Stock incentive plans | 11. Stock incentive plans Stock incentive plans . Under the assumptions indicated below, the weighted-average fair value of stock option grants for 2016, 2015, and 2014 was $1.70, $6.73 and $11.11, respectively. In 2016, we also issued restricted share units for certain executives and directors that vest over a specified period of time, and in some instances require achieving certain performance metrics. The weighted-average fair value of these restricted share units was $7.31. No restricted share units were issued in 2015 or 2014. The table below indicates the key assumptions used in the option valuation calculations for options granted in 2016, 2015, and 2014 and a discussion of our methodology for developing each of the assumptions used in the valuation model: Year ended December 31, 2015 2014 2013 Expected option term (in years) 6.9 6.8 6.6 Expected volatility 38.8 % 50.4 % 53.8 % Risk-free interest rate 1.2 % 1.6 % 1.6 % Dividend yield 4.5 % 4.7 % 2.6 % Expected Option Term Expected Volatility Risk-Free Interest Rate Dividend Yield For 2016, 2015, and 2014, we recorded $611,000, $488,000, and $506,000 of share-based compensation expense, respectively, included primarily in general and administrative expense in our Consolidated Statements of Operations. We also recorded income tax benefits of $184,000, $148,000, and $377,000 in 2016, 2015, and 2014 respectively, related to such share-based compensation. At December 31, 2016, these benefits are recorded as a deferred tax asset in the Consolidated Balance Sheets. Option activity in the 2005 Equity Incentive Plan and 2014 Equity Incentive Plan is summarized below: Stock Options Restricted Share Units Number of Shares Average Price* Number of Units Average Price** Outstanding at December 31, 2015 915,375 $ 8.08 $ - - Granted 233,900 7.17 57,400 7.94 Exercised (3,750 ) 6.11 - - Forfeited (27,000 ) 8.03 - - Expired (44,625 ) 9.49 - - Outstanding at December 31, 2016 1,073,900 $ 7.83 $ 57,400 7.94 * weighted-average exercise price ** weighted-average grant stock price The following summarizes information about equity awards outstanding that are vested and expect to vest and equity awards that are exercisable at December 31, 2016: Equity Awards Vested and Expected to Vest Equity Awards That Are Exercisable Awards Average Price* Aggregate Intrinsic Value Remaining Term** Awards Average Price* Aggregate Intrinsic Value Remaining Term** Stock Options 1,057,720 $ 7.83 $ 183,000 6.0 587,875 $ 7.89 $ 182,000 4.1 Restricted stock units 48,769 - 322,000 2.5 * weighted-average exercise price per share ** weighted-average contractual remaining term in years Shares that are issued upon exercise of employee stock awards are newly issued shares and not issued from treasury stock. As of December 31, 2016, unrecognized compensation cost related to non-vested equity awards granted under our stock incentive plans is approximately $939,000, which is expected to be recognized over a weighted average period of 2.4 years. The total fair value of awards vested during the years ended December 31, 2016, 2015, and 2014 was $961,000, $944,000, and $943,000, respectively. The total intrinsic value (which is the amount by which the stock price exceeded the exercise price on the date of exercise) of stock options exercised during the years ended December 31, 2016, 2015, and 2014 was $6,000, $32,000 and $20,000, respectively. As of December 31, 2016, no restricted stock units have vested. Cash received from option exercises was $23,000, $263,000 and $13,000 for 2016, 2015, and 2014, respectively. We recorded a realized tax benefit in 2016, 2015, and 2014 from equity-based awards of $1,000, $4,000 and $7,000, respectively, related to options exercised which has been included as a component of cash flows from financing activities in the Consolidated Statements of Cash Flows. Restricted stock: We paid a portion of the 2015, 2014 and 2013 incentive bonus for the chief executive officer and chief financial officer in the form of 28,231, 23,578 and 8,663 deferred stock units, respectively, with a corresponding credit recorded to Additional Paid in Capital (net of share relinquishments) in the amounts of $151,000, $121,000 and $56,000 in 2016, 2015, and 2014, respectively. Such deferred stock units were granted in February 2016, February 2015 and February 2014, respectively, and were fully vested at the time of grant. These units will be converted three years from the grant date to shares of the Company's common stock on a one-for-one basis. The weighted average exercise price of the deferred stock units was $7.65. Starting with the 2016 incentive bonus program, all incentive bonus payments are made in cash with no portion of the award paid in deferred stock units. |