NOTE 16. EQUITY

Public Common Stock Offering

In December 2013, we sold and issued 2,990,000 shares of our common stock, including 390,000 shares pursuant to the underwriters' option to purchase additional shares, at a price of $34.00 per share. We received net proceeds of $96.4 million after deducting underwriting discounts, commissions and offering expenses. $30.0 million of the net proceeds were used to repay amounts outstanding under the Credit Agreement.

Stock Option Plans

We have options outstanding under two stock option plans, the 1992 Stock Option Plan for Employees ("1992 Employee Plan") and the 2008 Stock Option Incentive Plan ("2008 Stock Option Plan"). In April 2013, the 1992 Employee Plan expired and was cancelled except for options then outstanding. These plans were developed to provide additional incentives through equity ownership in US Ecology and, as a result, encourage employees and directors to contribute to our success. Stock options expire ten years from the date of grant and vest over a period ranging from one to three years from the date of grant. Vesting requirements for non-employee directors are contingent on attending a minimum of 75% of regularly scheduled board meetings during the year. 1,500,000 stock options have been authorized for grant under the 2008 Stock Option Plan, with 827,000 options available for future grant as of December 31, 2014. Upon the exercise of stock options, common stock is issued from treasury stock or, when depleted, from new stock issuances.

A summary of our stock option plan activity is as follows:

$s in thousands, except per share amounts	Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (Years)
Outstanding as of December 31, 2013		393,776		$	22.52
Granted		78,575			42.03
Exercised		(121,060	)		21.27
Cancelled, expired or forfeited		(34,513	)		21.77

Outstanding as of December 31, 2014		316,778		$	27.92	$	3,866		7.9


Exercisable as of December 31, 2014		85,507		$	19.82	$	1,736		5.9

The weighted average grant date fair value of all stock options granted during 2014, 2013 and 2012 was $9.78, $5.06 and $4.03 per share, respectively. The total intrinsic value of stock options exercised during 2014, 2013 and 2012 was $3.5 million, $2.4 million and $497,000, respectively.

The fair value of each stock option is estimated as of the date of grant using the Black-Scholes option-pricing model. Expected volatility is estimated based on an average of actual historical volatility and implied volatility corresponding to the stock option's estimated expected term. We believe this approach to determine volatility is representative of future stock volatility. The expected term of a stock option is estimated based on analysis of stock options already exercised and foreseeable trends or changes in behavior. The risk-free interest rates are based on the U.S. Treasury securities maturities as of each applicable grant date. The dividend yield is based on analysis of actual historical dividend yield.

The significant weighted-average assumptions relating to the valuation of each option grant are as follows:

	2014	2013	2012
Expected life	3.6 years	3.3 years	3.3 years
Expected volatility	36%	36%	39%
Risk-free interest rate	0.8%	0.4%	0.4%
Expected dividend yield	2.0%	3.4%	4.1%

Restricted Stock Plans

We have two restricted stock plans: the Amended and Restated 2005 Non-Employee Director Compensation Plan (the "Director Plan") and the 2006 Restricted Stock Plan (the "Employee Plan"). The Director Plan provides that each non-employee director receive an annual award of either the number of shares of restricted stock or options to purchase US Ecology common stock (at each Director's election) with a value equal to $75,000 on the date of grant with a one-year vesting period. Vesting is also contingent on the non-employee director attending a minimum of 75% of regularly scheduled board meetings and 75% of the meetings of each committee of which the Non-Employee Directors is a member during the year. 200,000 shares of common stock have been authorized for grant under the Director Plan. During 2014, 8,200 shares were granted to non-employee directors. As of December 31, 2014, 59,000 shares remained available for grant under the Director Plan. The Employee Plan provides that employees are eligible for restricted stock grants at the discretion of the Board of Directors. Generally, awards granted under the Employee Plan vest annually over a three-year period. 200,000 shares of common stock have been authorized for grant under the Employee Plan. During 2014, 19,550 shares were granted to employees. As of December 31, 2014, 55,669 shares remained available for future grant under the Employee Plan. Upon the vesting of restricted stock awards, common stock is issued from treasury stock or, when depleted, from new stock issuances.

A summary of our restricted stock plan activity is as follows:

	Shares			Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2013		51,600		$	25.89
Granted		27,750			43.81
Vested		(23,208	)		26.28
Cancelled, expired or forfeited		(3,157	)		28.98

Outstanding as of December 31, 2014		52,985		$	34.92

The total fair value of restricted stock vested during 2014, 2013 and 2012 was $975,000, $299,000 and $413,000, respectively.

Share-Based Compensation Expense

All share-based compensation is measured at the grant date based on the fair value of the award, and is recognized as an expense in earnings over the requisite service period. The components of pre-tax share-based compensation expense (included in Selling, general and administrative expenses in the Consolidated Statements of Earnings) and related tax benefits were as follows:

$s in thousands	2014			2013			2012
Share-based compensation from:
Stock options	$	442		$	346		$	397
Restricted stock		808			519			449

Total share-based compensation		1,250			865			846
Income tax benefit		(467	)		(310	)		(326	)

Share-based compensation, net of tax	$	783		$	555		$	520

Unrecognized Share-Based Compensation Expense

As of December 31, 2014, there was $2.4 million of unrecognized compensation expense related to unvested share-based awards granted under our share-based award plans. The expense is expected to be recognized over a weighted average remaining vesting period of approximately two years.