NOTE 14: STOCK BASED COMPENSATION

In 2007, the Board of Directors of FFI approved two equity incentive plans that provided for the grant of stock options, shares of restricted stock, restricted stock units (“RSUs”), stock bonus awards and performance awards (collectively, “Equity Incentive Awards”) to the Company’s executive officers, other key employees and directors up to 1,300,282 shares of the FFI’s common stock. In 2010, shareholders approved an increase of 580,000 in the number of shares available for issuance under one of these plans. In 2015, shareholders approved a new equity incentive plan whereby: the Company can no longer issue Equity Incentive Awards under the previously approved plans; 750,000 shares of common stock will be available for the grant of Equity Incentive Awards to the Company’s executive officers, other key employees and directors; Equity Incentive Awards that are outstanding under the prior plans will remain outstanding and unchanged and subject to the terms of those Plans; and upon termination, cancellation or forfeiture of any of the Equity Incentive Awards that are outstanding under the prior plans, those shares will be added to the pool of shares available for future grants of Equity Incentive Awards under the plan approved in 2015. The Company recognized stock-based compensation expense of $1.8 million, $0.9 million, and $0.6 million in 2017, 2016, and 2015, respectively. Included in the 2017 amount is $1.8 million of expense related to RSUs.

Stock options, when granted, have an exercise price not less than the current market value of the common stock and expire after ten years if not exercised. If applicable, vesting periods are set at the date of grant and the Plans provide for accelerated vesting should a change in control occur. The fair value of each option granted in 2015 was estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions:

Expected Volatility	20	%
Expected Term	6.5 years
Expected Dividends	None
Weighted Average Risk Free Rate:
2015 grants	1.714	%
Weighted-Average Grant Fair Value:
2015 grants	9.88

Since the Company has limited historical stock activity through December 31, 2015, the expected volatility is based on the historical volatility of similar companies that have a longer trading history. The expected term represents the estimated average period of time that the options remain outstanding. Since the Company does not have sufficient historical data on the exercise of stock options, the expected term is based on the “simplified” method that measures the expected term as the average of the vesting period and the contractual term. The risk free rate of return reflects the grant date interest rate offered for zero coupon U.S. Treasury bonds over the expected term of the options.

The following table summarizes the activities in the Plans during 2017:

(dollars in thousands except per share amounts)	Options Granted			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Balance: December 31, 2016		1,972,884		$	6.34
Options granted		—			—
Options exercised		(1,072,000	)		5.18
Options forfeited		—			—
Balance: December 31, 2017		900,884			7.73		3.37 Years	$	9,738
Options exercisable		900,884		$	7.73		3.37 Years	$	9,738

The intrinsic value of stock options exercised in 2017 was $11.7 million.

The following table summarizes the activities in the Plans during 2016:

(dollars in thousands except per share amounts)	Options Granted			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Balance: December 31, 2015		2,716,834		$	6.35
Options granted		—			—
Options exercised		(690,592	)		6.17
Options forfeited		(53,358	)		9.18
Balance: December 31, 2016		1,972,884			6.34		2.45 Years	$	15,601
Options exercisable		1,945,032		$	6.30		2.39 Years	$	15,457

The intrinsic value of stock options exercised in 2016 was $3.8 million.

The following table summarizes the activities in the Plans during 2015:

(dollars in thousands except per share amounts)	Options Granted			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Balance: December 31, 2014		2,769,616		$	6.34
Options granted		23,000			9.88
Options exercised		(62,614	)		6.47
Options forfeited		(13,168	)		8.24
Balance: December 31, 2015		2,716,834			6.35		3.52 Years	$	14,782
Options exercisable		2,599,010		$	6.23		3.30 Years	$	14,463

The intrinsic value of stock options exercised in 2015 was $0.3 million.

The following table provides a summary of the RSUs issued by the Company under its equity incentive plans for the periods ended December 31:


	2017				2016				2015
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value

Balance: January 1	117,308		$	10.19	134,728		$	9.93	8,888		$	9.00
New RSUs	110,463			17.62	50,568			11.15	147,364			10.00
Shares vested and issued	(78,005	)		12.01	(67,988	)		10.39	(21,524	)		10.00
RSUs forfeited	—			—	—			—	—			—
Balance December 31	149,766		$	14.73	117,308		$	10.19	134,728		$	9.93

The fair value of the shares vested and issued was $1.3 million, $0.8 million and $0.2 million in 2017, 2016 and 2015, respectively. As of December 31, 2017, the Company had $1.0 million of unrecognized compensation costs related to outstanding RSUs which will be recognized through February, 2019, subject to the related vesting requirements.