Stock-Based Compensation

The Company grants equity based awards to employees and non-employee directors. Equity based awards include RSA's, Stock Options, PSU's and Stock Appreciation Rights ("SAR's"). Stock-based compensation expense related to employees is included within the Payroll and benefits line item in the Condensed Consolidated Statements of Operations. Stock-based compensation expense related to non-employee directors is included within the General and administrative line item in the Condensed Consolidated Statements of Operations.

Total stock-based compensation expense for the three and nine months ended September 30, 2015 and 2014 was as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2015		2014		2015		2014
Restricted stock award expense	$	415	$	1,202	$	2,354	$	2,202
Stock option expense	46		41		616		72
PSU expense	157		743		2,590		1,457
SAR expense	19		—		536		—
Total stock-based compensation expense	$	637	$	1,986	$	6,096	$	3,731

The amount of unrecognized compensation cost as of September 30, 2015, and the expected weighted average period over which the cost will be recognized is as follows:



	As of September 30, 2015
(in thousands)	Unrecognized Compensation Cost		Expected Weighted Average Period of Recognition (in years)
Restricted stock award expense	$	1,510	0.9
Stock option expense	290		1.1
PSU expense	918		1.0
SAR expense	951		0.5
Total unrecognized stock-based compensation expense	$	3,669	0.9

Restricted Stock Awards

Restricted stock is typically granted with vesting terms of three or five years. The fair value of restricted stock awards is determined based on the closing price of the Company’s common stock on the authorization date of the grant multiplied by the number of shares subject to the stock award. Compensation expense for restricted stock awards is recognized over the entire vesting period on a straight-line basis. A summary of restricted stock award activity under the Company's various stock compensation plans for the nine months ended September 30, 2015 is presented below:



Non-vested at (in thousands, except for per share amounts)	Shares		Weighted Average Grant Date Fair Value
Non-vested at January 1, 2015	209,921		$	13.59
Granted	127,943		14.97
Vested	(157,623	)	17.78
Forfeited	(16,659	)	17.79
Non-vested at September 30, 2015	163,582		$	10.20

During the three and nine months ended September 30, 2015, the Company accelerated the terms of equity awards, including both RSA's and PSU's, granted to employees as part of the reduction in workforce. The Company recorded incremental expense of zero and $3.1 million, respectively, in the Payroll and benefits line item in the Consolidated Statement of Operations.

Stock Options

Stock options generally vest over three years and have a contractual limit of five years from the date of grant to exercise. The fair value of stock options granted pursuant to one of the Company’s plans is determined on the date of grant using the Black-Scholes option pricing model and the related expense is recognized on a straight-line basis over the entire vesting period.

The fair value of the Company's options that were granted during the nine months ended September 30, 2015 was estimated at the date of grant using a Black-Scholes options pricing model with the following weighted average assumptions:



	Nine Months Ended September 30, 2015
Stock options granted:
Risk-free interest rate	1.8	%
Dividend yield	—	%
Volatility	74.5	%
Expected term (in years)	5.0

A summary of option activity (collectively referred to as options in the below table) for the nine months ended September 30, 2015 is presented below:



(in thousands, except for per share amounts)	Number of Options Outstanding and Exercisable		Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Options outstanding, January 1, 2015	74,200		$	13.76
Options granted	56,250		$	13.87
Options exercised	—		$	—
Options expired / forfeited	(24,200	)	$	7.59
Options outstanding, September 30, 2015	106,250		$	15.22	$	—	4.0
Options exercisable as of September 30, 2015	79,581		$	14.22	$	—	4.2

Stock Appreciation Rights

Stock Appreciation Rights ("SAR's") generally vest over three years and have a contractual limit of five years from the date of grant to exercise. The fair value of SAR's granted pursuant to one of the Company’s plans is determined on the date of grant using the Black-Scholes option pricing model and the related expense is recognized on a straight-line basis over the entire vesting period.

The fair value of the Company's SAR's that were granted during the nine months ended September 30, 2015 was estimated at the date of grant using a Black-Scholes options pricing model with the following weighted average assumptions:



	Nine Months Ended September 30, 2015
SAR's granted:
Risk-free interest rate	1.8	%
Dividend yield	—	%
Volatility	74.5	%
Expected term (in years)	5.0

A summary of SAR's activity for the nine months ended September 30, 2015is presented below:



(in thousands, except for per share amounts)	Number of Options Outstanding and Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
SAR's outstanding January 1, 2015	—	$	—
Granted	243,750	$	13.87
Exercised	—	$	—
Expired / forfeited	—	$	—
SAR's outstanding June 30, 2015	243,750	$	13.87	$	—	4.8
SAR's exercisable as of June 30, 2015	43,750	$	13.87	$	—	—

The SAR's awarded during the nine months ended September 30, 2015 were awarded to the Company's Chief Executive Officer. If Amendment No. 4 to the Company’s Amended and Restated 2007 Equity Incentive Plan, as amended, is approved by a vote of the stockholder's prior to June 5, 2017, the SAR award will automatically terminate and the Option award granted in tandem with the SAR award will become exercisable pursuant to the vesting terms thereof. However, until stockholder approval is obtained, as settlement of the award is out of the control of the Company, the awards are currently classified as liability based equity awards and are recorded at the estimated fair value at each balance sheet date.

Performance Share Units

Compensation expense is recognized for PSU awards on a straight-line basis over the applicable service period, which is generally three years, based on the estimated fair value at the date of grant using a Monte Carlo simulation model. The fair value of the Company's PSU's granted during the nine months ended September 30, 2015 were estimated at the date of grant with the following weighted-average assumptions:



	Nine Months Ended September 30, 2015
PSUs granted:
Risk-free interest rate	1.0	%
Dividend yield	—	%
Volatility	64.3	%
Performance period (in years)	3.0

A summary of PSU activity under the Plans for the nine months ended September 30, 2015 is presented below:



(in thousands except per share amounts)	Units		Weighted Average Grant Date Fair Value
Non-vested at January 1, 2015	142,357		$	30.65
Granted (1)	69,218		20.10
Vested / Settled (1)	(13,763	)	30.52
Forfeited / Canceled (1)	(2,420	)	26.04
Non-vested at September 30, 2015	195,392		$	26.98

(1) The number of units shown in the table above are based on target performance. The final number of shares of common stock issued may vary depending on the achievement of market conditions established within the awards, which could result in the actual number of shares issued ranging from zero to a maximum of two times the number of units shown in the above table.

The following table shows the PSUs that were settled during the nine months ended September 30, 2015 by issuing the Company's common stock relative to a broad stock index and a peer group performance index. There were no PSUs settled during the nine months ended September 30, 2014.



	Year of Grant	Net Number of Issued Shares upon Vesting	Shares Withheld to Settle Tax Withholding Obligations	TSR Multiple Range		Russell 3000 Multiple
	Year of Grant	Net Number of Issued Shares upon Vesting	Shares Withheld to Settle Tax Withholding Obligations	Low	High	Low	High
Nine Months Ended September 30, 2015
	2013	8,768	3,954	1.75	1.75	2.00	2.00
	2014	2,506	1,145	0.63	0.75	—	0.75