Common Stock

The Company’s Certificate of Incorporation, as amended November 9, 2009, authorizes the Company to issue up to 80 million shares of common stock, par value $0.0001 per share, and 100,000 shares of one or more series of preferred stock, par value $0.0001 per share.

A reconciliation of the changes in common shares issued is as follows:



	Year ended December 31,
	2013	2012
Shares issued at the beginning of the year	53,123,978	51,957,652
Issued to purchase Florida Chemical Company	3,284,180	—
Issued upon exercise of warrants	267,000	348,350
Issued from restricted stock units	217,089	—
Issued as restricted stock award grants	802,164	750,476
Issued upon exercise of stock options	571,500	67,500
Shares issued at the end of the year	58,265,911	53,123,978

Stock-Based Incentive Plans

Stockholders approved long term incentive plans in 2010, 2007, 2005 and 2003 (the “2010 Plan,” the “2007 Plan,” the “2005 Plan” and the “2003 Plan,” respectively) under which the Company may grant equity awards to officers, key employees, and non-employee directors in the form of stock options, restricted stock and certain other incentive awards. The maximum number of shares that may be issued under the 2010 Plan, 2007 Plan and 2005 Plan are 6.0 million, 2.2 million and 1.9 million, respectively. A December 31, 2013, the Company had a total of 0.3 million shares remaining to be granted under the 2010 Plan, 2007 Plan and 2005 Plan. Shares may no longer be granted under the 2003 Plan.

Stock Options

All stock options are granted with an exercise price equal to the market value of the Company’s common stock on the date of grant. Options expire no later than ten years from the date of grant and generally vest in four years or less. Proceeds received from stock option exercises are credited to common stock and additional paid-in capital, as appropriate. The Company uses historical data to estimate pre-vesting option forfeitures. Estimates are adjusted when actual forfeitures differ from the estimate. Stock-based compensation expense is recorded for all equity awards expected to vest.

The fair value of stock options at the date of grant is calculated using the Black-Scholes option pricing model. The risk free interest rate is based on the implied yield of U.S. Treasury zero-coupon securities that correspond to the expected life of the option. Volatility is estimated based on historical and implied volatilities of the Company’s stock and of identified companies considered to be representative peers of the Company. The expected life of awards granted represents the period of time the options are expected to remain outstanding. The Company uses the “simplified” method which is permitted for companies that cannot reasonably estimate the expected life of options based on historical share option exercise experience. The Company does not expect to pay dividends on common stock. No options were granted to employees during 2013 and 2012. Assumptions used in the Black-Scholes option pricing model for stock options granted in 2011 are as follows:



	Year ended December 31, 2011
Risk-free interest rate	.94%-1.825%
Expected volatility of common stock	67.7%-70.3%
Expected life of options in years	3.50*-4.00
Dividend yield	—	%
Vesting period in years	3.5-4.0

*Grants were made to an optionee for whom the Company was able to reasonably estimate the expected life of the award.

The Black-Scholes option valuation model was developed to estimate the fair value of traded options that have no vesting restrictions and are fully-transferable. Because option valuation models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value calculation. The Company’s options are not characteristic of traded options; therefore, the option valuation models do not necessarily provide a reliable measure of the fair value of options.

Stock option activity for the year ended December 31, 2013 is as follows:



Options	Shares		Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding as of January 1, 2013	2,457,586		$	5.65
Exercised	(571,500	)	7.70
Forfeited	(5,000	)	1.38
Expired	(17,044	)	22.40
Outstanding as of December 31, 2013	1,864,042		$	4.95	6.26	$	28,253,321
Vested or expected to vest at
December 31, 2013	1,862,960		$	4.95	6.26	$	28,216,770
Options exercisable as of
December 31, 2013	1,836,942		$	4.98	6.25	$	27,763,907

The weighted-average grant-date fair value of stock options granted during the year ended December 31, 2011 was $8.47 per share. The total intrinsic value of stock options exercised during the years ended December 31, 2013, 2012 and 2011 was $5.6 million, $0.6 million and $0.2 million, respectively. The total fair value of stock options vesting during the years ended December 31, 2013, 2012 and 2011 was $4.2 million, $0.5 million and $0.5 million, respectively.

At December 31, 2013, the Company had less than $0.1 million of measured but unrecognized compensation expense related to non-vested stock options. This cost is expected to be recognized over a weighted-average period of 0.9 years.

