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, 2016, 977,000 shares were reserved for future grants to all employees and directors under the plans. Additionally, there were 2,052,000 shares reserved for future grants to current employees and directors who were not employees or directors of the Company at the date of the Merger.

Stock Options

The Company has not issued any common stock options in the last five 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 had 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, 2016 are as follows (in thousands, except exercise price and life):



					Weighted-Average	Currently
Exercise Price			Options		Remaining Life	Exercisable
	$	24.57		13	0.3		13
	$	38.00		40	4.9		—
	$	40.00		50	4.0		10
				103	3.9		23

A summary of stock option activity for the years ended December 31, 2016, 2015 and 2014, is as follows (in thousands, except exercise price):



	2016			2015				2014
		Weighted-				Weighted-				Weighted-
		Average				Average				Average
	Underlying	Exercise		Underlying		Exercise		Underlying		Exercise
	Shares	Price		Shares		Price		Shares		Price
Outstanding at beginning of year	103	$	37.34	758		$	20.67	1,052		$	19.90
Exercised	—	—		(655	)	18.06		(294	)	17.93
Outstanding at end of year	103	$	37.34	103		$	37.34	758		$	20.67

Exercisable at end of year	23	$	31.43	13		$	24.57	663		$	18.14

At December 31, 2016, the aggregate intrinsic value for the stock options outstanding was $990, of which $350 was exercisable at the end of the year, with weighted-average remaining contractual terms of 3.9 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 option holders exercised their options on December 31, 2016.

The total intrinsic value of options exercised for fiscal 2016, 2015 and 2014, was $0, $14,609 and $11,858, 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”) under the Company’s equity and share-based incentive compensation plans. The nonvested common stock awards are issued as common shares upon vesting. The awards granted in 2016, 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, adjusted for certain non-core and/or non-recurring items, compared to the base period, which is the fiscal year prior to the year of issuance. All other awards granted in 2016, 2015 and 2014 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 2016, 2015 and 2014 (in thousands, except fair value amounts):



	2016				2015				2014
			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	79		$	48.10	87		$	48.99	117		$	39.91
Granted	51		42.60		45		47.08		47		51.08
Vested	(100	)	45.96		(5	)	43.26		(37	)	46.48
Canceled or forfeited	—		—		(48	)	49.26		(40	)	42.14
Outstanding at end of year	30		45.93		79		48.10		87		48.99

Nonvested common stock awards vesting in 2016, 2015 and 2014 had an aggregate intrinsic value of $4,860, $245 and $2,006, 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 $1,410 at December 31, 2016. During 2016, with the exception of 40,000 performance based awards granted in 2016 to senior executives which included double-trigger change in control provisions, the change of control provisions triggered by the Merger resulted in immediate vesting of 83,000 nonvested common stock awards outstanding as of September 1, 2016, the date of the Merger.

Share-Based Compensation Expense

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



	Year Ended December 31,
	2016			2015			2014
Gross compensation costs:
Stock options	$	136		$	149		$	153
Nonvested “restricted” stock	4,038			280			1,826
Total gross compensation costs	4,174			429			1,979

Income tax benefits:
Stock options	(48		)	(52		)	(54		)
Nonvested “restricted” stock ⁽¹⁾	(782		)	(98		)	(639		)
Total income tax benefits	(830		)	(150		)	(693		)

Net compensation expense	$	3,344		$	279		$	1,286

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


⁽¹⁾	Income tax benefit on nonvested stock compensation expense for 2016 is less than the statutory rate as a portion of the expense is not tax deductible.

As of December 31, 2016, the total compensation cost related to nonvested stock options not yet recognized was $241 and is expected to be recognized over the weighted-average period of 1.6 years. As of December 31, 2016, the total compensation cost related to nonvested common stock awards not yet recognized was $1,378 and is expected to be recognized over the weighted-average period of 2.0 years.