Stock-Based Compensation

Stock Options:

A summary of option activity under our 1998 Stock Option Plan as of December 31, 2016, and changes during the nine months ended September 30, 2017 is presented below.



	Number of Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2016	350,186		$	19.45	4.25	$	4,453
Granted	32,750		28.15
Exercised	(25,580	)	20.19			271
Outstanding, September 30, 2017	357,356		$	20.19	4.18	$	3,050
Exercisable, September 30, 2017	307,108		$	19.19	3.44	$	2,946

The following table summarizes information about our stock options outstanding at September 30, 2017:



Range of Exercise Prices	Options Outstanding				Options Exercisable
Range of Exercise Prices	Shares	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
$0.01-15.70	65,852	1.81	$	9.82	65,852	$	9.82
$15.71-17.81	72,750	2.04	17.53		72,750	17.53
$17.82-20.48	86,836	2.59	19.60		86,836	19.60
$20.49-33.36	131,918	7.58	27.23		81,670	27.79
	357,356	4.18	$	20.19	307,108	$	19.19

The summary of the status of our unvested stock options as of December 31, 2016 and changes during the nine months ended September 30, 2017 is presented below.



Unvested stock options:	Shares		Weighted Average Grant Date Fair Value Per Share
Unvested at December 31, 2016	50,833		$	12.67
Granted	32,750		11.93
Vested	(33,335	)	13.80
Unvested at September 30, 2017	50,248		$	11.44

As of September 30, 2017, there was $349,134 of unrecognized compensation cost related to unvested options. Such cost is expected to be recognized over a weighted-average period of two years. Total compensation expense for stock options was $286,500 and $388,732 for the nine months ended September 30, 2017 and 2016, respectively.

Restricted Shares/Units:

In accordance with the Company's employment agreement with Stephen Taylor, the Company's Chief Executive Officer, the Compensation Committee reviewed his performance in determining the issuance of restricted common stock. Based on this review which included consideration of the Company's 2016 performance, Mr. Taylor, was awarded 70,464 restricted shares/units on February 14, 2017, which vest over three years, in equal installments, beginning February 14, 2018. On March 23, 2017, the Compensation Committee awarded 20,000 restricted shares/units to each of G. Larry Lawrence, our CFO, and James Hazlett, our Vice President of Technical Services. The restricted shares to Messrs. Lawrence and Hazlett vest over three years, in equal installments, beginning March 23, 2018. We also awarded and issued 15,968 shares of restricted common stock to our Board of Directors as partial payment for 2017 directors' fees. The restricted stock issued to our directors vests over one year, in quarterly installments, beginning March 31, 2018. Total compensation expense related to restricted awards was $2,945,020 and $1,350,427 for the nine months ended September 30, 2017 and 2016, respectively. As of September 30, 2017, there was a total of $2,114,256 of unrecognized compensation expense related to these shares/units which is expected to be recognized over the next two years.