Equity Compensation Plans

As of March 31, 2016, the Company’s equity compensation plans consisted of the 2003 Stock Incentive Compensation Plan (the “2003 Plan”) and the 2012 Stock Incentive Plan (the “2012 Plan” and together with the 2003 Plan, the “Plans”) under which incentive and non-qualified stock options and time and performance based restricted shares have been granted to employees and directors from authorized but unissued shares of common stock or treasury shares. The 2003 Plan is not active, but continues to govern all outstanding awards granted under the plan until the awards themselves are exercised or terminate in accordance with their terms. The 2012 Plan, approved by shareholders on April 27, 2012, authorizes 1.75 million shares of common stock for awards. The 2012 Plan also authorizes an additional 1.2 million shares of common stock to the extent awards granted under prior stock plans that were outstanding as of April 27, 2012 are forfeited. The 2012 Plan provides for the following types of awards: options, restricted stock, restricted stock units and other stock-based awards.

The Company accounts for the expense of all share-based compensation by measuring the awards at fair value on the date of grant. The Company recognizes expense on a straight-line basis over the vesting period of the entire award. Options issued by the Company under its stock option plans have a term of ten years and generally vest ratably over a period of three to four years. Time-based restricted stock grants are expensed over the vesting period of the award, which is typically two to four years. The number of performance based restricted shares that vest or forfeit depend upon achievement of certain targets during the performance period. Prior to January 1, 2016, stock compensation expense included estimated effects of forfeitures. Upon adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, in the first quarter of 2016, an accounting policy election has been made to account for forfeitures as they occur. Compensation expense for performance based awards is recorded based upon the service period and management’s assessment of the probability of achieving the performance goals and will be adjusted based upon actual achievement.

The Company incurred equity compensation expense of $1.1 million and $0.6 million for the quarters ended March 31, 2016 and March 31, 2015, respectively, for the Plans, including restricted stock awards. No equity compensation costs were capitalized as part of inventory.

Stock Options

The following table is a summary of outstanding and exercisable options as of March 31, 2016:



In thousands except per share amounts and years	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
Outstanding at March 31, 2016	447	$	20.73	7.1	$	5,654
Exercisable at March 31, 2016	223	$	12.27	5.3	$	4,510
Unvested at March 31, 2016	224	$	29.15	8.9	$	1,144

There were 18,300 stock options granted and 18,326 stock options exercised during the quarter ended March 31, 2016 and no stock options granted and 59,582 stock options exercised during the quarter ended March 31, 2015. The amount of cash received from the exercise of stock options was $0.3 million during the quarter ended March 31, 2016 and $0.6 million during the quarter ended March 31, 2015. The intrinsic value of stock options exercised was $0.3 million with a tax benefit of $0.1 million during the quarter ended March 31, 2016 and the intrinsic value of stock options exercised was $1.2 million with a tax benefit of $0.4 million during the quarter ended March 31, 2015. At March 31, 2016, the total unrecognized compensation cost related to non-vested stock option awards was approximately $2.5 million, with a weighted average expected amortization period of 3.1 years.

Restricted Stock

Restricted stock includes both performance-based and time-based awards. There were 7,930 time-based restricted shares granted during the quarter ended March 31, 2016 and no time-based restricted shares granted during the quarter ended March 31, 2015. There were 7,380 performance-based restricted shares granted during the quarter ended March 31, 2016, which have a 2018 earnings per share target, and there were no performance-based awards granted in the quarter ended March 31, 2015. There were 65,087 performance-based shares that vested during the quarter ended March 31, 2016 in accordance with Plan provisions and there were no performance-based restricted shares that vested in the quarter ended March 31, 2015. There were 8,129 time-based restricted shares that vested during the quarter ended March 31, 2016 and there were 10,321 time-based shares that vested during the quarter ended March 31, 2015. At March 31, 2016, there were 266,533 unvested restricted stock awards with total unrecognized compensation cost related to these awards of $4.3 million with a weighted average expected amortization period of 2.1 years. Compensation expense for performance based awards is recorded based on the service period and management’s assessment of the probability of achieving the performance goals.