9. Stock Options and Restricted Stock Awards

Stock Options

The 2006 Plan provides for the grant of non-qualified stock options to directors and eligible employees, as defined in the 2006 Plan. As of December 31, 2016, a total of approximately 899,000 of Holdings' shares of common stock were reserved for issuance under the 2006 Plan. The number of options to be granted and the terms thereof were approved by Holdings' board of directors. The option price for each share of common stock subject to an option may be greater than or equal to the fair market value of the stock at the date of grant. The stock options generally vest ratably over a five year period and expire 10 years from the date of grant, if not previously exercised.

In September 2009, the Company's board of directors and stockholders adopted and approved the 2009 Plan. The 2009 Plan provides for the grant of approximately 1,500,000 incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, deferred stock units, restricted stock units, other stock units and performance shares.

A summary of stock option activity and weighted average exercise price is as follows:


	For The Year Ended December 31,
	2016				2015				2014
				Weighted				Weighted				Weighted
	Options			Average	Options			Average	Options			Average
	(Amounts in			Exercise	(Amounts in			Exercise	(Amounts in			Exercise
	Thousands)			Price	Thousands)			Price	Thousands)			Price
Outstanding, beginning of period	650		$	12.70	684		$	11.43	647		$	8.80
Granted	285			20.03	40			26.49	121			22.97
Exercised	(380	)		8.77	(44	)		8.51	(66	)		6.90
Forfeited/Cancelled	(150	)		17.40	(30	)		10.53	(18	)		9.26
Outstanding, end of period	405		$	19.71	650		$	12.70	684		$	11.43

The following table summarizes stock options outstanding and exercisable at December 31, 2016:


		Outstanding				Exercisable
			Weighted				Weighted
			Average		Weighted		Average		Weighted
			Remaining		Average		Remaining		Average
			Contractual		Exercise		Contractual		Exercise
	Exercise Price	Options	Life in Years		Price	Options	Life in Years		Price

$	4.46- $8.91	30,453	5.50	$	7.18	28,578	5.40	$	7.07
$	10.00- $35.00	374,304	8.80		20.72	56,728	7.40		22.99
		404,757	8.5	$	19.71	85,306	6.80	$	17.66

The Company historically used the Black-Scholes option pricing model to estimate the fair value of its stock based payment awards under its 2006 Plan, but beginning October 28, 2009 under its 2009 Plan it began using an enhanced Hull-White Trinomial model. The determination of the fair value of stock-based payments utilizing the Black-Scholes model and the Enhanced Hull-White Trinomial model is affected by Holdings' stock price and a number of assumptions, including expected volatility, risk-free interest rate, expected term, expected dividend yield, expected forfeiture rate, expected turn-over rate, and the expected exercise multiple. Holdings did not have a history of market prices of its common stock as it was not a public company prior to the IPO, and as such management estimates volatility based on the volatilities of a peer group of publicly traded companies. The expected term of options is based on the Company's estimate of when options will be exercised in the future. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of the Company's awards. The dividend assumption is based on the Company's history and expectation of not paying dividends. The expected turn-over rate represents the expected forfeitures due to employee turnover and is based on historical rates experienced by the Company. The expected exercise multiple represents the mean ratio of the stock price to the exercise price at which employees are expected to exercise their options.

The weighted-average estimated fair value of employee stock options granted as calculated using the Enhanced Hull-White Trinomial model and the related assumptions follow:


		For the Year Ended December 31,
		2016			2015			2014
		Grants			Grants			Grants
Weighted average fair value	$	9.32		$	9.18		$	10.69
Risk-free discount rate		1.70%- 2.02%			2.29	%		2.12% - 2.73%
Expected life		8.20 years			8.20 years			7.70-8.20 years
Dividend yield		—			—			—
Volatility		47	%		47	%		47	%
Expected turn-over rate		2	%		2	%		5	%
Expected exercise multiple		2.2			2.2			2.2

Stock option compensation expense, for continuing operations, totaled $0.6 million, $0.6 million and $0.5 million for the years ended December 31, 2016, 2015 and 2014, respectively. As of December 31, 2016, there was $2.4 million of total unrecognized compensation cost that is expected to be recognized over a period of five years.

The intrinsic value of vested and outstanding stock options was $1.5 million and $1.9 million, $5.9 million and $7.0 million and $6.3 million and $8.8 million as of December 31, 2016, 2015 and 2014, respectively.

The intrinsic value of stock options exercised during the year ended December 31, 2016, 2015 and 2014 was $3.9 million, $0.9 million and $1.0 million, respectively.

There were approximately 380,000, 44,000 and 66,000 stock options exercised in 2016, 2015 and 2014 respectively. For 2016 and 2015, none of the options exercised were issued as part of a cashless exchange. For 2014, 26,000 of the options exercised were issued as part of a cashless exchange.

The Company recognized an excess tax benefit from the exercise of stock options of $1.1 million, $0.3 million and $0.8 million for 2016, 2015 and 2014, respectively, as a credit to additional paid-in capital rather than a reduction of income tax expense.

Restricted Stock Awards

In 2016, management awarded 108,000 shares of restricted stock awards under the 2009 Plan with a weighted average grant date fair value of $21.14 per share. As of December 31, 2016, $1.6 million of unearned compensation related to unvested awards of restricted stock will be recognized over the remaining vesting terms of the awards.

The following table summarizes the status of unvested restricted stock awards outstanding at December 31, 2016, 2015 and 2014:


	For The Year Ended December 31,
	2016				2015				2014
	Restricted			Weighted	Restricted			Weighted				Weighted
	Stock			Average	Stock			Average	Restricted			Average
	Awards			Grant	Awards			Grant	Stock Awards			Grant
	(Amounts in			Date Fair	(Amounts in			Date Fair	(Amounts			Date Fair
	Thousands)			Value	Thousands)			Value	in Thousands)			Value
Unvested restricted stock awards, beginning
of period	84		$	18.91	79		$	15.16	70		$	9.13
Awarded	108			21.14	58			23.32	36			22.75
Vested	(20	)		24.12	(38	)		17.02	(22	)		10.34
Forfeited	(69	)		17.17	(15	)		21.46	(5	)		6.66
Unvested restricted stock awards, end of
period	103		$	20.84	84		$	18.91	79		$	15.16

The fair market value of restricted stock awards that vested during the year ended December 31, 2016 was $0.4 million.

Restricted stock award compensation expense, for continuing operations, totaled $0.5 million, $0.9 million and $0.3 million for the years ended December 31, 2016, 2015 and 2014, respectively.

Shares available under the 2009 Plan were 598,442, as of December 31, 2016. The Company cannot issue any further grants under the 2006 Plan.