At December 31, 2013, the Company had six stock-based compensation plans, which are described below. All share amounts disclosed below reflect the effect of the 1 -for- 20 reverse stock split which was approved by the stockholders on November 26, 2003.

The 1995 Director Stock Option and Appreciation Rights Plan (the “1995 Director Plan”) provides for the issuance of incentive stock options, non-qualified stock options and stock appreciation rights (“SARs”) to directors of the Company, for up to 12,500 shares of common stock (subject to adjustment in the event of stock dividends, stock splits, and other similar events). If any incentive option, non-qualified option or SAR terminates prior to exercise thereof and during the duration of the 1995 Director Plan, the shares of common stock as to which such option or right was not exercised become available under the 1995 Director Plan for the grant of additional options or rights to any eligible director. Each option is immediately exercisable for a period of ten years from the date of grant. The Company has 12,500 shares of common stock reserved for issuance under the 1995 Director Plan. As of December 31, 2013 and 2012, there were no options outstanding under the 1995 Director Plan.

The 1995 Employee Stock Option and Appreciation Rights Plan (the “1995 Employee Plan”) provides for the grant of incentive stock options, non-qualified stock options, and SARs of up to 20,000 shares of common stock (subject to adjustment in the event of stock dividends, stock splits, and other similar events). Directors of the Company are not eligible to participate in the 1995 Employee Plan. The 1995 Employee Plan provides for the grant of stock options, which qualify as incentive stock options under Section 422 of the Internal Revenue Code, to be issued to officers who are employees and other employees, as well as for the grant of non-qualified options to be issued to officers, employees and consultants. In addition, SARs may be granted in conjunction with the grant of incentive and non-qualified options. To the extent that an incentive option or non-qualified option is not exercised within the period of exercisability specified therein, it expires as to the then unexercisable portion. If any incentive option, non-qualified option or SAR terminates prior to exercise thereof and during the duration of the 1995 Employee Plan, the shares of common stock as to which such option or right was not exercised become available under the 1995 Employee Plan for the grant of additional options or rights to any eligible employee. The shares of common stock subject to the 1995 Employee Plan may be made available from either authorized but unissued shares, treasury shares, or both. The Company has 20,000 shares of common stock reserved for issuance under the 1995 Employee Plan. As of December 31, 2013 and 2012, there were no options outstanding under the 1995 Employee Plan.

In October 2000, the stockholders of the Company approved an amendment of the 1997 Recruitment Stock Option Plan (the “1997 Plan”) which provides for the issuance of incentive stock options, non-qualified stock options and SARs up to an aggregate of 370,000 shares of common stock (subject to adjustment in the event of stock dividends, stock splits, and other similar events). The price at which shares of common stock covered by the option can be purchased is determined by the Company’s Board; however, in all instances the exercise price is never less than the fair market value of the Company’s common stock on the date the option is granted. The Board also has discretion to determine, for each grant, the requisite service, vesting and exercise periods. The Company has not awarded any SARs under the 1997 Plan.

	2013		2012

Options outstanding, beginning of year	228,198		231,198
Options exercised	—		(1,750	)
Options expired	(228,198	)	(1,250	)
Options outstanding, end of year	—		228,198

In November 2003, the stockholders of the Company approved the 2003 Stock Option and Appreciation Rights Plan (the “2003 Plan”) which provides for the issuance of incentive stock options, non-qualified stock options and SARs up to an aggregate of 2,000,000 shares of common stock (subject to adjustment in the event of stock dividends, stock splits, and other similar events). The price at which shares of common stock covered by the option can be purchased is determined by the Company’s Board or a committee thereof; however, in the case of incentive stock options the exercise price shall not be less than the fair market value of the Company’s common stock on the date the option is granted.

	2013		2012

Options outstanding, beginning of year	1,565,000		1,430,000
Options granted	200,000		415,000
Options exercised	(30,000	)	(30,000	)
Options forfeited	(280,000	)	(250,000	)
Options expired	(180,000	)	—
Options outstanding, end of year	1,275,000		1,565,000

The outstanding options vest over four years at exercise prices ranging from $0.08 to $2.00 per share. No SARs have been issued under the 2003 Plan.

In the fourth quarter of 2010, the Company’s Board approved the 2010 Non-Qualified Stock Option Plan (the “2010 Plan”) to induce certain key employees of the Company or any of its subsidiaries who are in a position to contribute materially to the Company’s prosperity to remain with the Company, to offer such persons incentives and rewards in recognition of their contributions to the Company’s progress, and to encourage such persons to continue to promote the best interests of the Company. The Company reserved 1,250,000 shares of common stock (subject to adjustment under certain circumstances) for issuance or transfer upon exercise of options granted under the 2010 Plan. Options may be issued under the 2010 Plan to any key employees or consultants selected by the Company’s Board (or a committee appointed by the Board). Options may not be granted with an exercise price less than the fair market value of the common stock of the Company as of the day of the grant. Options granted pursuant to the plan are subject to limitations on transfer and execution and may be issued subject to vesting conditions. Options may also be forfeited in certain circumstances.

