STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2014

The Company reserved 2,250,000 shares of common stock under the 2004 Stock Incentive Plan with a term of ten years-expiring in April 2014. 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 March 31, 2014, there were approximately 43,000 shares available for grant. Subsequently, at the annual meeting held on April 22, 2014, stockholders approved the 2014 stock incentive plan authorizing the issuance of 3,000,000 shares. All future equity compensation awards by the Company will be issued under the 2014 plan.

Stock-based compensation for the three months ended March 31, 2014 and 2013 were as follows:

(in thousands)	Three months ended March 31,
	2014		2013
Pre – tax cost	$	444	$	415
After tax cost	$	287	$	268

Stock Options

Transactions involving Marine Products stock options for the three months ended March 31, 2014 were as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in years		Aggregate Intrinsic Value
Outstanding at December 31, 2013		41,600	$	12.47		0.33
Granted		-		-		N/A
Exercised		-		-		N/A
Forfeited		-		-		N/A
Expired		-		-		N/A
Outstanding at March 31, 2014		41,600	$	12.47		0.08	N/A

There were no stock options exercised during the three months ended March 31, 2014 or March 31, 2013.

Restricted Stock

The following is a summary of the changes in non-vested restricted shares for the three months ended March 31, 2014:

	Shares			Weighted Average Grant-Date Fair Value
Non-vested shares at December 31, 2013		1,268,200		$	6.01
Granted		213,000			7.95
Vested		(276,100	)		5.76
Forfeited		(3,550	)		4.41
Non-vested shares at March 31, 2014		1,201,550		$	6.41

The total fair value of shares vested was approximately $2,356,000 during the three months ended March 31, 2014 and $1,457,000 during the three months ended March 31, 2013. Tax benefits for compensation tax deductions in excess of compensation expense totaling approximately $284,000 for the three months ended March 31, 2014 and $82,000 for the three months ended March 31, 2013 were credited to capital in excess of par value and classified as financing cash flows.

Other Information

As of March 31, 2014, total unrecognized compensation cost related to non-vested restricted shares was approximately $7,485,000. This cost is expected to be recognized over a weighted-average period of 4.0 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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