9 .	Share-based Compensation

The Company has

one

active stock incentive plan for employees and directors, the

2007

Stock Incentive Plan, which provides for awards of stock options to purchase shares of common stock, stock appreciation rights, restricted and unrestricted shares of common stock, restricted stock units (“RSUs”), and performance share awards (“PSAs”).

The Company recognizes the compensation cost of employee and director services received in exchange for awards of equity instruments based on the grant date estimated fair value of the awards. The Company estimates the fair value of RSUs and PSAs using the value of the Company’s stock on the date of grant. Share-based compensation cost is recognized over the period during which the employee or director is required to provide service in exchange for the award and, as forfeitures occur, the associated compensation cost recognized to date is reversed. For awards with performance-based payout conditions, the Company recognizes compensation cost based on the probability of achieving the performance conditions, with changes in expectations recognized as an adjustment to earnings in the period of change. Any recognized compensation cost is reversed if the conditions are ultimately

not

met.

The following table summarizes share-based compensation expense recorded (in thousands):

	Three Months Ended March 31,
	2020		2019

Cost of sales	$	142	$	6
Selling, general, and administrative expense		318		16
Total	$	460	$	22

Stock Option Awards

The Company’s stock incentive plan provides that options become exercisable according to vesting schedules, which range from immediate to ratably over a

-month period. Options terminate

ten

years from the date of grant. During the

three

months ended

March

31,

2020,

24,000

stock options at a weighted average exercise price of

$24.15

were exercised. As of

March

31,

2020,

there were

stock options outstanding.

Restricted Stock Units and Performance Share Awards

The Company’s stock incentive plan provides for equity instruments, such as RSUs and PSAs, which grant the right to receive a specified number of shares over a specified period of time. RSUs are service-based awards and vest according to vesting schedules, which range from immediate to ratably over a

three

-year period. PSAs are service-based awards that vest according to the terms of the grant and have performance-based payout conditions.

The following table summarizes the Company’s RSU and PSA activity:

	Number of RSUs and PSAs (1)			Weighted-Average Grant Date Fair Value
Unvested RSUs and PSAs as of December 31, 2019		85,170		$	23.56
RSUs and PSAs granted		97,834			26.61
Unvested RSUs and PSAs canceled		(3,752	)		23.56
RSUs and PSAs vested (2)		(49,680	)		23.56
Unvested RSUs and PSAs as of March 31, 2020		129,572			25.86

	( 1 )	The number of PSAs disclosed in this table are at the target level of 100%.

	( 2 )	For the PSAs vested on March 31, 2020, the actual number of common shares that were issued was determined by multiplying the PSAs by a payout percentage of 136%, based on the performance-based conditions achieved.

The unvested balance of RSUs and PSAs as of

March

31,

2020

includes approximately

91,000

PSAs at a target level of performance. The vesting of these awards is subject to the achievement of specified performance-based conditions, and the actual number of common shares that will ultimately be issued will be determined by multiplying this number of PSAs by a payout percentage ranging from

200%.

As of

March

31,

2020,

unrecognized compensation expense related to the unvested portion of the Company’s RSUs and PSAs was

$4.2

million, which is expected to be recognized over a weighted-average period of

2.0

years.