Note 14 Stock-Based Compensation

Effective May 19, 2004, the Company adopted its 2004 Incentive Stock Plan, as further amended and restated on February 3, 2015 (the “2004 Stock Plan”) and its 2004 Restricted Stock Plan for Non-Employee Directors (the “2004 Director Plan”). Effective upon the adoption of these Plans, all the Company’s previous stock option plans terminated, except with respect to options outstanding under those plans. As of December 31, 2014 and 2013, all vested options had been exercised and there were no options outstanding. All stock-based compensation expense for vested options was recognized prior to 2008.

In 2014, the maximum number of shares of common stock reserved for issuance under the 2004 Stock Plan was increased from 4,000 to 6,000. Total awards issued under this plan, net of repurchases, amounted to 1,026 shares of restricted stock in 2014, 1,046 shares of restricted stock in 2013, and 540 shares of restricted stock in 2012. The Company estimated the future value associated with awards granted in 2014, 2013 and 2012 as $49,121, $67,942 and $20,458, respectively, which is calculated based on the fair market value of the common stock on the date of grant less the amount paid by the recipient and is expensed over the vesting period of each award. The compensation expense recognized in 2014, 2013 and 2012 was $31,944, $12,958 and $4,818, respectively. Generally, each of these awards is made with a vesting period of three years to five years from the date of grant and requires the recipient to pay the lesser of $1.00 for each share or an amount equal to ten percent of the fair market value of the Company’s common stock per share at the date of grant.

The purpose of the 2004 Stock Plan is to provide an incentive that permits the persons responsible for the Company’s growth to share directly in that growth and to further the identity of their interests with the interests of the Company’s stockholders. Any person who is an employee of or consultant to the Company, or a subsidiary or an affiliate of the Company, is eligible to be considered for the grant of restricted stock awards, stock options or performance awards pursuant to the 2004 Stock Plan. The 2004 Stock Plan is administered by the Compensation Committee of the Board of Directors, which, pursuant to the provisions of the 2004 Stock Plan, has the sole authority to determine recipients of awards under that plan, the number of shares to be covered by such awards and the terms and conditions of each award. The 2004 Stock Plan may be amended, altered or discontinued at the sole discretion of the Board of Directors at any time.

The 2004 Director Plan provides for the grant of up to 600 shares of common stock to non-employee directors (as defined in the Plan) of the Company, subject to adjustment in accordance with the terms of the Plan. The purpose of this Plan is to attract, retain and motivate non-employee directors of exceptional ability and to promote the common interests of directors and stockholders in enhancing the value of the Company’s common stock. Each non-employee director of the Company is eligible to participate in this Plan upon their election to the Board of Directors. The Plan provides for initial grants of 1 share of common stock to each newly elected non-employee director, annual grants of 3 shares of common stock as of the close of business on the date of each annual meeting of stockholders, and interim grants of 3 shares of common stock, or a pro rata portion thereof, to non-employee directors elected at meetings other than the annual meeting. Effective April 1, 2013, the Board of Directors amended this Plan to increase the limit of the value of any award of shares made to an eligible director to $100, valued on the date of award. The issue price of common stock awarded under this Plan is equal to the par value per share of the common stock. The Company accounts for the fair value of awards of common stock made under this Plan, net of the issue price, as director compensation expense in the period in which the award is made. During the years ended December 31, 2014, 2013 and 2012, the Company recorded $849, $600 and $300, respectively, as director compensation expense in connection with awards of 17 shares in 2014, 12 shares in 2013 and 11 shares in 2012 of common stock made to the non-employee directors of the Company pursuant to this Plan.

377 shares of common stock were available for future grants under the 2004 Stock Plan. The status of the Company’s stock options is summarized below:


	2014			2013			2012
(shares and options in thousands)	Options	Weighted Average Exercise Price		Options	Weighted Average Exercise Price		Options	Weighted Average Exercise Price
Outstanding at beginning of year	—	$	—	—	$	—	1,076	$	3.76
Exercised	—		—	—		—	(1,056)		3.70
Lapsed or canceled	—		—	—		—	(20)		7.12
Outstanding at end of year	—	$	—	—	$	—	—	$	—
Options exercisable at end of year	—			—			—
Shares available for future option grants (a)	377			1,445			1,667

^(a)

Assumes the issuance of options permitted by the 2004 Incentive Stock Plan.

As of December 31, 2012, all stock options were exercised or expired; consequently, no stock options were outstanding or exercised during 2014 or 2013. The aggregate intrinsic value of stock options exercised during 2012 was $39,165, determined as of the date of exercise.