Share Based Payments

Share Consolidation:

On May 22, 2018, we completed the consolidation of our common shares on the basis of 9.5 pre-consolidation common shares for each one post-consolidation common share (the "Share Consolidation"). Fractional interests were rounded down to the nearest whole number of common shares. Outstanding stock options, restricted share units and performance share units were similarly adjusted by the consolidation ratio.

Stock Option Plan

We have issued stock options to acquire common stock through our stock option plan of which the following are outstanding at December 31:



	2018			2017			2016
	Stock Options		Weighted Average Exercise Price $	Stock Options		Weighted Average Exercise Price $	Stock Options		Weighted Average Exercise Price $
Outstanding, beginning of the year	647,156		13.20	912,995		17.42	901,114		20.58
Granted during the year	750,467		4.97	42,625		4.60	165,460		2.67
Forfeited during the year	(105,338	)	11.67	(211,847	)	32.80	(77,629	)	6.18
Expired during the year	(1,122	)	13.78	(12,302	)	21.13	(75,950	)	34.27
Exercised during the year	(41,802	)	2.96	(84,315	)	4.07	—		—
Outstanding, end of the year	1,249,361		8.73	647,156		13.20	912,995		17.42
Options exercisable, end of the year	777,245		11.04	573,984		14.36	689,883		22.03

The following table summarizes information about the stock options outstanding and exercisable at December 31, 2018:



Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price $	Number Exercisable	Weighted Average Exercise Price $
$2.47 - $3.99	711,827	5.95	3.21	442,231	3.25
$4.84 - $7.81	335,092	3.76	7.21	132,572	7.09
$13.77 - $19.00	92,308	4.63	16.94	92,308	16.94
$20.23 - $36.96	51,777	2.71	32.29	51,777	32.29
$38.09 - $63.84	58,357	2.93	50.85	58,357	50.85
	1,249,361	4.99	8.73	777,245	11.04

Non-exercisable options vest annually over periods ranging from one to three years.

The estimated fair value of stock options issued during the year was determined using the Black Scholes Option Pricing Model using the following weighted average assumptions and fair value of options:



	2018	2017	2016
Risk-free interest rate	2.02%	1.18%	0.82%
Expected hold period to exercise	3.0 years	3.0 years	3.0 years
Volatility in the price of the Company's shares	81.15%	90.73%	94.84%
Rate of forfeiture	3.67%	3.67%	3.67%
Dividend yield	Nil	Nil	Nil
Weighted average fair value of options	$2.67	$2.65	$1.59

We use historical data to estimate the expected dividend yield and expected volatility of our stock in determining the fair value of the stock options. The risk-free interest rate is based on the Government of Canada benchmark bond yield rates in effect at the time of grant and the expected life of the options represents the estimated length of time the options are expected to remain outstanding.

Incentive Share Award Plan

Restricted Share Units

We have issued restricted share units ("RSUs") to non-employee directors through our incentive share award plan. Grants of RSUs to non-employee directors vest either on the third anniversary date from the grant date or when the director ceases to be a member of the board. We have also issued RSUs to certain officers and employees of the Company. Grants of RSUs to certain officers and employees of the Company vest over a three year period. The following RSUs are outstanding at December 31:



	2018		2017	2016
Outstanding, beginning of the year	190,407		139,237	38,823
Granted during the year	102,855		51,170	110,940
Forfeited during the year	(4,210	)	—	(10,526	)
Vested during the year	(28,297	)	—	—
Outstanding, end of the year	260,755		190,407	139,237

(1)The weighted average fair value of the RSUs granted was $3.35 in 2018 (2017 - $5.96; 2016 - $2.92).

Performance Share Units

We have also issued performance share units ("PSUs") to certain officers and employees of the Company. Grants of PSUs require completion of certain performance criteria and cliff vest after 3 years or vest over a three year period, depending on the grant. PSU grants to certain officers will vest immediately upon a change of control of the Company. If certain officers cease employment with the Company, vesting occurs on a pro rata basis prior to the third anniversary of the grant but after the first anniversary. The following PSUs are outstanding at December 31:



	2018		2017	2016
Outstanding, beginning of the year	94,734		88,419	—
Granted during the year	—		6,315	157,892
Forfeited during the year	(31,578	)	—	(69,473	)
Outstanding, end of the year	63,156		94,734	88,419

(1) The weighted average fair value of the PSUs granted was nil in 2018 (2017 - $3.33; 2016 - $3.38).

We have reserved 1,739,975 common shares for issuance relating to our outstanding equity compensation plans. Compensation expense related to stock options, RSUs and PSUs for the year ended December 31, 2018 was $1,415,833 (2017 - $578,703; 2016 - $406,078).