STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2013

4.	STOCK-BASED COMPENSATION

The Company reserved 2,250,000 shares of common stock under a Stock Incentive Plan with a term of ten years. This plan provides for the issuance of various forms of stock incentives, including, among others, incentive and non-qualified stock options and restricted shares. As of September 30, 2013, there were approximately 251,000 shares available for grants.

Stock-based compensation for the three and nine months ended September 30, 2013 and 2012 were as follows:

(in thousands)	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Pre – tax cost	$	429	$	380	$	1,273	$	1,135
After tax cost	$	276	$	245	$	821	$	732

Stock Options

Transactions involving Marine Products stock options for the nine months ended September 30, 2013 were as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in years		Aggregate Intrinsic Value
Outstanding at December 31, 2012		144,615		$	6.82		0.44
Granted		-			-		N/A
Exercised		-			-		N/A
Forfeited		(103,015	)		4.54		N/A
Expired		-			-		N/A
Outstanding at September 30, 2013		41,600		$	12.47		0.58	N/A

There were no stock options exercised during the nine months ended September 30, 2013. The total intrinsic value of share options exercised was approximately $817,000 during the nine months ended September 30, 2012. Tax benefits associated with the exercise of non-qualified stock options during the nine months ended September 30, 2012 of approximately $51,000 were credited to capital in excess of par value and are classified as financing cash flows, since all of the stock options exercised in the nine months ended September 30, 2012 were incentive stock options which do not generate tax deductions for the Company.

Restricted Stock

The following is a summary of the changes in non-vested restricted shares for the nine months ended September 30, 2013:

	Shares			Weighted Average Grant-Date Fair Value
Non-vested shares at December 31, 2012		1,132,500		$	5.92
Granted		371,000			6.40
Vested		(229,000	)		6.20
Forfeited		(5,300	)		6.47
Non-vested shares at September 30, 2013		1,269,200		$	6.01

The total fair value of shares vested was approximately $1,457,000 during the nine months ended September 30, 2013 and $1,168,000 during the nine months ended September 30, 2012. Tax benefits for compensation tax deductions in excess of compensation expense totaling approximately $108,000 for the nine months ended September 30, 2013 and $96,000 for the nine months ended September 30, 2012 were credited to capital in excess of par value and classified as financing cash flows.

Other Information

As of September 30, 2013, total unrecognized compensation cost related to non-vested restricted shares was approximately $6,664,000. This cost is expected to be recognized over a weighted-average period of 3.8 years.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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