Restricted Stock

The Company grants employees either time-vesting or performance-based restricted shares in accordance with terms specified in the Restricted Stock Agreements ("RSAs"). Time-vesting restricted shares vest after a stipulated period of time has elapsed subsequent to the date of grant, generally three to four years. Certain time-vested shares have also been issued with a portion of the shares granted vesting immediately. Performance-based restricted shares are issued with performance criteria defined over a designated performance period and vest only when, and if, the outlined performance criteria are met. During the year ended December 31, 2013, approximately 71% of the restricted shares granted were time-vesting and the remainder were performance-based. Grantees of restricted shares retain voting rights for the granted shares.

Restricted stock share activity for the year ended December 31, 2013 is as follows:



Restricted Stock Shares	Shares		Weighted- Average Fair Value at Date of Grant
Non-vested at January 1, 2013	1,324,290		$	9.15
Granted	629,135		15.17
RSAs converted from 2012 restricted stock units	173,029		11.04
Vested	(943,447	)	8.87
Forfeited	(115,352	)	13.50
Non-vested at December 31, 2013	1,067,655		$	12.78

The weighted-average grant-date fair value of restricted stock granted during the years ended December 31, 2013, 2012 and 2011 was $15.17, $11.03 and $8.79 per share, respectively. The total fair value of restricted stock that vested during the years ended December 31, 2013, 2012 and 2011 was $8.4 million, $5.4 million, and $7.2 million, respectively.

At December 31, 2013, there was $8.5 million of unrecognized compensation expense related to non-vested restricted stock. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 1.8 years.

Restricted Stock Units

During the year ended December 31, 2013, the Company granted performance-based restricted stock units ("RSUs") that will be converted into 175,576 shares of common stock. One-third of these shares will be issued as common stock in 2014 and the remaining 117,050 shares will be converted into RSAs that will vest in 2015 and 2016.

Restricted stock unit share activity for the year ended December 31, 2013 is as follows:



Restricted Stock Unit Shares	Shares		Weighted- Average Fair Value at Date of Grant
RSU share equivalents at January 1, 2013	390,118		$	11.04
Issued as shares in 2013	(217,089	)	11.04
2012 RSUs converted to RSAs in 2013	(173,029	)	11.04
Share equivalents earned in 2013	175,576		16.35
RSU share equivalents at December 31, 2013	175,576		$	16.35

At December 31, 2013, there was $1.9 million of unrecognized compensation expense related to 2013 restricted stock units. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 1.9 years.

Employee Stock Purchase Plan

The Company's Employee Stock Purchase Plan (ESPP) was approved by stockholders on May 18, 2012. The Company registered 500,000 shares of its common stock, currently held as treasury shares, for issuance under the ESPP. The purpose of the ESPP is to provide employees with an opportunity to purchase shares of the Company's common stock through accumulated payroll deductions. The ESPP allows participants to purchase common stock at a purchase price equal to 85% of the fair market value of the common stock on the last business day of a three-month offering period which coincides with calendar quarters. The first quarterly offering period began on October 1, 2012. Payroll deductions may not exceed 10% of an employee's compensation and participants may not purchase more than 1,000 shares in any one offering period. The fair value of the discount associated with shares purchased under the plan is recognized as share-based compensation expense and was $0.1 million and less than $0.1 million in 2013 and 2012, respectively. The total fair value of the shares purchased under the plan during 2013 and 2012 was $0.9 million and $0.2 million, respectively. The employee cost associated with participation in the plan was satisfied through payroll deductions.

Share-Based Compensation Expense

Non-cash share-based compensation expense related to stock options, restricted stock, restricted stock unit grants and stock purchased under the Company's ESPP was $10.9 million, $13.4 million and $7.4 million during the years ended December 31, 2013, 2012 and 2011, respectively.

Treasury Stock

The Company accounts for treasury stock using the cost method and includes treasury stock as a component of stockholders’ equity. During the years ended December 31, 2013 and 2012, the Company purchased 448,121 shares and 166,334 shares, respectively, of the Company’s common stock at market value as payment of income tax withholding owed by employees upon the vesting of restricted shares and the exercise of stock options. Shares issued as restricted stock awards to employees that were forfeited are accounted for as treasury stock. Shares surrendered for the exercise of stock options were 237,267 during the year ended December 31, 2013. These surrendered shares are also accounted for as treasury stock.

During the years ended December 31, 2013 and 2012, JP Morgan Chase & Co. returned 2,439,558 shares and 659,340 shares, respectively, of the Company’s common stock that had been borrowed under the Share Lending Agreement. These shares are now included in treasury stock.

Stock Repurchase Plan

In November 2012, the Company's Board of Directors authorized the repurchase of up to $25 million of the Company's common stock. Repurchases may be made in the open market or through privately negotiated transactions. Through December 31, 2013, the Company has not repurchased any of its common stock through this repurchase program.