8. SHARED-BASED COMPENSATION

Stock Options:

The Company has issued non-qualified and incentive stock options to employees and nonemployee directors. The fair value of these options are estimated on the date of grant using the Black-Scholes option pricing model, which requires estimates of the expected term of the option, the risk-free interest rate, the expected volatility of the price of the Company’s common stock, and dividend yield. Options outstanding as of December 31, 2017 generally vest over a period of three years with an expiration term of ten years. The exercise price of these options ranges from $24.26 to $44.73. Due to the Company’s lack of option exercise history, the expected term is calculated using the simplified method defined as the midpoint between the vesting period and the contractual term of each option. The risk free interest rate is based on the United States Treasury yield curve in effect on the date of grant that most closely corresponds to the expected term of the option. The expected volatility is based on the historical volatility of the Company’s common stock over the period of time equivalent to the expected term for each award. The dividend yield is computed as the annualized dividend rate at the grant divided by the strike price of the stock option. The weighted average input assumptions used for the years ended December 31, 2017, 2016 and 2015 were as follows:


	2017	2016	2015

Expected term (in years)	6	6	6
Risk-free interest rate	2.05%	1.11%	1.71%
Expected volatility	38.33%	42.22%	50.91%
Dividend yield	2.40%	3.56%	-

The number of stock options and weighted-average exercise prices as of December 31, 2017 and 2016 are as follows:


	2017			2016
	Shares	Weighted-Average Exercise Price		Shares	Weighted-Average Exercise Price
(shares in thousands)
Outstanding at beginning of period	129	$	28.22	98	$	28.17
Granted	38		44.73	50		27.99
Exercised	(27)		27.34	(12)		25.64
Forfeited	(31)		38.64	(6)		29.87
Expired	(3)		30.13	(1)		31.55
Outstanding at end of the period	106	$	31.18	129	$	28.22
Exercisable at end of the period	54	$	28.15	49	$	27.45

As of December 31, 2017, the weighted-average remaining contractual life was 7.64 years with an aggregate intrinsic value of $4.1 million for outstanding stock options and the weighted-average remaining contractual life was 6.96 years with an aggregate intrinsic value of $2.2 million for exercisable options. The weighted-average grant date fair value of options granted during the year ended December 31, 2017 and 2016 were $13.73 and $7.91, respectively. The unrecognized compensation expense calculated under the fair value method for shares expected to vest as of December 31, 2017 was $307 thousand and is expected to be recognized over a weighted average period of 1.66 years. The Company received $568 thousand and $299 thousand in cash proceeds from the exercise of stock options during the years ended December 31, 2017 and 2016, respectively. The total intrinsic value of options exercised during the years ended December 31, 2017 and 2016 was $603 thousand and $69 thousand, respectively.

Restricted Stock:

The Company has issued restricted stock to employees and nonemployee directors generally with vesting terms up to five years after the date of grant. The fair value is equal to the market price of the Company’s common stock on the date of grant. Expense for restricted stock is amortized ratably over the vesting period. A summary of outstanding restricted stock and award activity as of December 31, 2017 and 2016 are as follows:


	2017			2016
	Shares	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value
(shares in thousands)
Outstanding at beginning of period	215	$	27.69	264	$	26.38
Granted	44		44.73	92		30.61
Vested	(120)		28.27	(102)		27.42
Forfeited	(10)		37.77	(39)		26.43
Outstanding at end of the period	129	$	32.15	215	$	27.69

The total fair value of restricted stock awards vested during the years ended December 31, 2017, 2016, and 2015 were $6.8 million, $3.5 million, and $3.9 million, respectively.

The total share-based compensation charged against income during the years ended December 31, 2017, 2016, and 2015 was $4.3 million, $3.4 million, and $3.1 million, respectively. Included in share-based compensation for the year ended December 31, 2017 was $856 thousand in expense for 273,300 shares that will vest if certain market and performance conditions are achieved. Included in share-based compensation for the year ended December 31, 2016 is $0.8 million for 59,375 shares of performance awards issuable to certain key employees that vested on December 31, 2017 based on achieving the 2016 financial plan. Also included in the 2016 expense, is $0.2 million in expense for 210,000 shares that will vest if certain market and performance conditions are achieved. The grant date fair value of the market and performance awards based on the Monte Carlo Method are $0.9 million and $2.0 million for the years ended December 31, 2017 and 2016, respectively, which will be recognized evenly through December 2019.

The total income tax benefit recognized in the consolidated statements of income for restricted stock awards was $2.1 million, $1.2 million and $1.0 million for the years ended December 31, 2017, 2016, and 2015, respectively. The excess tax benefits from share-based compensation recognized in additional paid-in capital for the years ended December 31, 2016 and 2015 was $230 thousand and $247 thousand, respectively.

There was $2.0 million of total unrecognized compensation cost related to restricted stock awards as of December 31, 2017, which is expected to be recognized over a weighted-average period of 1.63 years. There was $1.8 million of unrecognized compensation cost related to the 273,300 market and performance award shares discussed above as of December 31, 2017, which is expected to be recognized over a weighted-average period of 2.00 years.