Stock Compensation

Employees of the Company have participated in various stock-based compensation plans. Restricted stock awards and restricted stock units have been granted under the plans. Participation in these plans is reflected as compensation to the Company's employees and is included in selling and general expenses in the consolidated statement of operations. Compensation is recorded based upon the estimated fair value of the award on the date of grant and is recognized on a straight-line basis over the period that the award vests.

Restricted Stock Awards and Restricted Stock Units

Effective September 24, 2009, the Company adopted the Euramax Holdings, Inc. Executive Incentive Plan (the "Plan"). Under the Plan, the Company reserved 21,737 restricted shares of Class A Common Stock for issuance to selected officers, directors and other key employees. To the extent that shares issued under the plan are forfeited or the award terminates, such shares may be reissued under the plan. The plan terminates on September 23, 2019.

A summary of changes in unvested shares of restricted stock for the year ended December 31, 2014 are as follows:



	Number of Shares		Weighted Average Grant Date Fair Value
Outstanding at December 31, 2013	2,675		$	512
Granted	1,100		395
Vested	(988	)	547
Forfeited	(25	)	577
Outstanding at December 31, 2014	2,762		$	452

During 2014, the Company granted 1,100 shares of restricted stock awards and no restricted stock units to employees under the plan. During 2013, the Company granted 1,600 shares of restricted stock awards and 500 restricted stock units. The shares of restricted stock awards and restricted stock units vest ratably over four years based upon continued employment or immediately upon a change in control or termination of employment by reason of death or disability. Restricted stock units are required to be settled by the issuance of shares of the Company's common stock. Shares issued pursuant to the plan are subject to a stockholders agreement (the Stockholders Agreement) entered into in 2009. The Stockholders Agreement contains certain restrictions on the ability of stockholders to transfer common stock of the Company. The Stockholder Agreement also provides stockholders with customary tag-along rights and drag-along rights with respect to certain transfers of stock or equity securities of the Company and customary preemptive rights in connection with the issuance of common stock or equity securities by the Company.

The fair value of restricted stock awards and restricted stock units was estimated on the date of grant based on the estimated fair value of the Company's Class A common stock determined using an income and market valuation analysis. The weighted average grant date fair value of the 2014, 2013, and 2012 grants were $395, $453 and $784 per share, respectively. During 2014, 2013, and 2012, the Company recognized expense of approximately $0.5 million, $2.2 million, and $3.0 million related to shares of restricted stock awards and restricted stock units.

Determining the fair value of the Company's common stock requires making complex and subjective judgments. Accordingly, the Company performed valuations using an income and market approach for grants made during 2014 and 2013. The Company's income approach to valuation is based on a discounted future cash flow approach that uses its estimates of revenue, driven by assumed market growth rates, and estimated costs as well as appropriate discount rates. The Company's revenue forecasts are based on expected annual growth rates and other assumptions that are consistent with the plans and estimates the Company uses to manage the business. The Company applied discount rates of 11.5% and 11.0% in 2014 and 2013, respectively, to calculate the present value of its future cash flows, which was determined using the Capital Asset Pricing Model. The Company also applied a 25% lack of marketability discount, which accounts for the fact that private companies are less liquid than similar public companies, and a 20% minority interest discount. These discounts were estimated based on comparable market transactions and other analyses.

As of December 31, 2014, the Company had approximately $0.9 million of unrecognized compensation cost related to stock-based compensation arrangements granted under the Plan. This cost is expected to be recognized as stock-based compensation expense over a weighted-average period of approximately 3 years.