$0.075	May 10, 2017	June 30, 2017
$0.075	March 6, 2017	March 31, 2017
$0.066	December 16, 2016	December 30, 2016
$0.066	September 16, 2016	September 30, 2016
$0.066	June 18, 2016	June 30, 2016
$0.066	March 18, 2016	March 31, 2016
$0.066	December 16, 2015	December 30, 2015
$0.066	September 18, 2015	September 30, 2015
$0.066	June 12, 2015	June 26, 2015
$0.066	March 19, 2015	March 31, 2015

Effective August 13, 2012, the Company implemented a Dividend Reinvestment Plan (the “Plan”), under which the Company may issue up to 750,000 shares of common stock. The Plan provides a way for interested shareholders to increase their holdings in our common stock. Participation in the Plan is strictly voluntary and is open only to existing shareholders. The Plan has had limited participation.

Share-Based Compensation

The Company’s 2017 Equity and Incentive Compensation Plan (the “2017 Plan”) was approved by the Company’s stockholders on May 16, 2017 and replaced the 2007 Equity Incentive Plan. The 2017 Plan permits the granting of stock options, which are granted with an exercise price equal to or greater than the fair market value of the Company’s common stock at the date of the grant, and other stock-based awards, including appreciation rights, restricted stock, restricted stock units, performance shares and dividend equivalents. A total of 1.9 million shares of common stock were authorized for issuance. As of December 31, 2017 a total of 2.0 million shares remain available for future issuance due to forfeitures under the 2007 Equity Incentive Plan. Stock options granted to employees generally vest equally over a period of four years from the date of the grant. Stock awards granted to employees generally vest over a period of three to four years from the date of the grant. During 2017, approximately 128,000 stock options and 351,000 restricted stock awards were granted to plan participants under the 2017 plan.

On June 10, 2017, the Company granted 700,000 performance units to our Chief Executive Officer whose total value was determined to be $175,000 and will be expensed over the vesting period of three years. The maximum shares of common stock that the participant could receive upon his performance units vesting is 77,778 shares. The performance units are earned based upon the Company’s stock price during 30 consecutive trading days within a specified date range of approximately two years. The performance units are settled in the Company’s common stock subsequent to this specified date range and vest approximately three years from the date of the grant. The estimated grant date fair value and compensation expense of each performance share is determined on the date of grant by using the Monte Carlo valuation model.

The 2007 Equity Incentive Plan (the “2007 Plan”) was approved by shareholders on May 23, 2007. As of May 16, 2017, no further grants will be made under the 2007 Plan, but outstanding awards under the 2007 Plan prior to such date will continue to be unaffected in accordance with their terms. The 2007 Plan permits the granting of stock options and stock awards which are granted at a price equal to or greater than the fair market value of the Company’s common stock at the date of the grant. Stock options granted to employees generally vest equally over a period of three to five years from the date of the grant. Stock awards granted to employees generally vest equally over a period of four to five years from the date of the grant. During 2017, no stock options and approximately 54,000 restricted stock awards were granted to plan participants under the 2007 Plan. During 2016, approximately 105,000 stock options and 267,000 restricted stock awards were granted to plan participants under the 2007 Plan. The awards outstanding are service based awards that vest over a service period. The number of shares reserved for issuance under the 2007 Plan is 3,300,000, of which approximately 414,000 shares were available for future grant as of December 31, 2016.

There were approximately 53,000 performance-based awards outstanding at December 31, 2016, which were forfeited in 2017.

Share-based compensation expense for stock options and restricted stock awards under these plans of $1.7 million, $2.2 million and $1.9 million was recorded in the years ended December 31, 2017, 2016 and 2015, respectively. The tax benefit related to share based compensation expense was zero, $0.2 million and zero in 2017, 2016 and 2015, respectively.

Employee Stock Purchase Plan

The 2009 Employee Stock Purchase Plan (“ESPP”) was approved by shareholders on May 21, 2009.

The ESPP is administered by the Compensation Committee. The aggregate maximum number of shares of the Company’s common stock that may be granted under the ESPP is 1,500,000 shares over the ten-year term of the ESPP, subject to adjustment in the event there is a reorganization, merger, consolidation, recapitalization, reclassification, stock split-up, or similar transaction with respect to the common stock. As of December 31, 2017 a total of 1.4 million shares remain available for future issuance.

The ESPP allows employees to purchase shares of common stock at a 15% discount from market price and pay for the shares through payroll deductions. Eligible employees can enter the plan at specific “offering dates” that occur in six month intervals.

The Company recognized employee stock purchase plan expense of $83,000, $71,000 and $54,000 during the years ended December 31, 2017, 2016 and 2015, respectively.

Stock Options and Restricted Awards

The weighted-average fair value of stock options granted during 2017, 2016, and 2015 was estimated at $2.68, $2.07 and $4.35 per option, respectively, using the Black-Scholes option-pricing model based on the following assumptions:

Expected Volatility: The Company utilizes a volatility factor based on the Company’s historical stock prices for a period of time equal to the expected term of the stock option utilizing weekly price observations. For 2017, 2016, and 2015, the Company utilized weighted-average volatility factors of 39%, 39% and 44%, respectively.

