17. Stock Compensation

Overview

We are currently authorized to grant and have available for grant the following number of shares under our stock plans as of December 31, 2017 and 2016:



	Authorized	Available for Grant
Plan	Shares	2017	2016
1996 Discounted Employee Stock Purchase Plan, as amended	1,900,000	377,000	469,000
2009 Equity and Cash Incentive Plan	7,100,000	1,422,000	2,194,000
Total	9,000,000	1,799,000	2,663,000

Upon the exercise of stock options or grants of RSAs, PSAs, RSUs, or PSUs, we may issue the required shares out of authorized but unissued common stock or out of treasury stock, at our discretion.

Stock Awards

In 2017 the Compensation Committee of our Board of Directors (the “Committee”) authorized awards from approved stock incentive plans of RSAs to non-employee directors, RSUs to certain employees, and RSAs and PSUs to certain Company officers, which, counting PSUs at target levels, together totaled 426,000 shares and had an aggregate grant date market value of $7.1 million. The PSUs granted in 2017 represented the right to receive from 60% to 150% of the target number of shares of common stock. The performance component of PSU awards granted in 2016 was based on attaining specified levels of adjusted EBITDA, adjusted inventory levels, and adjusted trade accounts receivable days’ sales outstanding, each as defined in the PSU grant documents, for the 2016 calendar year. The PSUs granted in 2017 earned 92% of the target number of shares.

In 2016 the Committee authorized awards from approved stock incentive plans of RSAs to non-employee Directors, RSUs to certain employees, and RSAs and PSUs to certain Company officers, which, counting PSUs at target levels, together totaled 490,000 shares of common stock and had an aggregate grant date market value of $5.5 million. The PSUs granted in 2016 earned approximately 142% of the target number of shares.

In 2015 the Committee authorized awards from approved stock incentive plans of RSAs to non-employee Directors, RSUs to certain employees, and RSAs, PSAs, and PSUs to certain Company officers, which, counting PSUs at target levels, together totaled 405,000 shares of common stock and had an aggregate market value of $4.3 million. The PSUs granted in 2015 earned approximately 127% of the target number of shares.

A summary of stock grant activity for the years ended December 31, 2017, 2016, and 2015 for RSAs, PSAs, RSUs, and PSUs, based on the target number of shares, is as follows:


		Weighted
		Average
		Grant Date
RSAs	Shares	Fair Value
Unvested at December 31, 2014	495,000	$	7.65
Granted	207,000		10.33
Vested	(278,000)		8.10
Forfeited	(110,000)		8.49
Unvested at December 31, 2015	314,000		9.31
Granted	216,000		10.84
Vested	(138,000)		7.92
Forfeited	--		--
Unvested at December 31, 2016	392,000		10.64
Granted	138,000		17.00
Vested	(129,000)		10.84
Forfeited	(18,000)		11.78
Unvested at December 31, 2017	383,000		12.81


		Weighted
		Average
		Grant Date
PSAs	Shares	Fair Value
Unvested at December 31, 2014	250,000	$	10.18
Granted	--		--
Vested	--		--
Forfeited	--		--
Unvested at December 31, 2015	250,000		10.18
Granted	--		--
Vested	--		--
Forfeited	--		--
Unvested at December 31, 2016	250,000		10.18
Granted	--		--
Vested	(250,000)		10.18
Forfeited	--		--
Unvested at December 31, 2017	-		--


		Weighted
		Average
		Remaining		Aggregate
		Contractual		Intrinsic
RSUs	Shares	Term in years		Value
Unvested at December 31, 2014	61,000		1.21	$	687,000
Granted	88,000
Vested	(36,000)
Forfeited	(10,000)
Unvested at December 31, 2015	103,000		1.17		1,110,000
Granted	146,000
Vested	(44,000)
Forfeited	(27,000)
Unvested at December 31, 2016	178,000		1.24		3,405,000
Granted	196,000
Vested	(64,000)
Forfeited	(24,000)
Unvested at December 31, 2017	286,000		1.26		5,477,000

