15. Stock Compensation

Overview

Under the Company’s plans, the Company is currently authorized to grant the following number of shares and the Company has available for grant up to the following number of shares as of December 31, 2013 and 2012:



	Authorized	Available for Grant
Plan	Shares	2013	2012
1996 Discounted Employee Stock Purchase Plan, as amended	1,900,000	749,000	847,000
2004 Employee Stock Incentive Plan	2,100,000	60,000	41,000
2008 Non-Employee Directors Stock Incentive Plan	300,000	--	27,000
2009 Employee Stock Incentive Plan	4,100,000	2,221,000	2,847,000
Total	8,400,000	3,030,000	3,762,000

During 2012 the Company amended the 2009 Employee Stock Incentive Plan to increase the authorized shares under the plan by 2.1 million shares. Upon the exercise of stock options or grants of RSAs, RSUs, or PSUs, the Company may issue the required shares out of authorized but unissued common stock or out of treasury stock, at management’s discretion.

Stock Awards

In 2013 the Compensation Committee of the Company’s Board of Directors authorized awards from approved stock incentive plans of RSAs to non-employee Directors, RSUs to certain employees, and RSAs and PSUs to certain Company officers, which, counting PSUs at target levels, together totaled 467,000 shares of common stock and had an aggregate market value of $3.1 million. The PSUs granted in 2013 represent the right to receive from 50% to 150% of the target numbers of shares of common stock. The performance component of PSU awards granted in 2013 is based on the attainment of specified levels of adjusted EBITDA, as defined in the grant, for the 2013 calendar year. The PSUs granted in 2013 earned approximately 115% of the target number of shares.

In 2012 the Compensation Committee of the Company’s Board of Directors authorized awards from approved stock incentive plans of RSAs to non-employee Directors, RSUs to certain employees, and RSAs and PSUs to certain Company officers, which, counting PSUs at target levels, together totaled 451,000 shares of common stock and had an aggregate market value of $2.4 million. The PSUs granted in 2012 earned approximately 125% of the target number of shares.

In 2011 the Compensation Committee of the Company’s Board of Directors authorized awards from approved stock incentive plans of RSAs to non-employee Directors and certain Company officers and RSUs to certain employees, which together totaled 421,000 shares of common stock and had an aggregate market value of $2.2 million.

A summary of stock grant activity for the years ended December 31, 2013, 2012, and 2011 for RSAs, RSUs, and PSUs, based on shares granted at goal, is as follows:


		Weighted
		Average
		Grant Date
RSAs	Shares	Fair Value
Unvested at December 31, 2010	364,000	$	7.07
Granted	360,000		5.18
Vested	(128,000)		7.28
Forfeited	(44,000)		5.48
Unvested at December 31, 2011	552,000		5.91
Granted	229,000		5.39
Vested	(142,000)		7.00
Unvested at December 31, 2012	639,000		5.48
Granted	232,000		6.10
Vested	(215,000)		5.80
Forfeited	(34,000)		5.31
Unvested at December 31, 2013	622,000		5.62


		Weighted
		Average
		Remaining		Aggregate
		Contractual		Intrinsic
RSUs	Shares	Term in years		Value
Outstanding at December 31, 2010	58,000		1.85	$	313,000
Granted	61,000
Vested	(19,000)
Forfeited	(3,000)
Outstanding at December 31, 2011	97,000		1.66		466,000
Granted	64,000
Vested	(37,000)
Forfeited	(4,000)
Outstanding at December 31, 2012	120,000		1.54		747,000
Granted	73,000
Vested	(54,000)
Forfeited	(10,000)
Outstanding at December 31, 2013	129,000		1.56		1,425,000

Vested and expected to vest	118,000		1.55	$	1,314,000


		Weighted
		Average
		Remaining		Aggregate
		Contractual		Intrinsic
PSUs	Shares	Term in years		Value
Outstanding at December 31, 2011	--		--	$	--
Granted	159,000
Vested	--
Forfeited	--
Outstanding at December 31, 2012	159,000		0.93		989,000
Granted	182,000
Vested	(99,000)
Forfeited	(6,000)
Outstanding at December 31, 2013	236,000		0.81		2,612,000

Vested and expected to vest	224,000		0.78	$	2,487,000

Stock Options

The Compensation Committee of the Company’s Board of Directors authorized grants of stock options from approved stock incentive plans to certain Company officers and employees totaling 162,000, 159,000, and 599,000 shares in 2013, 2012, and 2011, respectively, with exercise prices equal to the stock prices on the respective grant dates.

