9. STOCK-BASED COMPENSATION

The Company has an equity incentive plan which reserves a total of 3.5 million shares of common stock for issuance pursuant to its terms. The plan provides for the granting of shares of stock, including options to purchase shares of common stock, stock appreciation rights tied to the value of common stock, restricted stock, and restricted and deferred stock unit awards to eligible employees, non-employee directors and consultants. The Company measures share-based compensation grants at fair value on the grant date, adjusted for estimated forfeitures. The Company records noncash compensation expense related to equity awards in its financial statements over the requisite service period on a straight-line basis. Substantially all of the Company’s existing share-based compensation awards have been determined to be equity awards.

The following table summarizes stock option activity for the three months ended March 31, 2014:


	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)

Outstanding at December 31, 2013	610,250	$	10.71	3.4	$	5,310
Granted	-		-
Exercised	(151,000)		9.24			2,599
Forfeited	-		-
Expired	-		-
Outstanding at March 31, 2014	459,250	$	11.19	3.4	$	8,446
Exercisable at March 31, 2014 (1)	459,250	$	11.19	3.4	$	8,446

(1) Includes in-the-money options totaling 459,250 shares at a weighted-average exercise price of $11.19.

The Company’s option awards allow employees to exercise options through cash payment to the Company for the shares of common stock or through a simultaneous broker-assisted cashless exercise of a share option through which the employee authorizes the exercise of an option and the immediate sale of the option shares in the open market. The Company uses newly-issued shares of common stock to satisfy its share-based payment obligations.

The following table summarizes non-vested stock award and deferred stock unit activity for the three months ended March 31, 2014:


	Non-Vested Shares and Deferred Stock Units	Weighted-Average Grant-Date Fair Value		Weighted-Average Remaining Vesting Term (in years)

Non-Vested at December 31, 2013	738,950	$	10.39
Granted	361,707		22.88
Forfeited	(4,121)		11.53
Vested	(394,812)		13.38
Non-Vested at March 31, 2014	701,724	$	15.14	2.4

Compensation costs expensed for share-based payment plans described above during the three months ended March 31, 2014 and 2013 were approximately $3.3 million and $2.3 million, respectively. At March 31, 2014, there were $9.4 million of unrecognized compensation costs from share-based compensation arrangements, which are related to non-vested awards. This compensation is expected to be recognized over a weighted-average period of approximately 2.4 years. The potential tax benefit realizable for the anticipated tax deductions of the exercise of share-based payment arrangements generally would approximate 38% of these expense amounts.