STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2014

STOCK-BASED COMPENSATION

Note 7—STOCK-BASED COMPENSATION:

Stock Options

A summary of the status of the Company’s stock options as of March 31, 2014, and the activity during the three months then ended, is presented below:

Stock Options	Options
Outstanding at December 31, 2013		526,736
Granted		92,954
Forfeited		(8,164	)
Expired		(3,050	)
Exercised		(24,080	)
Outstanding at March 31, 2014		584,396
Exercisable at March 31, 2014		413,964

The fair value of stock options granted was estimated at the date of grant using the Black-Scholes option-pricing model based upon the assumptions noted in the following table:

	2014
Risk-free interest rate		1.49	%
Expected dividend yield		0.00	%
Expected lives (in years)		5.0
Expected volatility		55.00	%

The weighted-average grant date fair value of stock option awards granted during the three months ended March 31, 2014 was $15.01.

Restricted Stock

A summary of the status of the Company’s nonvested restricted stock as of March 31, 2014, and the activity during the three months then ended, is presented below:

Nonvested Restricted Stock Awards	Shares
Nonvested at December 31, 2013		213,475
Granted		53,164
Vested		(65,704	)
Forfeited		(5,261	)
Nonvested at March 31, 2014		195,674

The fair value of restricted stock grants was calculated using the market value of the Company’s Common Stock on the date of issuance. The weighted-average grant date fair value of restricted stock awards granted during the three months ended March 31, 2014 was $31.19.

Performance Share Awards

A summary of the Company’s performance share awards as of March 31, 2014, and the activity during the three months then ended, is presented below:

Performance Share Awards	Awards Activity			Maximum Shares Eligible to Receive
Outstanding at December 31, 2013		154,333			308,666
Granted		70,306			140,612
Vested		(42,442	)		(84,884	)
Forfeited		(7,308	)		(14,616	)
Outstanding at March 31, 2014		174,889			349,778

The performance awards issued in 2014 have both market and performance vesting conditions. The payout of fifty percent of the awards is based upon the Company’s total shareholder return compared to the total shareholder return of a relative peer group over a three-year period. These awards were valued using a Monte Carlo model. The weighted-average grant-date fair value of these shares awarded during the three months ended March 31, 2014 was $38.84. The payout of the remaining fifty percent of the awards is based upon the Company’s diluted earnings per share over a three-year period. These awards have been accounted for as awards with performance conditions using the market value of the Company’s Common Stock on the date of issuance. Expense on these awards is recognized over the performance period and is determined based on the probability that the performance targets will be achieved.