Stock-Based Compensation

We recognize compensation expense using a fair-value based method for costs associated with all share-based awards issued to our directors, employees and outside consultants under our stock plan. The value of the portion of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service periods in our Consolidated Statements of Income.

We have adopted the simplified method to calculate the beginning balance of the additional paid-in capital pool of the excess tax benefit and to determine the subsequent effect on the APIC pool and Consolidated Statements of Cash Flows of the tax effects of employee stock-based compensation awards that were outstanding upon our adoption.

We calculate stock-based compensation expense based on the number of awards ultimately expected to vest, net of estimated forfeitures. We estimate forfeiture rates at the time of grant and revise such rates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The stock-based compensation expense was determined using the Black-Scholes option valuation model.

Stock-based compensation expense for employees and directors and non-employees for the years ended December 31, 2014, 2013 and 2012, is presented below:



	Year Ended December 31,
Stock-based Compensation	2014		2013		2012
(In thousands)
Employees and directors	$	1,157	$	655	$	650
Non-employees	344		217		287
Total	$	1,501	$	872	$	937

Stock-Based Incentive Plans

We currently have one active stock-based incentive plan under which we may grant stock-based awards to our employees, directors and non-employees.

The total number of shares of common stock authorized for issuance, shares of common stock issued upon exercise of options or grant of restricted stock, shares of common stock subject to outstanding awards and available for grant under this plan as of December 31, 2014, is as follows:



Title of Plan	Total Shares of Common Stock Authorized	Total Shares of Common Stock Issued	Total Shares of Common Stock Subject to Outstanding Awards	Total Shares of Common Stock Available for Grant
2005 Equity Incentive Plan⁽¹⁾	5,200,000	1,034,216	—	4,165,784
2002 Outside Directors Stock Option Plan⁽²⁾	157,000	140,750	16,250	—
1999 Non-statutory Stock Option Plan⁽²⁾	4,966,183	4,966,183	—	—
1999 Stock Option Plan⁽²⁾	3,694,485	3,653,150	41,335	—

_________________________


(1)	As of December 31, 2014, there were 277,881 shares of unvested restricted stock awards outstanding.


(2)	Plan terminated in 2009, subject to options outstanding under the plan.

Under our 2005 Equity Incentive Plan, we are authorized to issue a variety of incentive awards, including stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance share and performance unit awards, deferred compensation awards and other stock-based or cash-based awards.

In 2009, the compensation committee of our board of directors (the "Compensation Committee") terminated the 1991 Nonstatutory Stock Option Plan. Additionally the Compensation Committee terminated the 1999 Outside Director Stock Option Plan, the 1999 Nonstatutory Stock Option Plan and the 2002 Outside Directors Stock Option Plan, subject to any outstanding options. Also in June 2009, our stockholders approved amendments to the Company’s 2005 Equity Incentive Plan to expand persons eligible to participate in the plan to include our outside directors.

Stock Option Activity

A summary of our stock option activity is presented below:



	2014				2013				2012
	Number of shares (in thousands)		Weighted-Average Exercise Price		Number of shares (in thousands)		Weighted-Average Exercise Price		Number of shares (in thousands)		Weighted-Average Exercise Price
Outstanding at beginning of year	172		$	16.52	196		$	16.22	231		$	16.62
Expired	(114	)	$	22.08	(24	)	$	14.07	(35	)	$	18.83
Outstanding at end of year	58		$	5.41	172		$	16.52	196		$	16.22
Exercisable at end of year	58		$	5.41	172		$	16.52	196		$	16.22

As of December 31, 2014, the aggregate intrinsic value of our outstanding and exercisable stock options was $0.1 million and the weighted-average remaining contractual life was 0.8 years. The aggregate intrinsic value represents the total pre-tax intrinsic value, based on the closing prices of our common stock of $7.71 on December 31, 2014, which would have been received by the option holders had option holders exercised their options as of that date. All stock options were fully vested as of 2010 and at December 31, 2014, had an exercise price of to $5.41.

Restricted Stock

Restricted stock has the same rights as other issued and outstanding shares of the Company’s common stock, including, in some cases, the right to accrue dividends, which are held in escrow until the award vests. The compensation expense related to these awards is determined using the fair market value of the Company’s common stock on the date of the grant, and the compensation expense is recognized ratably over the vesting period. Under the company's recent restricted stock plans, restricted stock awards typically vest over one to five years. In addition to service requirements, vesting of restricted stock awards may be subject to the achievement of specified performance goals set by the Compensation Committee. If the performance goals are not met, no compensation expense is recognized and any previously recognized compensation expense is reversed.

A summary of our restricted stock activity is presented below:



	2014				2013				2012
	Number of shares (in thousands)		Weighted-average grant-date fair value per share		Number of shares (in thousands)		Weighted-average grant-date fair value per share		Number of shares (in thousands)		Weighted- average grant-date fair value per share
Nonvested at beginning of year	114		$	7.45	120		$	6.51	137		$	6.09
Awards granted	312		$	8.39	127		$	7.50	139		$	6.49
Awards vested	(149	)	$	7.67	(118	)	$	6.59	(137	)	$	6.09
Forfeited	—		$	—	(15	)	$	7.07	(19	)	$	6.35
Nonvested at end of year	277		$	8.39	114		$	7.45	120		$	6.51

Stock-based compensation expense associated with our restricted stock for the years ended December 31, 2014, 2013 and 2012, was $1.5 million, $0.9 million and $0.9 million, respectively. As of December 31, 2014, the aggregate intrinsic value of non-vested restricted stock was $2.1 million. Total unrecognized compensation costs associated with non-vested restricted stock as of December 31, 2014, was $1.4 million, excluding forfeitures, which we expect to recognize over a weighted-average period of 1.8 years.