7. Share-Based Compensation Plans

In May 2002, the Company adopted the Director Share Option Plan (“Director Option Plan”). The Company reserved 500,000 Common Shares for issuance under the Director Option Plan. Under the Director Option Plan, the Company granted cumulative options to purchase 86,000 Common Shares to directors of the Company with exercise prices equal to the fair market value of the Company’s Common Shares on the date of grant. The options granted cliff-vested one year after the date of grant and have a contractual life of 10 years. The Director Option Plan expired in May 2012.

In April 2006, the Company’s shareholders approved the Amended and Restated Long-Term Incentive Plan (the "2006 Plan") and reserved 3,000,000 Common Shares of which the maximum number of Common Shares which may be issued subject to incentive stock options is 500,000. In May 2013, shareholders approved an amendment to the 2006 Plan to increase the number of shares from 3,000,000 to 4,500,000. Under the 2006 Plan, as of December 31, 2013, the Company has issued 3,319,200 restricted Common Shares, of which 2,145,300 are time-based with cliff vesting using the straight-line method and 1,173,900 are performance-based. Restricted Common Shares awarded under the Incentive Plan entitle the shareholder to all the rights of Common Share ownership except that the shares may not be sold, transferred, pledged, exchanged, or otherwise disposed of during the vesting period.

In 2008, pursuant to the 2006 Plan, the Company granted time-based restricted Common Share and performance-based restricted Common Share awards. The time-based restricted Common Share awards cliff vest three years after the grant date. The performance-based restricted Common Share awards vest and are no longer subject to forfeiture upon the recipient remaining an employee of the Company for three years from date of grant and upon achieving certain net income per share targets established by the Company.

In 2009, pursuant to the 2006 Plan, the Company granted time-based restricted Common Share awards. These restricted Common Share awards cliff vest three years after the grant date.

In 2010 and 2013, pursuant to the 2006 Plan, the Company granted time-based restricted Common Share and market-based restricted Common Share awards. The time-based restricted Common Share awards cliff vest three years after the date of grant. The performance-based restricted Common Share awards vest and are no longer subject to forfeiture upon the recipient remaining an employee of the Company for three years from the date of grant and upon the Company attaining certain targets of performance measured against a peer group’s performance in terms of total return to shareholders.

In 2011 and 2012, pursuant to the 2006 Plan, the Company granted time-based, market-based and performance-based restricted Common Share awards. The time-based restricted Common Share awards cliff vest three years after the date of grant. The performance-based restricted Common Share awards vest and are no longer subject to forfeiture upon the recipient remaining an employee of the Company for three years from the date of grant and, for one half of the annual awards, upon the Company attaining certain targets of performance measured against a peer group’s performance in terms of total shareholder return and, for the remaining half of the annual awards, upon achieving certain annual net income per share targets established by the Company during the performance period of the award.

In April 2005, the Company adopted the Directors’ Restricted Shares Plan (“Director Share Plan”) and reserved 500,000 Common Shares for issuance under the Director Share Plan. In May 2013, shareholders approved an amendment to the Director Share Plan to increase the number of shares for issuance from 500,000 to 700,000. Under the Director Share Plan, the Company has cumulatively issued 435,534 restricted Common Shares. Shares issued under the Director Share Plan during 2010, 2011, 2012 and 2013 cliff vest one year after the date of grant.

Options

A summary of option activity under the plans noted above as of December 31, 2013, and changes during the year ended are presented below:


				Weighted-
			Weighted-	average
			average	remaining
	Share		exercise	contractual
	options		price	term
Outstanding as of December 31, 2012	59,000	$	12.20
Expired	(39,000)	$	10.39
Exercised	-	$	-
Outstanding and exercisable as of December 31, 2013	20,000	$	15.73	0.36

There were no options granted during the years ended December 31, 2013, 2012 and 2011, and all outstanding options have vested.

The intrinsic value of options outstanding and exercisable is the difference between the fair market value of the Company’s Common Shares on the applicable date (“Measurement Value”) and the exercise price of those options that had an exercise price that was less than the Measurement Value. The intrinsic value of options exercised is the difference between the fair market value of the Company’s Common Shares on the date of exercise and the exercise price. There were no options exercised during the years ended December 31, 2013 and 2012. The total intrinsic value of options exercised during the year ended December 31, 2011 was $117.

As of December 31, 2013, 2012, and 2011, the aggregate intrinsic value of both outstanding and exercisable options was $0, $0, and $5, respectively.

Restricted Shares

The fair value of the non-vested time-based restricted Common Share awards was calculated using the market value of the shares on the date of issuance. The weighted-average grant-date fair value of time-based restricted Common Shares granted during the years ended December 31, 2013, 2012 and 2011 was $6.13, $9.95 and $15.79, respectively.

The fair value of the non-vested performance-based restricted Common Share awards with a performance condition requiring the Company to obtain certain earnings per share targets was estimated using the market value of the shares on the date of grant. The fair value of non-vested performance-based restricted Common Share awards with a market condition requiring the Company to obtain a total shareholder return target relative to a group of peer companies was estimated using a Monte Carlo valuation model taking into consideration the probability of achievement using multiple simulations.

A summary of the status of the Company’s non-vested restricted Common Shares as of December 31, 2013 and the changes during the year then ended, are presented below:


	Time-based awards			Performance-based awards
			Weighted-			Weighted-
	Common		average grant-	Common		average grant-
	shares		date fair value	shares		date fair value
Non-vested as of December 31, 2012	842,830	$	10.31	635,850	$	10.78
Granted	633,470	$	6.13	248,850	$	7.52
Vested	(337,369)	$	7.42	-	$	-
Forfeited	(12,061)	$	9.68	(220,950)	$	6.92
Non-vested as of December 31, 2013	1,126,870	$	8.83	663,750	$	11.45

As of December 31, 2013, total unrecognized compensation cost related to non-vested time-based restricted Common Share awards granted was $3,330. That cost is expected to be recognized over a weighted-average period of 1.93 years. For the years ended December 31, 2013, 2012 and 2011, the total fair value of time-based restricted Common Share awards vested was $2,177, $4,413 and $3,743, respectively.

As of December 31, 2013, total unrecognized compensation cost related to non-vested performance-based restricted Common Share awards granted was $1,873. That cost is expected to be recognized over a weighted-average period of 1.25 years dependent upon the achievement of performance conditions. As noted above, the Company has issued and outstanding performance-based restricted Common Share awards that use different performance targets. The awards that use earnings per share as the performance target will not be expensed until it is probable that the Company will meet the underlying performance condition.

Cash received from option exercises under all share-based payment arrangements for the years ended December 31, 2013, 2012 and 2011 was $0, $0 and $168, respectively. There was no actual tax benefit realized for the tax deductions from the vesting of restricted Common Shares and option exercises of the share-based payment arrangements for the years ended December 31, 2013, 2012 and 2011.