STOCK-BASED COMPENSATION

In May 2011, the Company adopted and shareholders approved the 2011 Omnibus Incentive Plan (the “Omnibus Plan”). This plan provides for the issuance of stock options, restricted stock, stock appreciation rights and performance units to directors, officers and other eligible employees of the Company. The Omnibus Plan makes available approximately 7.5 million shares for issuance, subject to adjustments for stock dividends, recapitalizations and the like.

The Company recognizes all share-based awards to eligible employees based upon their fair value. The Company’s policy is to recognize expense for awards that have service conditions only subject to graded vesting using the straight-line attribution method. Total stock-based compensation expense was $7.8 million, $7.5 million and $5.1 million in 2014, 2013 and 2012, respectively. The amount of compensation costs related to nonvested stock options and restricted stock not yet recognized was $8.4 million at December 31, 2014, for which the weighted average remaining life was 1.7 years.

Stock Options

Stock options are awarded with an exercise price equal to the market price of the underlying stock on the date of grant, become fully exercisable three years after the date of grant and expire ten years after the date of grant. The fair value of stock option awards is estimated on the date of grant using a binomial option-pricing model that uses the assumptions noted in the following table:

Valuation Assumptions	2014		2013		2012
Risk-free interest rate	2.73	%	2.02	%	1.99	%
Expected volatility	72.0	%	75.3	%	78.8	%
Expected dividend yield	0.00	%	0.00	%	0.00	%
Expected term	5 yrs.		5 yrs.		5 yrs.

The expected volatility is based upon the Company’s historical experience. The expected term represents the period of time that options granted are expected to be outstanding. The risk-free interest rate utilized for periods throughout the contractual life of the options are based on U.S. Treasury security yields at the time of grant.

A summary of all stock option activity during 2014 is as follows:

					Weighted
			Weighted		Average			Aggregate
			Average		Remaining			Intrinsic
	Number of		Exercise		Contractual			Value ($ in
	Options		Price		Life			millions)
Options Outstanding at December 31, 2013		1,999,688	$	11.57		6.0	$	4.4
Granted		200,720	$	13.32
Exercised		(195,383)	$	9.83			$	0.7
Forfeited		(20,549)	$	10.46
Expired		(75,020)	$	22.70
Options Outstanding at December 31, 2014		1,909,456	$	11.79		5.5	$	3.3

Options Exercisable at December 31, 2014		1,360,693	$	12.01		4.4	$	2.5

During 2014, 2013 and 2012, the Company granted 200,720, 361,220, and 487,950 stock options with aggregate fair values on the date of grant of $1.7 million, $2.2 million and $3.4 million, respectively. The weighted average estimated fair value of the stock options granted in 2014, 2013 and 2012 were $8.34, $6.13 and $6.94 per stock option, respectively. The total intrinsic value of stock options exercised during 2014, 2013 and 2012 was $0.7 million, $0.3 million and $0.3 million, respectively.

Restricted Stock

Restricted stock awards vest over a period of one to three years and may be based on the achievement of specific financial performance metrics. These shares are valued at the market price on the date of grant, are forfeitable in the event of terminated employment prior to vesting and could include the right to vote and receive dividends.

A summary of all restricted stock activity during 2014 is as follows:

			Weighted
			Average
	Number of		Grant Date
	Shares		Fair Value
Restricted Stock Outstanding at December 31, 2013		1,146,931	$	10.06
Granted		572,052	$	13.84
Vested		(392,470)	$	10.19
Forfeited		(37,744)	$	10.07
Restricted Stock Outstanding at December 31, 2014		1,288,769	$	11.70

During 2014, 2013 and 2012, the Company granted 572,052, 521,181 and 404,250 shares of restricted stock, respectively, with aggregate fair values on the date of grant of $7.9 million, $5.0 million and $4.0 million, respectively. The total fair value of restricted stock that vested during 2014, 2013 and 2012 was $5.2 million, $0.6 million and $1.9 million, respectively.

Cash-Settled Performance Units and Stock Appreciation Rights

In March 2010, the Company awarded eligible employees 326,250 cash-settled stock appreciation rights and 434,661 cash-settled performance units. The stock appreciation rights vested in March 2013 and provided each participant with the right to receive payment in cash representing the appreciation in the market value of the Company’s common stock from the grant date to the award’s vesting date. The per share exercise price of a stock appreciation right is equal to the closing market price of the Company’s stock on the date of grant. As of December 31, 2013, all stock appreciation rights awarded by the Company were fully vested. The total fair value of cash-settled stock appreciation rights that vested in 2013 was $0.8 million. The performance units vested in March 2013 and provided each participant with the right to receive payments in cash for the lesser of the market value of the Company’s stock on the date of grant or the vesting date. As of December 31, 2013, all cash-settled performance units awarded by the Company were fully vested. The total fair value of cash-settled performance units that vested in 2013 was $3.0 million. The number of performance units actually awarded to eligible employees was based on the achievement of specific financial performance metrics.