Vested and expected to vest	286,000		1.26	$	5,477,000


		Weighted
		Average
		Remaining		Aggregate
		Contractual		Intrinsic
PSUs	Shares	Term in years		Value
Unvested at December 31, 2014	257,000		0.73	$	2,907,000
Granted	125,000
Vested	(139,000)
Forfeited	(108,000)
Unvested at December 31, 2015	135,000		0.74		1,455,000
Granted	144,000
Vested	(83,000)
Forfeited	(8,000)
Unvested at December 31, 2016	188,000		0.77		3,603,000
Granted	126,000
Vested	(128,000)
Forfeited	(17,000)
Unvested at December 31, 2017	169,000		0.71		3,236,000

Vested and expected to vest	169,000		0.71	$	3,236,000

During the years ended December 31, 2017, 2016, and 2015, the total fair value of $11.1 million, $2.9 million, and $4.8 million, respectively, in combined RSAs, PSAs, RSUs, and PSUs vested.

Stock Options

The Compensation Committee of our Board of Directors authorized grants of stock options from approved stock incentive plans to certain Company officers and employees totaling 260,000, 387,000, and 328,000 shares in 2017, 2016, and 2015, respectively, with exercise prices equal to the stock prices on the respective grant dates.

A summary of our stock option activity for the years ended December 31, 2017, 2016, and 2015 is as follows:



				Weighted
				Average
		Weighted		Remaining		Aggregate
		Average		Contractual		Intrinsic
	Shares	Exercise Price		Term in years		Value
Outstanding at December 31, 2014	2,021,000	$	7.43		3.54	$	8,021,000
Granted	328,000		10.83
Exercised	(248,000)		7.42
Forfeited	(112,000)		9.93
Expired	(93,000)		12.08
Outstanding at December 31, 2015	1,896,000		7.65		3.31		5,992,000
Granted	387,000		10.34
Exercised	(372,000)		5.60
Forfeited	--		--
Expired	--		--
Outstanding at December 31, 2016	1,911,000		8.59		3.55		20,179,000
Granted	260,000		16.30
Exercised	(394,000)		6.30
Forfeited	(31,000)		12.47
Expired	(5,000)		7.01
Outstanding at December 31, 2017	1,741,000		10.19		3.64		15,598,000

Vested and expected to vest	1,741,000	$	10.19		3.64	$	15,598,000
Exercisable at December 31, 2017	1,167,000	$	8.81		2.76	$	12,057,000

Other information concerning stock options for the years ended December 31 is as follows:



	2017		2016		2015
Weighted-average fair value of options granted	$	5.97	$	3.68	$	3.82
Intrinsic value of options exercised		4,748,000		2,422,000		761,000

Employees purchased common stock totaling 93,000, 90,000, and 78,000 shares in 2017, 2016, and 2015, respectively, through our ESPP.

Stock Compensation Expense

The following weighted‑average assumptions were used to determine the fair value of options:



	2017		2016		2015
	Stock	ESPP	Stock	ESPP	Stock	ESPP
	Options	Options	Options	Options	Options	Options
Expected life of options	4.75 Years	0.5 Years	4.75 Years	0.5 Years	4.5 Years	0.5 Years
Expected stock price volatility	0.40	0.39	0.40	0.30	0.44	0.32
Dividend yield	--%	--%	--%	--%	1.12%	1.06%
Risk-free interest rate	1.87%	0.85%	1.20%	0.43%	1.41%	0.12%

The following table summarizes stock compensation expense (in thousands):



	2017		2016		2015
RSA, PSA, RSU, and PSU expense	$	5,335	$	4,966	$	3,955
Stock option and ESPP option expense		1,978		1,636		1,371
Total stock compensation expense	$	7,313	$	6,602	$	5,326

Included in the total stock compensation expense, as applicable in each period, were expenses related to RSAs, PSAs, RSUs, PSUs, and stock options issued in each respective year, as well as those issued in prior periods that continue to vest during the period, and compensation related to our ESPP. These amounts were recorded as stock compensation expense and were subject to or normal allocation of expenses to inventory costs and deferred preservation costs. We capitalized $394,000, $274,000 and $237,000 in the years ended December 31, 2017, 2016, and 2015, respectively, of the stock compensation expense into our inventory costs and deferred preservation costs.

As of December 31, 2017 we had total unrecognized compensation costs of $6.1 million related to RSAs, PSAs, RSUs, and PSUs and $1.6 million related to unvested stock options. As of December 31, 2017 this expense is expected to be recognized over a weighted-average period of 1.9 years for RSUs, 1.5 years for stock options, 1.1 years for RSAs, and 0.7 years for PSUs.