NOTE G — CAPITAL STOCK

Long-term incentive plan

The Company’s Amended and Restated 2000 Long-Term Incentive Plan (the “Plan”) provides for the granting of awards of up to 4,850,000 shares of common stock. These shares of the Company’s common stock are available for grants to directors, officers, employees, consultants and service providers and affiliates in the form of stock options or other equity-based awards. The Plan authorizes the Board of Directors of the Company, or a duly appointed committee thereof, to issue incentive stock options, non-qualified options, restricted stock, performance based awards and other stock-based awards. Options that have been granted under the Plan expire over a range of five to ten years from the date of grant and vest over a range of up to five years from the date of grant. Shares of restricted stock that have been granted under the Plan vest over a range of up to four years from the date of grant. Performance based awards that have been granted under the Plan vest after three years based upon the attainment of specified performance goals. As of December 31, 2015, there were 604,460 shares available for the grant of awards.

Cash dividends

Dividends were declared in 2015 and 2014 as follows:


Dividend per share	Date declared	Date of record	Payment date
$0.0375	October 31, 2013	January 31, 2014	February 14, 2014
$0.0375	March 11, 2014	May 1, 2014	May 15, 2014
$0.0375	June 19, 2014	August 1, 2014	August 15, 2014
$0.0375	July 29, 2014	October 31, 2014	November 14, 2014
$0.0375	November 5, 2014	January 30, 2015	February 13, 2015
$0.0375	March 4, 2015	May 1, 2015	May 15, 2015
$0.0375	June 10, 2015	July 31, 2015	August 14, 2015
$0.0425	August 4, 2015	October 30, 2015	November 13, 2015
$0.0425	November 3, 2015	February 1, 2016	February 15, 2016

On March 3, 2016, the Board of Directors declared a quarterly dividend of $0.0425 per share payable on May 16, 2016 to shareholders of record on May 2, 2016.

Stock repurchase program

On April 30, 2013, Lifetime’s Board of Directors authorized the repurchase of up to $10.0 million of the Company’s common stock. The repurchase authorization permits the Company to effect repurchases from time to time through open market purchases and privately negotiated transactions. During the year ended December 31, 2013, the Company repurchased 245,575 shares for a total cost of $3.2 million and thereafter retired the shares. No shares were repurchased during the years ended December 31, 2015 and 2014.

Preferred stock

The Company is authorized to issue 100 shares of Series A Preferred Stock and 2,000,000 shares of Series B Preferred Stock, none of which has been issued or is outstanding at December 31, 2015.

Stock options

A summary of the Company’s stock option activity and related information for the three years ended December 31, 2015, is as follows:


	Options			Weighted- average exercise price		Weighted- average remaining contractual life (years)		Aggregate intrinsic value
Options outstanding at December 31, 2012		2,528,177			13.06
Grants		390,800			12.26
Exercises		(247,827	)		4.91
Cancellations		(68,000	)		16.89
Expirations		(231,500	)		22.46

Options outstanding at December 31, 2013		2,371,650			12.75
Grants		394,400			18.83
Exercises		(365,223	)		8.63
Cancellations		(32,200	)		12.23
Expirations		(42,000	)		26.61

Options outstanding at December 31, 2014		2,326,627			14.19
Grants		89,600			13.99
Exercises		(110,375	)		8.84
Cancellations		(37,750	)		15.57
Expirations		(25,900	)		26.60

Options outstanding at December 31, 2015		2,242,202			14.28		5.1		3,715,000

Options exercisable at December 31, 2015		1,725,944		$	13.85		4.3	$	3,551,000

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that would have been received by the option holders had all option holders exercised their in-the-money stock options on December 31, 2015. The intrinsic value is calculated for each in-the-money stock option as the difference between the closing price of the Company’s common stock on December 31, 2015 and the exercise price.

The total intrinsic values of those stock options that were exercised in the years ended December 31, 2015, 2014, and 2013 were $639,000, $3,103,000 and $1,997,000, respectively. The intrinsic value of a stock option that is exercised is calculated at the date of exercise.

Total unrecognized stock option compensation expense at December 31, 2015, before the effect of income taxes, was $3.1 million and is expected to be recognized over a weighted-average period of 2.0 years.

The Company values stock options using the Black-Scholes option valuation model. The Black-Scholes option valuation model, as well as other available models, was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. The Black-Scholes option valuation model requires the input of highly subjective assumptions including the expected stock price volatility and risk-free interest rate. Because the Company’s stock options have characteristics significantly different from those of traded options, changes in the subjective input assumptions can materially affect the fair value estimates of the Company’s stock options. The weighted-average per share grant date fair value of stock options granted during the years ended December 31, 2015, 2014, and 2013 was $4.68, $9.73 and $6.12, respectively.

The fair values for these stock options were estimated at the dates of grant using the following weighted-average assumptions:


	2015			2014			2013
Historical volatility		39	%		58	%		61	%
Expected term (years)		5.2			6.0			5.6
Risk-free interest rate		1.67	%		1.95	%		0.88	%
Expected dividend yield		1.18	%		0.77	%		0.97	%

Restricted Stock

A summary of the Company’s restricted stock activity and related information for the three years ended December 31, 2015 is as follows:


	Restricted Shares			Weighted- average grant date fair value
Nonvested restricted shares, December 31, 2012		23,394		$	11.54
Grants		22,459			13.26
Vested		(23,394	)		11.54

Nonvested restricted shares, December 31, 2013		22,459			13.26
Grants		26,511			15.86
Vested		(22,459	)		13.26

Nonvested restricted shares, December 31, 2014		26,511			15.86
Grants		100,073			14.78
Vested		(24,649	)		15.97
Cancellations		(500	)		14.84

Nonvested restricted shares, December 31, 2015		101,435		$	14.77


Total unrecognized compensation expense remaining	$	1,089,700

Weighted-average years expected to be recognized over		2.6

The total fair value of restricted stock that vested during the year ended December 31, 2015 was $374,000.

Performance shares

During the year ended December 31, 2015, awards for performance shares were granted under the Plan. Each performance award represents the right to receive up to 150% of the target number of shares of common stock. The number of shares of common stock earned will be determined based on the attainment of specified performance goals by December 31, 2017, as determined by the Compensation Committee. The shares are subject to the terms and conditions of the Plan.

A summary of the Company’s performance-based award activity and related information for the year ended December 31, 2015 is as follows:


	Performance- based awards			Weighted- average grant date fair value
Nonvested performance-based awards, January 1, 2015		—		$	—
Grants (at target)		66,650			14.84
Cancellations		(500	)		14.84

Nonvested performance-based awards, December 31, 2015		66,150		$	14.84


Total unrecognized compensation expense remaining	$	740,560

Weighted-average years expected to be recognized over		2.0

The Company recognized total stock compensation expense of $5.3 million for the year ended December 31, 2015, of which $2.2 million represents stock option compensation expense, $0.8 million represents restricted stock, including restricted stock granted to directors, and performance based compensation expense and $2.2 million represents stock awards. For the year ended December 31, 2014 the Company recognized total stock compensation expense of $4.5 million, of which $2.5 million represents stock option compensation expense, $0.3 million represents restricted stock compensation expense and $1.7 million represents stock awards. For the year ended December 31, 2013, the Company recognized total stock compensation expense of $2.9 million.