12.

SHARE-BASED COMPENSATION PLANS:

The Company has one active stock incentive plan for employees and directors, the 2007 Stock Incentive Plan, which provides for awards of stock options to purchase shares of common stock, stock appreciation rights, restricted and unrestricted shares of common stock, restricted stock units (“RSUs”) and performance share awards (“PSAs”). In addition, the Company has one inactive stock option plan, the 1995 Stock Options Plan for Nonemployee Directors, under which previously granted options remain outstanding. The plans provide that options become exercisable according to vesting schedules, which range from immediate to ratably over a 60-month period. Options terminate 10 years from the date of grant. The plans also provide for other equity instruments, such as RSUs and PSAs, which grant the right to receive a specified number of shares over a specified period of time. RSUs are service-based awards and vest according to vesting schedules, which range from immediate to ratably over a three-year period. PSAs are service-based awards with a market-based vesting condition. Vesting of the market-based PSAs is dependent upon the performance of the market price of the Company’s stock relative to a comparator group of companies and ranges from two to three years. The following summarizes share-based compensation expense recorded:


	Year ended December 31,
	2013		2012		2011
	(in thousands)
Cost of sales	$	662	$	432	$	143
Selling, general and administrative expenses		2,398		2,616		1,318

Total	$	3,060	$	3,048	$	1,461

As of December 31, 2013, unrecognized compensation expense related to the unvested portion of the Company’s RSUs and PSAs was $3.9 million, which is expected to be recognized over a weighted average period of 1.8 years.

There were 720,301 shares of common stock available for future issuance under the Company’s stock compensation plans at December 31, 2013; an additional 40,000 options and 257,087 RSUs and PSAs have been granted and remain outstanding. There were 227,177 and 307,984 shares of common stock available for future issuance under the Company’s stock compensation plans at December 31, 2012 and 2011, respectively.

Stock Options Awards

A summary of status of the Company’s stock options as of December 31, 2013 and changes during the three years then ended is presented below:


	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
						(in years)		(in thousands)
Balance, December 31, 2010		145,209		$	17.64
Options granted		—			—
Options exercised or exchanged		(73,612	)		14.12
Options cancelled		—			—

Balance, December 31, 2011		71,597			21.26
Options granted		—			—
Options exercised or exchanged		(24,597	)		17.58
Options cancelled		—			—

Balance, December 31, 2012		47,000			23.19
Options granted		—			—
Options exercised or exchanged		(7,000	)		10.31
Options cancelled		—			—

Balance, December 31, 2013		40,000			25.44

Exercisable and Outstanding, December 31, 2013		40,000			25.44		4.65	$	493

The total intrinsic value, defined as the difference between the current market value and the grant price, of options exercised during the years ended December 31, 2013, 2012 and 2011 was $0.1 million, $0.1 million and $0.8 million, respectively.

The following table summarizes information about stock options outstanding at December 31, 2013:


Options Outstanding							Options Exercisable
Range of Exercise Prices Per Share	Number of Options		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price Per Share		Number of Options		Weighted Average Exercise Price Per Share
$14.00		2,000		0.36		14.00		2,000		14.00
$22.07		4,000		1.36		22.07		4,000		22.07
$24.15		24,000		6.25		24.15		24,000		24.15
$28.31		4,000		2.36		28.31		4,000		28.31
$34.77		6,000		3.41		34.77		6,000		34.77

		40,000		4.65		25.44		40,000		25.44

There were no options granted during 2013, 2012 or 2011.

Restricted Stock Units and Performance Awards

A summary of status of the Company’s RSUs and PSAs as of December 31, 2013 and changes during the three years then ended is presented below:


	Number of RSUs and PSAs			Weighted Average Grant Date Fair Value
Unvested RSUs and PSAs at December 31, 2010		55,843		$	37.00
RSUs and PSAs granted		174,891			23.32
Unvested RSUs and PSAs cancelled		(20,997	)		47.46
RSUs and PSAs vested		(15,756	)		26.27

Unvested RSUs and PSAs at December 31, 2011		193,981			24.41
RSUs and PSAs granted		115,306			29.06
Unvested RSUs and PSAs cancelled		(39,306	)		28.44
RSUs and PSAs vested		(26,840	)		23.13

Unvested RSUs and PSAs at December 31, 2012		243,141			26.11
RSUs and PSAs granted		117,966			34.24
Unvested RSUs and PSAs cancelled		(16,002	)		27.45
RSUs and PSAs vested		(88,018	)		23.37

Unvested RSUs and PSAs at December 31, 2013		257,087		$	30.69

The unvested balance of RSUs and PSAs at December 31, 2013 includes approximately 196,000 PSAs included at a target level. The vesting of these awards is subject to the achievement of specified market-based conditions, and the actual number of common shares that will ultimately be issued will be determined by multiplying this number of PSAs by a payout percentage ranging from 0% to 200%.

The total fair value of RSUs and PSAs vested during the years ended December 31, 2013, 2012, and 2011 was $2.1 million, $0.6 million, and $0.4 million, respectively.

Stock Awards

For the years ended December 31, 2013, 2012 and 2011, stock awards were granted to non-employee directors, which vested immediately upon issuance, as follows: 4,912 shares; 4,807 shares; and 6,261 shares, respectively. The Company recorded compensation expense based on the fair market value per share of the awards on the grant date of $27.49 in 2013, $23.40 in 2012, and $25.15 in 2011.