Stock-based Compensation

The Company applies the provisions of FASB ASC 718, “Compensation - Stock Compensation,” to account for the Company’s stock-based compensation. Stock-based compensation cost is measured at the grant date based on the calculated fair value of the award and is recognized over the employees’ requisite service period. The Company recorded stock-based compensation expense of $1,696, $1,346, and $1,471 for the years ended December 31, 2017, 2016, and 2015, respectively, related to fully-vested stock awards, restricted stock awards, and performance unit awards. At December 31, 2017, unrecognized compensation expense for awards the Company expects to vest approximated $3,687. The Company will recognize this expense over the upcoming 3.3 year period through March 2021.

Shares issued as a result of vested stock-based compensation generally will be from previously issued shares that have been reacquired by the Company and held as Treasury stock or authorized but previously unissued common stock.

The Company realized reductions in excess tax benefits of $0 and $332 for the years ended December 31, 2017 and 2016, respectively, and excess tax benefits for the tax deduction from stock-based compensation of $253 for the year ended December 31, 2015. This excess tax benefit or deficiency is included in "Cash flows from financing activities" in the Consolidated Statements of Cash Flows for the years ended December 31, 2016 and 2015. Applying the prospective approach in accordance with FASB ASU 2016-09, a charge of $127 was recorded in "Income tax expense" in the Consolidated Statements of Operations, and is now included in "Cash flows from operating activities" for the twelve months ended December 31, 2017 in the Consolidated Statements of Cash Flows.

At December 31, 2017, the Company had stock awards issued pursuant to the 2006 Omnibus Incentive Plan, as amended and restated in May 2016 (“Omnibus Plan”). The Omnibus Plan allows for the issuance of 1,270,000 shares of common stock through the granting of stock options or stock awards (including performance units convertible into stock) to key employees and directors at no less than 100% of fair market value on the date of the grant. The Omnibus Plan provides for the granting of “nonqualified options” with a duration of not more than ten years from the date of grant. The Omnibus Plan also provides that, unless otherwise set forth in the option agreement, stock options are exercisable in installments of up to 25% annually beginning one year from the date of grant. No stock options have been granted under the Omnibus Plan and, as such, there was no stock-based compensation expense related to stock options recorded in 2017, 2016, or 2015.

Stock Option Awards

No stock options were outstanding during the years ended December 31, 2017 and 2016. Certain information for the year ended December 31, 2015 relative to employee stock options is summarized as follows:



	2015
Number of shares under the plans:
Outstanding and exercisable at beginning of year	7,500
Granted	—
Canceled	—
Exercised	(7,500	)
Outstanding and exercisable at end of year	—

The weighted average exercise price per share of the stock options exercised in 2015 was $9.08. The total intrinsic value of stock options exercised during the years ended December 31, 2015 was $253.

Fully-Vested Stock Awards

Non-employee directors are automatically awarded fully vested shares of the Company’s common stock on each date the non-employee directors are elected at the annual shareholders’ meeting to serve as directors. During the quarter ended June 30, 2017, the Nomination and Governance Committee and Board of Directors jointly approved the Deferred Compensation Plan for Non-Employee Directors under the 2006 Omnibus Incentive Plan, which permits non-employee directors of the Company to defer receipt of earned cash and/or stock compensation for service on the Board.

The non-employee directors were granted a total of 39,280, 59,598, and 14,000 fully-vested shares for the years ended December 31, 2017, 2016, and 2015, respectively. Compensation expense recorded by the Company related to fully-vested stock awards to non-employee directors was approximately $704, $698, and $534 for the years ended December 31, 2017, 2016, and 2015, respectively. During 2017, 26,860 deferred share units were allotted to the accounts of the non-employee directors pursuant to the Deferred Compensation Plan for Non-Employee Directors.

The weighted average fair value of all the fully-vested stock grants awarded was $17.92, $11.72, and $38.15 per share for 2017, 2016, and 2015, respectively.

Restricted Stock Awards and Performance Unit Awards

Under the 2006 Omnibus Plan, the Company grants eligible employees restricted stock and performance unit awards. The forfeitable restricted stock awards granted prior to March 2015 generally time-vest after a four-year period, and those granted subsequent to March 2015 generally time-vest ratably over a three-year period, unless indicated otherwise by the underlying restricted stock agreement. Performance unit awards are offered annually under separate three-year long-term incentive programs. Performance units are subject to forfeiture and will be converted into common stock of the Company based upon the Company’s performance relative to performance measures and conversion multiples as defined in the underlying program. If the Company’s estimate of the number of performance stock awards expected to vest changes in a subsequent accounting period, cumulative compensation expense could increase or decrease. The change will be recognized in the current period for the vested shares and would change future expense over the remaining vesting period.

The following table summarizes the restricted stock award, deferred stock, and performance unit award activity for the three-year periods ended December 31, 2017, 2016, and 2015:



	Restricted Stock		Deferred Stock	Performance Stock Units		Weighted Average Aggregate Grant Date Fair Value
Outstanding at January 1, 2015	108,237		—	71,990		$	36.25
Granted	29,656		—	41,114		44.93
Vested	(39,076	)	—	(23,877	)	32.35
Adjustment for incentive awards expected to vest	—		—	(53,228	)	43.26
Canceled and forfeited	(5,000	)	—	—		44.84
Outstanding at December 31, 2015	93,817		—	35,999		$	39.66
Granted	48,283		—	129,844		12.50
Vested	(56,807	)	—	—		28.45
Adjustment for incentive awards not expected to vest	—		—	(93,103	)	24.79
Canceled and forfeited	(6,021	)	—	(9,050	)	18.82
Outstanding at December 31, 2016	79,272		—	63,690		$	21.66
Granted	175,196		26,860	120,583		14.46
Vested	(22,808	)	—	—		28.88
Adjustment for incentive awards not expected to vest	—		—	46,130		19.00
Canceled and forfeited	(44,854	)	—	(49,062	)	15.40
Outstanding at December 31, 2017	186,806		26,860	181,341		$	16.53

Performance units are subject to forfeiture and will be converted into common stock of the Company based upon the Company’s performance relative to performance measures and conversion multiples as defined in the underlying plan. The aggregate fair value in the above table is based upon achieving 100% of the performance targets as defined in the underlying plan.

Excluding the fully-vested stock awards granted to non-employee directors, the Company recorded stock-based compensation expense of $1,499, $648, and $937, respectively, for the periods ended December 31, 2017, 2016, and 2015 related to restricted stock and performance unit awards. The following table presents the number of shares available for future grants:



	2017	2016	2015
Number of shares available for future grant:
Beginning of year	675,447	407,307	469,840
End of year	639,390	675,447	407,307