On September 18, 2003, the Company adopted a stock option plan (the “2003 Plan”) that provides for the grant of incentive stock options and nonqualified stock options. The option price of incentive stock options must be at least 100% of market value at the date of the grant and incentive stock options have a maximum term of 10 years. Options granted typically vest ratably over a three-year period or are based on achievement of performance criteria. The Company grants selected executives and other key employees share option awards, whose vesting is contingent upon meeting various departmental and company-wide performance goals including meeting sales targets and net profit targets. In March 2009, the Company amended the 2003 Plan to extend the post-service termination exercise period of non-statutory stock options granted to directors for their service to the Company as directors from three months after the director’s termination date to the tenth anniversary of the date of grant. The 2003 Plan does not contain any provisions which would trigger automatic vesting upon a change in control. The Board has determined that no further awards will be made pursuant to the 2003 Plan. As of December 31, 2015, options for 289,834 shares of common stock were vested and exercisable under the 2003 Plan, and 289,834 shares have been reserved for issuance under the 2003 Plan.

In May 2013, shareholders approved the 2013 Stock Incentive Plan (the “2013 Plan”). An aggregate of 6,000,000 shares of the Company’s common stock may be issued pursuant to the 2013 Plan, as amended, to officers, employees, non-employee directors and consultants of the Company and its affiliates. Awards under the plan may be in the form of stock options, which may constitute incentive stock options, or non-qualified stock options, restricted shares, restricted stock units, performance awards, stock bonus awards, share appreciation rights and other stock based awards. Stock options will be issued at an exercise price not less than 100% of the market value at the date of grant and expire no later than ten years after the date of grant. Stock awards typically vest over three years but vesting periods for non-employees may be longer or based on the achievement of performance goals.

Through December 31, 2015, the Company has issued 25,000 options, 2,706,664 restricted shares, net of forfeitures, and 831,150 shares for incentive compensation, under the 2013 Plan. A total of 2,462,186 common shares (including 25,000 for stock options already awarded) are reserved for future issuance under the 2013 Plan.

A summary of non-vested restricted shares follows:

The weighted average term of employee restricted stock is three years. Unrecognized compensation expense for employee restricted stock grants outstanding at December 31, 2015 amounted to $1,425,000, which will be amortized over the next three years.

The following table summarizes option activity of the 2003 and 2013 Plans. Substantially all of the options are exercisable as of December 31, 2015:

The total future compensation cost related to non-vested stock option awards is estimated to be nominal. The total intrinsic value of options exercised during the year ended December 31, 2013 was $95,000. No options were exercised in 2015 and 2014. Options outstanding at December 31, 2015 had no intrinsic value. The total fair value of options vested during the years ended December 31, 2015, 2014 and 2013 was nominal.

Under the 2003 Plan, 153,600 and 7,640 performance options expired during 2013 and 2014, respectively. These performance options were also included in the summary of option activity above.

Stock-based compensation expense for employees recognized in the accompanying statements of operations for the years ended December 31, 2015, 2014 and 2013 was $2,422,000, $1,751,000 and $303,000, respectively. Stock-based compensation expense (benefit) recorded with respect to non-employee service providers during the years ended December 31, 2015, 2014 and 2013 was $297,000, ($40,000) and $506,000, respectively. Stock-based compensation for 2015 and 2014 includes $1,123,000 and $941,000, respectively, of bonus and commissions paid in the form of common stock.