Restricted Stock Units

During the nine months ended September 30, 2018, the Company issued 15,000 restricted stock units to each of its three non-management directors as an annual grant for 2018 for service on the Company's Board of Directors.  Each restricted stock unit represents a contingent right to receive one share of the Company's common stock.  The restricted stock units vest in four equal quarterly installments of 3,750 shares of common stock on March 15, 2018, June 15, 2018, September 15, 2018 and December 15, 2018, subject to continued service on the Board of Directors.

On July 14, 2018, 375,000 restricted stock units owned by the Company's Chairman and Chief Executive Officer vested in accordance with his employment agreement, dated July 14, 2016, (see Note H hereof).  With respect to such vesting of restricted stock units, the Company's Chairman and Chief Executive Officer delivered 172,313 shares of common stock to satisfy withholding taxes and received 202,687 net shares of common stock.

A summary of restricted stock unit activity for the nine months ended September 30, 2018 is as follows (each restricted stock unit represents the right to receive one share of the Company's common stock):

Restricted stock unit compensation expense was $120,000 and $237,000 for the three months ended September 30, 2018 and September 30, 2017, respectively, and $571,000 and $711,000 for the nine months ended September 30, 2018 and September 30, 2017, respectively.

The Company has an aggregate of $406,000 of unrecognized restricted stock unit compensation as of September 30, 2018 to be expensed over a weighted average period of 1.23 years.

All of the Company's 386,250 outstanding (unvested) restricted stock units at September 30, 2018 have dividend equivalent rights.  As of September 30, 2018, there was $76,000 accrued for dividend equivalent rights.  As of December 31, 2017, there was $84,000 accrued for dividend equivalent rights.

Stock Options

There were no stock option grants during the three and nine months ended September 30, 2018 and September 30, 2017.

The following table presents information relating to all stock options outstanding and exercisable at September 30, 2018:

The Company had no recorded stock-based compensation related to stock option grants for the three and nine months ended September 30, 2018 and September 30, 2017.

The Company had no unrecognized stock-based compensation cost as of September 30, 2018.  The aggregate intrinsic value of options exercisable at September 30, 2018 was $2,489,000.

During the nine months ended September 30, 2018, stock options to purchase an aggregate of 75,000 shares of the Company's common stock were exercised (50,000 shares of which were exercised on a net exercise (cashless) basis) by three non-management directors of the Company at an exercise price of $1.19 per share.  With respect to the aforementioned stock options to purchase 50,000 shares exercised on a net exercise (cashless) basis by two directors of the Company, net shares of an aggregate of 26,890 were delivered to the directors.

During the nine months ended September 30, 2018, a director of the Company exercised on a net exercise (cashless basis) a stock option to purchase 300,000 shares of common stock, at an exercise price of $1.88 per share, which resulted in net shares of 118,064 issued to the director.

During the nine months ended September 30, 2017, the Company's Chief Financial Officer and three of his children exercised stock options to purchase an aggregate 75,000 shares of the Company's common stock at an exercise price of $1.40 per share. In addition, during the nine months ended September 30, 2017, a former director exercised a stock option to purchase 125,000 shares of the Company's common stock at an exercise price of $1.40.

Warrants

As of September 30, 2018, there were no outstanding warrants to purchase shares of the Company's common stock.

During the nine months ended September 30, 2017, Recognition Interface, LLC exercised its remaining warrants to purchase an aggregate of 375,000 shares of the Company's common stock, at an exercise price of $2.10 per share, which resulted in gross proceeds to the Company of $787,500.