A summary of the Company’s stock option activity for the years ended December 31, 2013, 2012, and 2011 follows:



				Weighted
				Average
		Weighted		Remaining		Aggregate
		Average		Contractual		Intrinsic
	Shares	Exercise Price		Term in years		Value
Outstanding at December 31, 2010	2,281,000	$	6.74		3.46	$	603,000
Granted	599,000		5.13
Exercised	(260,000)		4.53
Forfeited	(100,000)		5.60
Expired	(320,000)		5.30
Outstanding at December 31, 2011	2,200,000		6.83		4.00		--
Granted	159,000		5.67
Exercised	(48,000)		5.64
Forfeited	(2,000)		7.01
Expired	(249,000)		7.03
Outstanding at December 31, 2012	2,060,000		6.74		3.66		1,225,000
Granted	162,000		6.12
Exercised	(365,000)		7.48
Forfeited	(49,000)		5.56
Expired	(14,000)		6.69
Outstanding at December 31, 2013	1,794,000		6.57		3.31		8,274,000

Vested and expected to vest	1,781,000	$	6.57		3.29	$	8,205,000
Exercisable at December 31, 2013	1,372,000	$	6.86		2.75	$	5,971,000

Other information concerning stock options for the years ended December 31 is as follows:



	2013		2012		2011
Weighted-average fair value of options granted	$	2.54	$	2.67	$	2.54
Intrinsic value of options exercised		673,000		10,000		261,000

Employees purchased common stock totaling 97,000, 72,000, and 64,000 shares in 2013, 2012, and 2011, respectively, through the Company’s ESPP.

Stock Compensation Expense

The following weighted‑average assumptions were used to determine the fair value of options:



	2013		2012		2011
	Stock	ESPP	Stock	ESPP	Stock	ESPP
	Options	Options	Options	Options	Options	Options
Expected life of options	4.3 Years	.50 Years	4.3 Years	.50 Years	4.0 Years	.50 Years
Expected stock price volatility	0.60	0.39	0.60	0.48	0.65	0.39
Dividends	1.91%	1.59%	N/A	N/A	N/A	N/A
Risk-free interest rate	0.70%	0.13%	0.71%	0.12%	1.25%	0.14%

The following table summarizes stock compensation expenses (in thousands):



	2013		2012		2011
RSA, RSU, and PSU expense	$	2,616	$	2,204	$	1,408
Stock option and ESPP option expense		852		1,172		1,606
Total stock compensation expense	$	3,468	$	3,376	$	3,014

Included in the total stock compensation expense, as applicable in each period, were expenses related to RSAs, RSUs, PSUs, and stock options issued in each respective year, as well as those issued in prior periods that continue to vest during the period, and compensation related to the Company’s ESPP. These amounts were recorded as stock compensation expense and were subject to the Company’s normal allocation of expenses to deferred preservation costs and inventory costs. The Company capitalized $228,000, $214,000 and $224,000 in the years ended December 31, 2013, 2012, and 2011, respectively, of the stock compensation expense into its deferred preservation costs and inventory costs.

As of December 31, 2013 the Company had total unrecognized compensation costs of $532,000 related to unvested stock options and $2.8 million related to RSAs, RSUs, and PSUs, before considering the effect of expected forfeitures. As of December 31, 2013 this expense is expected to be recognized over a weighted-average period of 1.13 years for stock options, 0.92 years for RSAs, 2.27 years for RSUs, and 0.81 years for PSUs.