EQUITY COMPENSATION PLANS AND SHARE-BASED COMPENSATION

The Company has previously adopted equity and share-based compensation plans to attract and retain executives, directors and key employees. Under these plans, the Company has granted qualified and non-qualified common stock options and nonvested common stock awards to officers, directors and other key employees. At December 31, 2015, 1,088,000 shares were reserved for future grants under the plans.

Stock Options

The Company has not issued any common stock options in the last four fiscal years. Previous option awards have been granted to purchase the Company’s common stock at an exercise price equal to or greater than the fair market value at the date of grant and generally have a maximum duration of ten years. The Company typically issues shares of common stock to satisfy option exercises.

Stock options outstanding as of December 31, 2015 are as follows (in thousands, except exercise price and life):



					Weighted-Average	Currently
Exercise Price			Options		Remaining Life	Exercisable
	$	24.57		13	1.3		13
	$	38.00		40	5.9		—
	$	40.00		50	5.0		—
				103	4.9		13

A summary of stock option activity for the years ended December 31, 2015, 2014 and 2013, is as follows (in thousands, except exercise price):



	2015				2014				2013
			Weighted-				Weighted-				Weighted-
			Average				Average				Average
	Underlying		Exercise		Underlying		Exercise		Underlying		Exercise
	Shares		Price		Shares		Price		Shares		Price
Outstanding at beginning of year	758		$	20.67	1,052		$	19.90	1,635		$	18.51
Granted	—		—		—		—		—		—
Exercised	(655	)	18.06		(294	)	17.93		(573	)	16.12
Canceled or forfeited	—		—		—		—		(10	)	10.00
Outstanding at end of year	103		37.34		758		20.67		1,052		19.90

Exercisable at end of year	13		24.57		663		18.14		953		18.05

At December 31, 2015, the aggregate intrinsic value for in-the-money stock options outstanding was $161,000, all of which was exercisable at the end of the year with a remaining contractual term of 1.3 years. The aggregate intrinsic value reflects the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money options) that would have been received by the option holders had all in-the-money option holders exercised their options on December 31, 2015.

The total intrinsic value of options exercised for fiscal 2015, 2014 and 2013, was $14,609,000, $11,858,000 and $22,375,000, respectively. The intrinsic values are based on the closing price of the Company’s stock on the date of exercise. The Company typically issues shares of common stock to satisfy option exercises.

Nonvested Common Stock Awards (Restricted Stock)

The Company has granted nonvested common stock awards (also known as “restricted stock”) to Company officers, employees and non-management members of the Board of Directors under the Company’s incentive plans. The nonvested common stock awards are issued as common shares upon vesting. The awards granted in 2015 and 2014 each included 40,000 shares with performance-based criteria with four annual measurement periods beginning in the year of issuance. The vesting performance criteria for each year relate to growth in the Company’s EBITDA from continuing operations, excluding gross profit from non-core sales of scrap jewelry, compared to the base period, which is the fiscal year prior to the year of issuance. All other awards granted in 2015, 2014 and 2013 vest ratably over time through a six year period from the date of issuance. The fair value of the nonvested awards is based on the Company’s closing stock price on the day of the grant or subsequent award modification date, if applicable, and the fair value of performance-based awards is based on the maximum amount of the award expected to be achieved. The amount attributable to award grants is amortized to expense over the vesting periods.

The following table summarizes the nonvested common stock award activity during 2015, 2014 and 2013 (in thousands, except fair value amounts):



	2015				2014				2013
			Weighted-				Weighted-				Weighted-
			Average				Average				Average
	Underlying		Fair Value		Underlying		Fair Value		Underlying		Fair Value
	Shares		of Grant		Shares		of Grant		Shares		of Grant
Outstanding at beginning of year	87		$	48.99	117		$	39.91	153		$	39.24
Granted	45		47.08		47		51.08		1		51.70
Vested	(5	)	43.26		(37	)	46.48		(8	)	32.97
Canceled or forfeited	(48	)	49.26		(40	)	42.14		(29	)	39.49
Outstanding at end of year	79		48.10		87		48.99		117		39.91

Nonvested common stock awards vesting in 2015, 2014 and 2013 had an aggregate intrinsic value of $245,000, $2,006,000 and $471,000, respectively, based on the closing price of the Company’s stock on the date of vesting. The outstanding award units had an aggregate intrinsic value of $2,964,000 at December 31, 2015.

Share-Based Compensation Expense

The Company’s net income includes the following compensation costs related to share-based compensation arrangements (in thousands):



	Year Ended December 31,
	2015			2014			2013
Gross compensation costs:
Stock options	$	149		$	153		$	158
Nonvested stock	280			1,826			395
Total gross compensation costs	429			1,979			553

Income tax benefits:
Stock options	(52		)	(54		)	(55		)
Nonvested stock	(98		)	(639		)	(138		)
Total income tax benefits	(150		)	(693		)	(193		)

Net compensation expense	$	279		$	1,286		$	360

Tax benefit realized from stock options exercised during the year	$	5,126		$	4,141		$	7,805

During fiscal 2014, the Company modified certain performance criteria of nonvested common stock awards granted to two of the Company’s employees in fiscal 2012 and fiscal 2011. The modification removed the impact of certain non-core earnings from the performance criteria. The total net incremental share-based compensation expense recognized during fiscal 2014 as a result of the modification was $908,000, net of a resulting $489,000 tax benefit. As no modified stock awards vested in fiscal 2015, there was no incremental impact to share-based compensation expense recognized during fiscal 2015 as a result of the modification.

As of December 31, 2015, the total compensation cost related to nonvested stock options not yet recognized was $378,000 and is expected to be recognized over the weighted-average period of 1.7 years. As of December 31, 2015, the total compensation cost related to nonvested common stock awards not yet recognized was $3,254,000 and is expected to be recognized over the weighted-average period of 1.7 years. There was $0, $126,000 and $1,288,000 of excess tax benefit over exercise price recorded as increases to additional paid-in capital in fiscal 2015, 2014 and 2013, respectively.