5.	Share-Based Compensation

In June 2007, the board of directors and stockholders approved the 2007 Stock Incentive Plan (“the 2007 Plan”). Under the 2007 Plan, we may grant restricted stock, stock options, stock appreciation rights, restricted stock units, performance awards, unrestricted stock awards and other incentive awards. Under a Second Amendment to the 2007 Plan effective May 31, 2012, the maximum number of shares of common stock available for the grant of awards under the 2007 Plan after May 31, 2012, is 2,100,000. Awards of any stock options are to be priced at not less than the fair market value at the date of the grant. The vesting period of any stock award is to be determined by the board or an authorized committee at the time of the grant. The term of each stock option is to be fixed at the time of grant and may not exceed 10 years. Shares issued upon stock options exercised are issued as new shares.

Share-based compensation expense amounted to $7.5 million, $4.7 million and $2.6 million for the years ended December 31, 2012, 2011 and 2010, respectively. Such amounts represent the estimated fair value of stock awards for which the requisite service period elapsed during those periods. Included in share-based compensation expense for the years ended December 31, 2012, 2011 and 2010, was $535,000, $420,000 and $381,000, respectively, related to grants to nonemployee directors.

Stock Options

There were no stock option grants during the years ended December 31, 2012, 2011 and 2010. As of December 31, 2012, all stock options are fully vested.

The following table summarizes stock options outstanding and activity as of and for the years ended December 31, 2012, 2011 and 2010, (dollars in thousands):


	Shares Subject to Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2010		409,327		$	8.03		5.41	$	—
Granted		—		$	—
Exercised		(58,798	)	$	12.76
Canceled		(16,191	)	$	12.00

Outstanding at December 31, 2010		334,338		$	7.01		3.85	$	4,567

Granted		—			—
Exercised		(74,241	)	$	13.59
Canceled		—			—

Outstanding at December 31, 2011		260,097		$	5.13		1.94	$	6,315

Granted		—
Exercised		(216,822	)	$	3.68
Canceled		—

Outstanding at December 31, 2012		43,275		$	12.38		4.88	$	547

Exercisable (fully vested) at December 31, 2012		43,275		$	12.38		4.88	$	547

The intrinsic value of the options exercised during the years ended December 31, 2012, 2011 and 2010, was $7.0 million, $1.1 million and $608,000, respectively. The tax benefit recognized related to the stock option exercises was $358,000 and $141,000 in the years ended December 31, 2011 and 2010, respectively. There was no tax benefit recognized related to the stock option exercises in the year ended December 31, 2012.

Nonvested Shares

Share grants totaling 316,279 shares, 256,317 shares and 568,142 shares with an approximate aggregate fair market value of $10.4 million, $8.1 million and $4.3 million at the time of grant were granted to employees during the years ended December 31, 2012, 2011 and 2010, respectively. Included in the share grants for 2012, 2011 and 2010, are 129,890 shares, 204,000 shares and 400,000 shares, respectively, awarded to our executive officers. The aggregate fair market value of these shares on the grant date was $4.8 million, $6.5 million and $2.7 million, respectively, to be expensed over a remaining service period of approximately three years, subject to certain performance restrictions.

A summary of the status of nonvested shares for the years ended December 31, 2012, 2011 and 2010, is presented below:


	Shares			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2010		225,880		$	9.73
Granted		568,142			7.71
Vested		(77,969	)		10.07
Canceled		(7,272	)		9.51

Nonvested at December 31, 2010		708,781			8.04
Granted		256,317			31.54
Vested		(124,134	)		9.93
Canceled		(50,842	)		12.03

Nonvested at December 31, 2011		790,122			15.06
Granted		316,279			32.94
Vested		(333,957	)		14.57
Canceled		(19,365	)		23.74

Nonvested at December 31, 2012		753,079		$	22.35

As of December 31, 2012, unrecognized compensation expense related to the nonvested shares amounted to $10.3 million, which will be recognized over a remaining service period of three years.

Subsequent Restricted Share Award

Subsequent to December 31, 2012, 183,673 restricted shares were awarded to our executive officers. The number of shares awarded assumes that the Company will achieve certain threshold performance and maximum total shareholder return conditions. The aggregate fair market value of these shares on the grant date was $4.5 million, to be expensed over a remaining service period of approximately four years, subject to certain threshold performance and three-year total shareholder return conditions.