11.

Stock Incentive Plans

The Company’s 2015 Stock Incentive Plan (the “2015 Plan”), which provides for stock-based awards to Company employees, non-employee directors and outside consultants or advisors, was approved by stockholders on May 27, 2015. The number of shares of common stock reserved for issuance under the 2015 Plan is 1,000,000, of which the maximum number of shares for which incentive stock options may be granted is 900,000. The 2015 Plan replaced the Company’s 2009 Stock Incentive Plan (the “2009 Plan”). The Company granted 8,000 and 56,425 restricted stock units during the year ended December 31, 2015 under the 2009 and 2015 Plans, respectively. No new awards may be granted under the 2009 Plan. At December 31, 2015, there were option awards covering 360,100 shares outstanding under the 2009 Plan and its predecessor plans. Outstanding options under all the plans generally expire ten years after the date of grant. Options are generally exercisable in four equal annual installments beginning one year after the date of grant. At December 31, 2015, there were also 150,811 restricted stock units outstanding, which are settled in an equal number of shares of common stock upon vesting.

The Company recognizes compensation expense for stock-based awards under its stock incentive plans based on the grant-date fair value. Compensation expense is attributed to earnings using the straight-line method over the requisite service period.

A summary of the status of the Company’s stock options at December 31, 2015, 2014 and 2013, together with changes during the periods then ended, is presented below:


	Number of options			Weighted average exercise price
Outstanding at December 31, 2012		538,697
Options exercised		(138,298	)	$	13.53
Outstanding at December 31, 2013		400,399
Options exercised		(32,866	)		13.24

Outstanding at December 31, 2014		367,533
Options granted at market price		50,000			29.99
Options exercised		(48,183	)		14.59
Options cancelled		(9,250	)		15.20

Outstanding at December 31, 2015		360,100

Available for grant at December 31, 2015		943,575

The following tables present information on stock options exercised and outstanding:


	Year Ended
	December 31,
(in thousands)	2015		2014
Intrinsic value of options exercised in the period	$	1,105	$	1,025


($ in thousands, except share data)	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Stock options:
Outstanding December 31, 2015		360,100	$	17.35		5.42	$	9,430
Exercisable at December 31, 2015		208,227		14.71		4.61		6,003

The aggregate intrinsic value of stock options represents the difference between the Company’s closing stock price at the end of the period and the relevant exercise price multiplied by the number of options outstanding at the end of the period at each such price.

The fair value of stock option awards as determined under the Black-Scholes option-pricing model was estimated with the following weighted-average assumptions:


	2015
Expected volatility		48.7	%
Risk free interest rate		1.4	%
Expected dividend yield		2.9	%
Expected term		6.3 years
Weighted average fair value per share	$	10.76

There were no options granted below market price during 2015. There were no options granted during 2014 or 2013.

During 2015, 2014 and 2013, the Company granted 64,425, 69,371 and 44,970 restricted stock units at a weighted average grant date fair value of $37.79, $50.47 and $50.28 per share, respectively. The restricted stock units vest in four equal annual installments beginning one year following the date of grant.

The following table presents restricted stock unit activity:


	Units			Weighted Average Grant Date Fair Value
Non-vested at December 31, 2012		47,500		$	21.44

Granted		44,970			50.28
Vested		(10,302	)		21.44
Cancelled/Forfeited		(1,573	)		21.44

Non-vested at December 31, 2013		80,595			37.53

Granted		69,371			50.47
Vested		(15,253	)		33.40
Cancelled/Forfeited		(7,867	)		34.90

Non-vested at December 31, 2014		126,846			44.99

Granted		64,425			37.79
Vested		(28,728	)		41.09
Cancelled/Forfeited		(11,732	)		43.87

Non-vested at December 31, 2015		150,811			42.74

The following table summarizes stock-based compensation expense related to stock option and restricted stock unit awards (in thousands):


	Year Ended December 31,
	2015		2014		2013
Stock-based compensation expense included in selling, general and administrative expenses	$	2,386	$	1,699	$	1,016
Deferred income taxes		948		675		404

Stock-based compensation expense related to stock options and restricted stock units, net of tax	$	1,438	$	1,024	$	612

As of December 31, 2015, unrecognized compensation expense related to stock options and restricted stock units was $6.2 million with a weighted average remaining contractual period of 2.74 years.

The following table summarizes information about stock options outstanding at December 31, 2015:


Options outstanding						Options exercisable
Exercise price range	Number of shares		Weighted- average exercise price		Weighted- average remaining contractual life (years)	Exercisable at December 31, 2015		Weighted- average exercise price
$2.05		1,125	$	2.05	Indefinite		1,125	$	2.05
$ 8.82 - 29.99		358,975		17.40	5.4		207,102		14.78

		360,100		17.35			208,227		14.71