Share-Based Payments

At December 31, 2014, the Company had one equity compensation plan (the “Plan”), which is shareholder approved, that provides for the granting of share options and shares to eligible employees and directors up to 1,800,000 shares.

Share Awards: Restricted share awards provide for the immediate issuance of shares of Company common stock to the recipient, with such shares held in escrow until certain service conditions are met, generally four years of continual service. Recipients of restricted shares do not pay any cash consideration to the Company for the shares, have the right to vote all shares subject to such grant, and receive all dividends with respect to such shares, whether or not the shares have vested. The fair value of share awards is equal to the fair market value of the Company’s common stock on the date of grant.

A summary of changes in the Company’s nonvested shares and related information for the years ended December 31, 2014, 2013 and 2012 is presented below:



Nonvested Shares	Shares		Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2012	362,675		$	19.24
Granted	180,841		$	21.32
Vested	(118,511	)	$	21.65
Forfeited	(40,915	)	$	18.60
Nonvested at December 31, 2012	384,090		$	19.54
Granted	203,441		$	20.78
Vested	(117,153	)	$	16.90
Forfeited	(59,780	)	$	20.24
Nonvested at December 31, 2013	410,598		$	20.79
Granted	246,068		$	25.97
Vested	(108,371	)	$	21.45
Forfeited	(28,510	)	$	21.92
Nonvested at December 31, 2014	519,785		$	23.03

As of December 31, 2014, there was $7.0 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted average period of 2.4 years. The total fair value, as measured on the date of vesting, of shares vested during the years ended December 31, 2014, 2013, and 2012 was $2.3 million, $2.5 million, and $2.5 million, respectively.

Share Options: Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest based on three years of continual service and are exercisable for a five-year period after vesting. Option awards granted have a 10-year maximum term.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. The fair value of all options is amortized on a straight-line basis over the requisite service periods, which are generally the vesting periods. The expected life of options granted represents the period of time that they are expected to be outstanding. The expected life is determined based on historical experience with similar awards, giving consideration to the contractual terms and vesting schedules. Expected volatilities of our common stock are estimated at the date of grant based on the historical volatility of the stock. The volatility factor is based on historical stock prices over the most recent period commensurate with the estimated expected life of the award. The risk-free interest rate is based on the U.S. Treasury curve in effect at the time of the award. The expected dividend yield is based on dividend trends and the market value of the Company’s stock price at the time of the award.

A summary of option activity under the Plan as of December 31, 2014, and changes during the year then ended is presented below.



Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value ($000)
Balance at December 31, 2013	116,197		$	65.01
Forfeited	(8,753	)	$	75.32
Expired	(22,330	)	$	91.95
Exercised	(9,116	)	$	12.09
Balance at December 31, 2014	75,998		$	62.41	2.4	$	391
Vested or expected to vest at December 31, 2014	75,998		$	62.41	2.4	$	391
Total Exercisable at December 31, 2014	75,998		$	62.41	2.4	$	391

The total intrinsic value of options exercised during the years ended December 31, 2014, 2013, and 2012 was $138 thousand, $410 thousand, and $5 thousand, respectively. The weighted average grant-date fair value of options granted in during the year ended December 31, 2013 was $3.06. There were no options granted during the years ended December 31, 2014 and 2012. There were no options that vested during the years ended December 2014, 2013, and 2012.

As of December 31, 2014, outstanding stock options consist of the following:



Ranges of Exercise Prices	Number of Option Shares	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price of Option Shares		Number of Exercisable Option Shares	Weighted Average Exercise Price of Exercisable Option Shares
$0.00 - $9.99	21,579	4.3	$	9.91	21,579	$	9.91
$10.00 - $19.99	600	2.6	$	12.61	600	$	12.61
$30.00 - $39.99	4,051	2.1	$	30.86	4,051	$	30.86
$40.00 - $49.99	349	3.5	$	44.49	349	$	44.49
$50.00 - $136.93	49,419	1.6	$	88.65	49,419	$	88.65
	75,998	2.4	$	62.41	75,998	$	62.41

It is the Company’s policy to issue new shares for share option exercises and share awards. The Company expenses awards of share options and shares on a straight-line basis over the related vesting term of the award. For the 12 months ended December 31, 2014, 2013 and 2012, the Company recognized pre-tax share-based compensation expense of $2.9 million, $2.8 million and $1.6 million, respectively.