Note 14.

Stock Option Plans, Stock Grants, Stock Appreciation Rights and Employee Stock Purchase Plan

At our May 2005 Annual Meeting, the stockholders approved the 2005 Stock Incentive Plan. The 2005 Stock Incentive Plan authorizes the issuance in the aggregate of 1,000,000 incentive stock options, non-incentive stock options, restricted shares and stock appreciation rights for our common stock. Upon the approval of the 2005 Amended and Restated Stock Incentive Plan, no further awards are being issued under any of our other stock plans or the stock appreciation rights plan. All stock options issued under the 2005 Amended and Restated Stock Incentive Plan are exercisable upon vesting for one share of our common stock and are granted at exercise prices no less than the fair market value of our common stock on the date of grant.

In April 2009, the stockholders approved an amendment to the 2005 Stock Incentive Plan increasing the available number of restricted shares from 1,000,000 to 1,500,000. In April 2013, the stockholders further amended and restated the 2005 Stock Incentive Plan increasing the available number of restricted shares from 1,500,000 to 2,000,000. As of December 31, 2014, 1,523,228 of such awards were issued leaving 476,772 awards available to be issued in subsequent periods.

Stock-based compensation granted under our Company’s stock plans is expensed in tranches over the vesting period. Options and non-performance based grants generally vest equally over a three or four year period and the options have a maximum term of ten years. Certain non-performance based grants vest over five years with one-third vesting in each of the third, fourth and fifth years. Our Company’s performance based share grants generally consist of three types of awards. The restricted stock units issued in 2014 and after will cliff vest on the third anniversary of the date of the grant with 100% dependent on the rate of cumulative annual growth in tangible book value for the three years immediately prior to the vesting date, with actual shares that vest ranging between 150% to 50% of that portion of the original award. The restricted stock units issued between 2011 – 2013 will cliff vest on the third anniversary of the date of grant, with 50% vesting in full, and 50% dependent on the rate of compound annual growth in book value per share for the three years immediately prior to the vesting date, with actual shares that vest ranging between 150% to 0% of that portion of the original award. The performance based restricted stock units issued prior to 2011 generally vest over five years with one-third vesting in each of the third, fourth and fifth years, with 100% dependent on the rolling three-year average return on equity based on the three years prior to the year in which the vesting occurs, with actual shares that vest ranging between 150% to 0% of the original award.

The amounts charged to expense for stock-based compensation for the years ended December 31, 2014, 2013 and 2012 are presented in the following table:


	Year Ended December 31,
In thousands	2014		2013		2012

Restricted stock units	$	11,507	$	3,369	$	7,380

Directors restricted stock grants ⁽¹⁾		420		413		390
Employee stock purchase plan		194		132		82

Total stock-based compensation	$	12,121	$	3,914	$	7,852


(1) -		Relates to non-employee directors serving on the Parent Company’s Board of Directors, all of whom have been elected by the Company’s stockholders, as well as non-employee directors serving on NUAL’s Board of Directors.

Unvested restricted stock units outstanding as of December 31, 2014, 2013 and 2012, and changes during the years ended on those dates, are presented in the following table:


	December 31,
	2014			2013			2012
Beginning balance		626,812			587,629			526,972

Granted - Performance		228,607			114,463			97,145
Granted - Non Performance		59,523			155,463			146,915

Total Granted		288,130			269,926			244,060

Vested - Performance Earned		—			(15,714	)		—
Vested - Performance Unearned		(93,453	)		(57,585	)		(46,998	)
Vested - Non Performance		(90,263	)		(60,183	)		(91,323	)

Total Vested		(183,716	)		(133,482	)		(138,321	)

Forfeited		(12,334	)		(97,261	)		(45,082	)

Ending balance		718,892			626,812			587,629

As included in the table above, there were 15,714 performance based shares that vested during the year ended December 31, 2013. There were no performance based shares that vested during the years ended December 31, 2014 and 2012.

The fair value of total vested shares for the years ended December 31, 2014, 2013 and 2012 was $5.1 million, $3.5 million and $4.6 million, respectively.

The weighted average grant date fair value per share of all RSUs granted during the years ended December 31, 2014, 2013 and 2012 was $60.75, $55.36 and $48.21, respectively.

As of December 31, 2014 and 2013, the total unrecognized compensation expense, net of estimated forfeitures, related to unvested RSUs was $16.3 million and $10.6 million, respectively, which is expected to be recognized as expense over weighted average periods of 2.3 years and 2.2 years, respectively. The aggregate fair value of all unvested RSUs as of December 31, 2014 and 2013 was $46.1 million and $39.6 million, respectively.

Stock options outstanding as of December 31, 2014, 2013 and 2012 are as follows:


	December 31,
	2014					2013					2012
	# of Shares			Average Exercise Price		# of Shares			Average Exercise Price		# of Shares			Average Exercise Price
Beginning balance		6,750		$	30.65		90,250		$	29.94		105,250		$	29.50
Granted		—			—		—			—		—			—
Exercised		(5,250	)	$	29.11		(83,500	)	$	29.88		(15,000	)	$	26.90
Expired or forfeited		—			—		—			—		—		$	—

Ending balance		1,500		$	36.03		6,750		$	30.65		90,250		$	29.94

Number of options exercisable		1,500		$	36.03		6,750		$	30.65		90,250		$	29.94

The following table summarizes information about stock options outstanding as of December 31, 2014:


Price Range	Outstanding Options		Average Remaining Contract Life		Average Exercise Price		Average Aggregate Intrinsic Value		Exercisable Options		Average Exercise Price		Average Aggregate Intrinsic Value
$31 to $37		1,500		0.7	$	36.03	$	27.13		1,500	$	36.03	$	27.13

Total		1,500		0.7						1,500

We offer an Employee Stock Purchase Plan (the “ESPP”) to all of our eligible employees. Employees are offered the opportunity to purchase our Company’s common stock at 90% of fair market value at the lower of the price at the beginning or the end of each six month offering period. Employees can invest up to 10% of their base compensation through payroll withholding towards the purchase of our common stock subject to the lesser of 1,000 shares or total market value of $25,000. There will be 9,509 shares purchased in 2015 from funds withheld during the July 1, 2014 to December 31, 2014 offering period. There were 19,386 shares purchased in 2014 in the aggregate from funds withheld during the offering periods of July 1, 2013 to December 31, 2013 and January 1, 2014 to June 30, 2014. We expense both the value of the 10% discount and the “look-back” option, which provides for the more favorable price at either the beginning or end of the offering period.