	2013		2012

Options outstanding, beginning of year	1,250,000		1,250,000
Options forfeited	(1,250,000	)	—
Options outstanding, end of year	—		1,250,000

In the second quarter of 2011, the Company’s Board approved the Equity Partners Stock Option Plan (the “Equity Partners Plan”) to allow the Company to issue options to purchase common stock as a portion of the purchase price of Equity Partners. The Company reserved 230,000 shares of common stock for issuance upon exercise of options granted under the Equity Partners Plan. During 2011, 230,000 options with an exercise price of $1.83, vesting immediately, were granted under the Equity Partners Plan. There were no grants, exercises or forfeitures during 2013 or 2012, and therefore there were 230,000 options outstanding at December 31, 2013 and 2012.

In the first quarter of 2012, the Company’s Board approved the issuance of options as part of the acquisition of HGP, and reserved 625,000 shares of common stock for issuance upon option exercise. Unlike other options issued by the Company under its stock option plans, the options issued as part of the HGP acquisition survive termination of employment. During 2013 and 2012 none of the option holders terminated their employment with the Company.

	2013	2012

Options outstanding, beginning of year	625,000	—
Options granted	—	625,000
Options outstanding, end of year	625,000	625,000

Total compensation cost related to stock options in 2013 and 2012 was $532 and $593, respectively. These amounts were recorded in selling, general and administrative expense in both years. During 2013, a tax benefit of $3 was recognized in connection with the exercise of 30,000 options, compared to $25 recognized in 2012 in connection with the exercise of 31,750 options. During 2013, the Company received $10 of cash in connection with the exercise of options, as compared to receiving $14 in 2012. Option holders are not entitled to receive dividends or dividend equivalents.

During 2012 the Company also recognized $1,054 of stock-based compensation expense, which was included in selling, general and administrative expense, with respect to the 400,000 common shares of the Company that were issued to each of its Co-CEOs in exchange for intellectual property licensing agreements, as discussed above in Notes 11 and 13. There were no similar transactions in 2013.

During 2013, the Company granted a total of 200,000 options. Of these, 150,000 were issued to an officer of the Company, and 50,000 were issued to the Company’s independent directors in accordance with their standard compensation. During 2012, the Company granted a total of 1,040,000 options. Of these, 365,000 were issued to employees of the Company. 625,000 were issued to the former owners of HGP in connection with the Company’s acquisition of HGP, and 50,000 were issued to the Company’s independent directors in accordance with their standard compensation.

The fair value of each option grant was estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions:

	2013	2012
Risk-free interest rate	0.39% - 0.40%	0.36% - 0.51%
Expected life (years)	4.75	4.75
Expected volatility	124% - 125%	133% - 135%
Expected dividend yield	Zero	Zero
Expected forfeitures	Zero	Zero

The risk-free interest rates are those for U.S. Treasury constant maturities, for terms matching the expected term of the option. The expected life of the options is calculated according to the simplified method for estimating the expected term of the options, based on the vesting period and contractual term of each option grant. Expected volatility is based on the Company’s historical volatility. The Company has never paid a dividend on its common stock and therefore the expected dividend yield is zero.

The following summarizes the changes in common stock options for the years ended December 31, 2013 and 2012:

As of December 31, 2013, the total unrecognized stock-based compensation expense related to unvested stock options was $837, which is expected to be recognized over a weighted-average period of twenty-six months.

The following summarizes the changes in unvested common stock options for the years ending December 31, 2013 and 2012:

				Weighted
				Average
				Grant Date
	Options			Fair Value
Unvested at December 31, 2012	2,600,000		$	1.23
Granted	200,000		$	0.76
Vested	(790,000	)	$	1.16
Forfeited	(810,000	)	$	0.53
Unvested at December 31, 2013	1,200,000		$	1.67

				Weighted
				Average
				Grant Date
	Options			Fair Value
Unvested at December 31, 2011	2,350,000		$	0.83
Granted	1,040,000		$	1.75
Vested	(540,000	)	$	0.87
Forfeited	(250,000	)	$	0.20
Unvested at December 31, 2012	2,600,000		$	1.23

The total fair value of options vesting during the years ending December 31, 2013 and 2012 was $914 and $468, respectively. The unvested options have no associated performance conditions. In general, the Company’s employee turnover is low, and the Company expects that the majority of the unvested options will vest according to the standard four-year timetable.

The following table summarizes information about all stock options outstanding at December 31, 2013:

		Weighted		Weighted		Weighted		Weighted
		Average		Average		Average		Average
	Options	Remaining		Exercise	Number	Remaining		Exercise
Exercise price	Outstanding	Life (years)		Price	Exercisable	Life (years)		Price
$0.08 to $0.15	80,000	2.75	$	0.12	70,000	2.68	$	0.12
$0.70 to $1.00	310,000	4.74	$	0.95	90,000	1.58	$	0.84
$1.83 to $2.00	1,740,000	4.83	$	1.97	770,000	4.68	$	1.94
	2,130,000	4.74	$	1.75	930,000	4.23	$	1.69