15)	Stock Based Compensation

The Company recognizes compensation costs for stock options awarded to employees based on their grant-date fair value. The value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted-average fair value per share for the stock options granted to employees for the years ended December 31, 2013, 2012 and 2011 were $7.97, $7.14 and $3.18, respectively.

The following assumptions were used in determining the fair value of stock options for grants issued in 2013, 2012 and 2011:

	2013			2012			2011

Expected volatility		44.17%-71.58	%		71.84	%		68.91%-71.53	%
Expected term	1.25-4.75 years			4.75 years			4.75 years
Risk-free interest rate		0.12%-1.37	%		0.66	%		1.02%-2.00	%

The Company does not have any publicly traded stock options; therefore, expected volatilities are based on historical volatility of the Company’s stock. The risk-free interest rate is based on the yield of a zero-coupon U.S. Treasury bond whose maturity period approximates the option’s expected term. The expected term was utilized based on the “simplified” method for determining the expected term of stock options.

For 2013, 2012, and 2011, the Company recorded $1,994, $1,303 and $1,028, respectively, in selling, general and administrative expenses for stock options. As of December 31, 2013, the total compensation cost related to unvested stock option awards granted to employees but not yet recognized was $6,436. The cost will be amortized on a straight-line basis over the remaining weighted-average vesting period of 2.8 years.

Cambrex senior executives, through 2009, participated in an executive incentive plan which rewarded achievement with restricted stock units. Members of the Cambrex Board of Directors currently participate in an incentive plan which rewards service with restricted stock units. Awards are made annually and vest over six months. On the six month anniversary of the grant, restrictions on sale or transfer are removed and shares are issued to the Directors. These awards are classified as equity awards.

For 2013, 2012, and 2011, the Company recorded $427, $446, and $497, respectively, in selling, general and administrative expenses for restricted stock units. As of December 31, 2013, all restricted stock unit grants were fully vested.

The Company granted equity-settled performance shares (“PSs”) to certain executives. PS awards provide the recipient the right to receive a certain number of shares of the Company’s common stock in the future, which depends on the Company’s level of achievement of revenue and EBITDA growth as compared to the revenue and EBITDA growth of the members of a specified peer group of companies over a three year period. The peer group consists of publicly-traded life sciences companies competing in the same industry as the Company. For 2013, 2012 and 2011, the Company recorded $404, $53 and $40, respectively, in selling, general and administrative expense related to these PS awards.

The Company granted cash-settled performance share units (“PSUs”) to certain executives. PSU awards provide the recipient the right to receive the cash value of a certain number of shares of the Company’s common stock in the future, which depends on the Company’s level of achievement of revenue and EBITDA growth as compared to the revenue and EBITDA growth of the members of a specified peer group of companies typically over a three year period. The peer group consists of publicly-traded life sciences companies competing in the same industry as the Company. For 2013, 2012 and 2011, the Company recorded $2,620, $1,529 and $415, respectively, in selling, general and administrative expenses for PSU awards. The increase is primarily the result of the Company’s performance compared to the peer group and the Company’s higher share price.

The following table is a summary of the Company’s stock option activity issued to employees and related information:

				Weighted Average
	Number of Shares			Exercise Price		Options Exercisable



Outstanding at December 31, 2012		2,264,399			7.02		1,234,623

Granted		530,835			16.06
Exercised		(536,565	)		6.01
Forfeited or expired		(28,700	)		8.99

Outstanding at December 31, 2013		2,229,969			9.39
Exercisable at December 31, 2013		1,149,069		$	6.88

The aggregate intrinsic value for all stock options exercised for the years ended December 31, 2013, 2012 and 2011 was $5,017, $1,658 and $70, respectively. The aggregate intrinsic values for all stock options outstanding and exercisable as of December 31, 2013 were $18,827 and $12,585, respectively.

A summary of the Company’s nonvested stock options and restricted stock activity is presented below:

	Nonvested Stock Options					Nonvested Restricted Stock
	Number of Shares			Weighted-Average Grant-Date Fair Value		Number of Shares			Weighted-Average Grant-Date Fair Value

Nonvested at December 31, 2012		1,029,776			4.62		31,145			5.76

Granted		530,835			7.97		31,648			12.64
Vested during period		(455,211	)		4.05		(62,793	)		9.23
Forfeited		(24,500	)		4.73		-			-
Nonvested at December 31, 2013		1,080,900		$	6.50		-		$	-