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, 2017, we have no outstanding options under our 2000 Stock Option Plan.

Stock Options

The Company expensed $399,000, $485,000, and $549,000, for the years ended December 31, 2017, 2016 and 2015, respectively.

The estimated fair value of the options granted during 2017 and prior years was calculated using the Black-Scholes options pricing model. There were 11,500, 121,500 and 83,000 options granted during 2017, 2016 and 2015, respectively. The options will vest, in equal installments, over a five-year period. The fair value of each stock option granted in 2017, 2016 and 2015, was estimated on the date of grant using the following weighted-average assumptions.


	For the Year Ended December 31,
	2017		2016		2015
Dividend yield		2.2%		2.9%		2.5%
Volatility		29.6%		33.1%		47.7%
Risk-free interest rate		1.8%		1.2%		1.5%
Expected life		5.6 years		5.6 years		6.1 years
Weighted average grant date fair value		$5.17		$3.96		$5.83

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. In connection with the adoption of ASU 2016-09, the Company elected to account for forfeitures as they occur, rather than to estimate forfeitures over the vesting period.

The following table presents option activity under the Company’s stock option plans as of and for the year ended December 31, 2017.


	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, 2017		876		$ 11.88
Granted		12		21.99
Exercised		(283)		9.48
Forfeited or expired		(17)		15.69

Outstanding at December 31, 2017		588		$ 13.12		5.17		$ 6,137

Vested or expected to vest at December 31, 2017		560		$ 12.96		5.03		$ 5,942
Exercisable at December 31, 2017		383		$ 11.46		3.90		$ 4,640

The total intrinsic value of options exercised during the years ended December 31, 2017, 2016 and 2015 was $3.8 million, $3.9 million and $2.1 million, respectively.

As of December 31, 2017, there was a total of $736,000 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 2.6 years. The total fair value of options vested was $505,000, $489,000 and $524,000 during 2017, 2016 and 2015, respectively. Cash received from stock option exercises was $2.7 million, $5.2 million and $5.1 million, in 2017, 2016 and 2015, respectively.

At December 31, 2017, options for the purchase of 587,915 shares of the Company’s common stock were outstanding under the above plans, of which options to purchase 383,315 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 73,000, 166,500 and 97,000 restricted stock awards during 2017, 2016 and 2015 respectively. The weighted average grant date fair value of restricted stock awards granted in 2017, 2016 and 2015 was $21.59 per share, $16.89 per share and $16.07 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 $2.6 million, $2.3 million and $2.2 million during the years ended December 31, 2017, 2016 and 2015, respectively. Total unrecognized compensation cost related to restricted stock awards was $4.6 million at December 31, 2017.

The table below summarizes activity related to the Company’s non-vested restricted shares for the year ended December 31, 2017.


	Shares		Weighted Average Fair Value
	(In thousands)

Nonvested at January 1, 2017		460		$ 15.43
Granted		73		21.59
Vested		(150)		14.98
Forfeited		(7)		14.49

Nonvested at December 31, 2017		376		$ 16.82

Under the 2008 Equity Incentive Plan, 583,192 shares of common stock were available for the granting of future options and restricted stock awards as of December 31, 2017.