STOCK-BASED COMPENSATION

February

21,

2014,

the Compensation Committee of our Board of Directors approved, subject to stockholder approval, a

third

amendment (the "Third Amendment") to the

2006

Omnibus Incentive Plan (the "Incentive Plan"). The Third Amendment (i) provides that the maximum aggregate number of shares of Class A common stock available for grant of awards under the Incentive Plan from and after

May

29,

2014,

shall not exceed

750,000,

plus any remaining available shares of the

800,000

shares previously made available under the

second

amendment to the Incentive Plan (the "Second Amendment"), and any expirations, forfeitures, cancellations, or certain other terminations of shares approved for grant under the Third Amendment or the Second Amendment previously reserved, plus any remaining expirations, forfeitures, cancellations, or certain other terminations of such shares, and (ii) re-sets the term of the Incentive Plan to expire with respect to the ability to grant new awards on

March

31,

2023.

The Compensation Committee also re-approved, subject to stockholder re-approval, the material terms of the performance-based goals under the Incentive Plan so that certain incentive awards granted thereunder would continue to qualify as exempt "performance-based compensation" under Internal Revenue Code Section

162(m).

The Company's stockholders approved the adoption of the Third Amendment and re-approved the material terms of the performance-based goals under the Incentive Plan at the Company's

2014

Annual Meeting held on

May

29,

2014.

The Incentive Plan permits annual awards of shares of our Class A common stock to executives, other key employees, non-employee directors, and eligible participants under various types of options, restricted share awards, or other equity instruments. At

December

31,

2016,

619,427

of the

1,550,000

shares noted above were available for award under the amended Incentive Plan. No participant in the Incentive Plan

may

receive awards of any type of equity instruments in any calendar-year that relates to more than

200,000

shares of our Class A common stock. No awards

may

be made under the Incentive Plan after

March

31,

2023.

To the extent available, we have issued treasury stock to satisfy all share-based incentive plans.

Included in salaries, wages, and related expenses within the consolidated statements of operations is stock-based compensation expense of

$1.2

million,

$1.3

million, and

$1.3

million in

2016,

2015,

and

2014,

respectively. Included in general supplies and expenses within the consolidated statements of operations is stock-based compensation expenses for non-employee directors of

$0.2

million in

2016,

$0.2

million in

2015

and

$0.1

million in

2014.

All stock compensation expense recorded in

2016,

2015,

and

2014

relates to restricted shares granted, as

options were granted during these periods. Associated with stock compensation expense was

income tax benefit in

2016

and

2015

and

$0.8

million income tax benefit in

2014,

related to the exercise of stock options and restricted share vesting, resulting in related changes in taxable income and offsetting changes to additional paid in capital.

The Incentive Plan allows participants to pay the federal and state minimum statutory tax withholding requirements related to awards that vest or allows the participant to deliver to us shares of Class A common stock having a fair market value equal to the minimum amount of such required withholding taxes. To satisfy withholding requirements for shares that vested, certain participants elected to deliver to us

55,429,

84,138,

and

39,676

Class A common stock shares, which were withheld at weighted average per share prices of

$20.61,

$27.10,

and

$20.97

based on the closing prices of our Class A common stock on the dates the shares vested in

2016,

2015,

and

2014,

respectively, in lieu of the federal and state minimum statutory tax withholding requirements. We remitted

$1.1

million,

$2.3

million, and

$0.8

million in

2016,

2015,

and

2014,

respectively, to the proper taxing authorities in satisfaction of the employees' minimum statutory withholding requirements. The payment of minimum tax withholdings on stock compensation are reflected within the issuances of restricted shares from treasury stock in the accompanying consolidated statement of stockholders' equity.

The following table summarizes

our restricted share award activity for the fiscal years ended

December

31,

2016,

2015,

and

2014:

	Number of stock awards (in thousands)			Weighted average grant date fair value

Unvested at December 31, 2013		777		$	5.95

Granted		136		$	12.27
Vested		(137	)	$	7.43
Forfeited		(134	)	$	7.80
Unvested at December 31, 2014		642		$	6.60

Granted		63		$	28.10
Vested		(246	)	$	4.97
Forfeited		(129	)	$	5.38
Unvested at December 31, 2015		330		$	12.43

Granted		120		$	18.92
Vested		(169	)	$	5.28
Forfeited		(16	)	$	16.53
Unvested at December 31, 2016		265		$	18.63

The unvested shares at

December

31,

2016

will vest based on when and if the related vesting criteria are met for each award. All awards require continued service to vest, and

158,015

of these awards vest solely based on continued service, in varying increments between

2017

and

2019.

Performance based awards account for

107,453

of the unvested shares at

December

31,

2016,

of which

29,959

shares have

unrecognized compensation cost as the cost has been fully recognized based on the performance goals having been achieved for the year ended

December

31,

2016

and

77,494

shares relate to performance for the years ended

December

31,

2017

and

2018

and have no unrecognized compensation cost as vesting is not probable.

The fair value of restricted share awards that vested in

2016,

2015,

and

2014

was approximately

$3.5

million,

$6.5

million, and

$2.9

million, respectively. As of

December

31,

2016,

we had approximately

$3.6

million of unrecognized compensation expense related to

158,015

service-based shares, which is probable to be recognized over a weighted average period of approximately

months.

All restricted shares awarded to executives and other key employees pursuant to the Incentive Plan provide the holder with voting and other stockholder-type rights, but will not be issued until the relevant restrictions are satisfied.

The following table summarizes our stock option activity for the fiscal years ended

December

31,

2016,

2015,

and

2014:

	Number of options (in thousands)			Weighted average exercise price		Weighted average remaining contractual term (in years)		Aggregate intrinsic value (in thousands)

Outstanding at December 31, 2013		221		$	14.98		1.0	$	-

Options granted		-			-
Options exercised		(45	)	$	13.64
Options forfeited		(100	)	$	21.71
Outstanding at December 31, 2014		76		$	14.73		0.5	$	945

Options granted		-			-
Options exercised		(73	)	$	14.79
Options forfeited		-			-
Outstanding at December 31, 2015		3		$	12.79		0.4	$	15

Options granted		-			-
Options exercised		(3	)	$	12.79		-		-
Options forfeited		-			-
Outstanding at December 31, 2016		-			-		-		-

Exercisable at December 31, 2016		-			-		-		-