Expected Term: Due to limited historical exercise data, the Company utilizes the simplified method of determining the expected term based on the vesting schedules and terms of the stock options. For 2017, 2016 and 2015, the Company utilized weighted-average expected term factors of 6.3 years, 6.5 years and 6.3 years, respectively.

Risk-Free Interest Rate: The risk-free interest rate factor utilized is based upon the implied yields currently available on U.S. Treasury zero-coupon issues over the expected term of the stock options. For 2017, 2016 and 2015, the Company utilized a weighted-average risk-free interest rate factor of 2.2%, 2.1% and 1.9%, respectively.

Expected Dividends: The Company utilized a weighted average expected dividend rate of 3.3%, 3.6% and 2.4% to value options granted during 2017, 2016 and 2015, respectively.

Information related to all stock options under the 2017 Plan, 2007 Plan and 1997 Plan for the years ended December 31, 2017, 2016 and 2015 is shown in the tables below:

(Shares in thousands)	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value ($000)
Outstanding at December 31, 2016		1,519			10.25	6.1 years
Granted		128			9.24
Forfeitures		(700	)		12.44
Exercised		(292	)		3.92
Outstanding at December 31, 2017		655			10.53	6.0 years	$	78
Exercisable at December 31, 2017		463			10.49	5.2 years	$	78

(Shares in thousands)	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value ($000)
Outstanding at December 31, 2015		1,877		$	10.30	6.8 years
Granted		105			7.36
Forfeitures		(268	)		11.91
Exercised		(195	)		6.90
Outstanding at December 31, 2016		1,519			10.25	6.1 years	$	5,816
Exercisable at December 31, 2016		959			9.23	5.3 years	$	4,608

(Shares in thousands)	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value ($000)
Outstanding at December 31, 2014		1,727		$	10.12	7.3 years
Granted		286			11.55
Forfeitures		(106	)		12.31
Exercised		(30	)		4.47
Outstanding at December 31, 2015		1,877			10.30	6.8 years	$	1,769
Exercisable at December 31, 2015		977			8.48	5.4 years	$	1,765

Information related to all restricted stock awards under the 2017 Plan and 2007 Plan for the year ended December 31, 2017 is shown in the table below. The fair value of restricted stock awards is based on the price of the stock in the open market on the date of the grant. The fair value of the restricted stock awards is recorded as compensation expense on a straight-line basis over the vesting periods of the awards and account for forfeitures when they occur.

(Shares in thousands)	Shares			Weighted Average Grant Date Fair Value
Nonvested at December 31, 2016		509		$	9.64
Granted		405			9.88
Vested		(92	)		9.78
Forfeited		(268	)		9.70
Nonvested at December 31, 2017		554			9.75

The weighted average grant date fair value of restricted stock awards granted was $9.88, $9.76 and $9.48 per share in fiscal years 2017, 2016 and 2015.

The Company received $1.1 million in cash from employees exercising options during the year ended December 31, 2017, $1.3 million in cash from employees exercising options during the year ended December 31, 2016 and $0.1 million from employees exercising options during the year ended December 31, 2015. The intrinsic value of options exercised during the years ended December 31, 2017, 2016 and 2015 was $2.6 million, $1.0 million and $0.2 million, respectively. Unrecognized compensation expense related to nonvested shares of stock options, restricted stock and performance units was $5.0 million at December 31, 2017 and will be recognized over a weighted average vesting period of 2.7 years.

Warrants to Purchase Common Stock

The Company has previously issued warrants to purchase common shares in conjunction with business acquisitions, debt issuances and employment contracts.

On December 28, 2006, the Company issued warrants to purchase 250,000 shares to Icarus Investment Corp. (“Icarus”), a related party, at an exercise price of $9.07 and an expiration date of December 26, 2016. On December 7, 2016, the Company and Icarus entered into an amendment of the warrant agreement pursuant to which the warrants were issued to provide for the cashless exercise of the warrants. During the year ended December 31, 2016, all of the Company’s previously outstanding warrants were exercised and the Company issued 89,640 shares of common stock through a cashless exercise pursuant to such amendment at an effective price of $9.07 per share. As of December 31, 2017 and 2016, there were zero warrants outstanding.

Stock Purchase

During 2016, the Company repurchased 30,000 shares of common stock from a former owner of a subsidiary acquired by the Company in 2014 for a total cost of $0.2 million. In December 2016, the Company entered into an agreement to repurchase 75,000 shares of common stock from a current segment president, who is a former owner of a subsidiary acquired by the Company in 2013, for a total cost of $1.1 million, which was paid in January 2017. This transaction is reflected in the accounts payable and accrued expenses line in the Consolidated Balance Sheets as of December 31, 2016. The shares were immediately retired subsequent to their repurchase. There were no stock repurchases during 2017 or 2015.