18.

STOCK OPTION PLANS AND RESTRICTED STOCK AWARDS

In May 2008, the shareholders approved the 2008 Equity Incentive Plan which authorizes the issuance of up to 3,949,891 shares of Company common stock for grants of stock options and restricted stock to employees, officers, consultants and directors of the Company and its subsidiaries, and expires in 2018. The plan authorizes the issuance of incentive and non-qualified stock options, as well as, restricted stock awards. The 2008 Equity Incentive Plan replaced the 2000 Stock Option Plan. No further grants will be made under the 2000 Stock Option Plan, but shares may continue to be issued under such plan pursuant to grants previously made. As of December 31, 2016, we have 17,500 outstanding options under our 2000 Stock Option Plan.

Stock Options

The Company expensed $485,000, $549,000 and $876,000, for the years ended December 31, 2016, 2015 and 2014, respectively.

The estimated fair value of the options granted during 2016 and prior years was calculated using the Black-Scholes options pricing model. There were 121,500, 83,000 and 169,000 options granted during 2016, 2015 and 2014, respectively. The options will vest, in equal installments, over a five-year period. The fair value of each stock option granted in 2016, 2015 and 2014, was estimated on the date of grant using the following weighted-average assumptions.


	For the Year Ended December 31,
	2016		2015		2014
Dividend yield		2.9%		2.5%		2.6%
Volatility		33.1%		47.7%		50.3%
Risk-free interest rate		1.2%		1.5%		1.5%
Expected life		5.6 years		6.1 years		6.3 years
Weighted average grant date fair value	$	3.96	$	5.83	$	5.70

The expected volatility is solely based on the daily historical stock price volatility over the expected option life. The expected life of options granted is derived from the output of the option valuation model and represents the period of time an optionee will hold an option before exercising it. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury five-year constant maturity yield curve in effect at the time of the grant. The Company estimates its forfeiture rates based on its historical experience. The forfeiture rate for 2016 was 6.0%.

The following table presents option activity under the Company’s stock option plans as of and for the year ended December 31, 2016.


	Number of Stock Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
	(In thousands)				(In years)		(In thousands)
Outstanding at January 1, 2016		1,288	$	11.00
Granted		122		16.71
Exercised		(483)		10.65
Forfeited or expired		(51)		12.99

Outstanding at December 31, 2016		876	$	11.88		5.06	$	9,684

Vested or expected to vest at December 31, 2016		834	$	11.70		4.90	$	9,369
Exercisable at December 31, 2016		568	$	9.95		3.44	$	7,370

The total intrinsic value of options exercised during the years ended December 31, 2016, 2015 and 2014 was $3.9 million, $2.1 million and $2.5 million, respectively.

As of December 31, 2016, there was a total of $978,000 in unrecognized compensation cost related to nonvested options granted under the Plan. That cost is expected to be recognized over a weighted-average period of approximately 3.2 years. The total fair value of options vested was $489,000, $524,000 and $841,000 during 2016, 2015 and 2014, respectively. Cash received from stock option exercises was $5.2 million, $5.1 million and $5.5 million, in 2016, 2015 and 2014, respectively.

At December 31, 2016, options for the purchase of 876,036 shares of the Company’s common stock were outstanding under the above plans, of which options to purchase 567,836 shares were exercisable at prices ranging from $7.68 to $18.14.

The Company has a policy of issuing new shares to satisfy share option exercises.

Restricted Stock

Under the 2008 Equity Incentive Plan, the Company granted 166,500, 97,000 and 400,000 restricted stock awards during 2016, 2015 and 2014 respectively. The weighted average grant date fair value of restricted stock awards granted in 2016, 2015 and 2014 was $16.89 per share, $16.07 per share and $14.78 per share, respectively. These awards will vest, in equal installments, over a period of three or five years.

Compensation cost is recognized over the requisite service period, which is five years, and amounted to $2.3 million, $2.2 million and $2.1 million during the years ended December 31, 2016, 2015 and 2014, respectively. Total unrecognized compensation cost related to restricted stock awards was $5.0 million at December 31, 2016.

The table below summarizes activity related to the Company’s non-vested restricted shares for the year ended December 31, 2016.


	Shares		Weighted Average Fair Value
	(In thousands)

Nonvested at January 1, 2016		506	$	14.55
Granted		166		16.89
Vested		(152)		14.58
Forfeited		(60)		14.24

Nonvested at December 31, 2016		460	$	15.43

Under the 2008 Equity Incentive Plan, 647,192 shares of common stock were available for the granting of future options and restricted stock awards as of December 31, 2016.