NOTE 9 - EQUITY-BASED COMPENSATION

Our equity-based awards were issued under our 2011 Equity Incentive Plan which provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, and other equity-based award or incentive awards up to an aggregate of 2,318,290 shares of common stock. Stock options granted may be either incentive stock options or nonqualified stock options. Vesting terms may vary with each grant, and stock option terms are generally ten years. We have outstanding equity-based awards in the form of stock options and restricted stock awards. All of our existing equity-based awards are classified as equity awards.

Stock Options

Stock option activity for first six months 2013 follows:

	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Terms	Aggregate Intrinsic Value (Current Value Less Exercise Price)
		(Per share)		(In years)	(in thousands)
Outstanding, December 31, 2012	893,000	$	9.75	—	$	—
Granted	—
Exercised	—
Forfeited	—

Outstanding, June 30, 2013	893,000	$	9.75	8	$	—

Exercisable, June 30, 2013	357,200	$	9.75	8	$	—

At June 30, 2013, the exercise price of our outstanding options exceeds the market price of our common stock.

Time-Based Restricted Stock Awards

On March 1, 2013, we awarded time-based restricted stock awards for 106,518 shares of common stock to our executive officers. These awards vest over a three year period based on continued service (25% on February 28, 2014 and 2015 and 50% on February 28, 2016), or upon a change in control. The holders of these awards have the right to vote the related shares of common stock and receive all dividends declared and paid whether or not vested.

Time-based restricted stock activity for first six months 2013 follows:

	Number of Shares	Weighted Average Grant Date Fair Value		Aggregate Current Value
		(Per share)		(In thousands)
Non-vested, December 31, 2012	82,603	$	7.78	$	—
Granted	106,518	$	9.78
Vested	27,535	$	7.78
Forfeited	—

Non-vested, June 30, 2013	161,586	$	9.10	$	1,527

Performance-Based Restricted Stock Awards

On March 1, 2013, we awarded performance-based restricted stock awards for 185,572 shares of common stock to our executive officers. These awards vest ratably over the next three years (2013, 2014 and 2015) subject to the attainment of certain performance goals and continued service, or upon a change in control. The holders of these awards have the right to vote the related shares of common stock and any dividends declared will be accumulated and will be subject to the same vesting conditions as the awards.

Performance-based restricted stock activity for first six months 2013 follows:

	Number of Shares	Weighted Average Grant Date Fair Value		Aggregate Current Value
		(Per share)		(In thousands)
Non-vested, December 31, 2012	82,602	$	7.78	$	—
Granted	185,572	$	9.78
Vested	—
Forfeited	—

Non-vested, June 30, 2013	268,174	$	9.16	$	2,534

Director Stock Awards

On June 13, 2013, we granted 29,228 shares of common stock to our directors as a part of their compensation plan. These shares vested upon grant.

Our directors have the option to receive shares of our common stock in lieu of cash for their director fees. In first six months 2013, we issued 3,023 shares of common stock for director fees.

Equity-Based Compensation Expense

Equity-based compensation expense for second quarter and first six months 2013 and 2012 follows (in thousands):

	Second Quarter				First Six Months
	2013		2012		2013		2012

Included in corporate general and administrative salaries and other compensation in the statements of operations:
Stock options	$	156	$	126	$	311	$	252
Time-based restricted stock	167		72		276		72
Performance-based restricted stock	231		71		371		71

	554		269		958		395
Included in corporate general and administrative other in the statements of operations:
Director stock	295		120		312		120

	$	849	$	389	$	1,270	$	515

The amount of expense may be subject to adjustment in future periods depending upon the attainment of specific goals, which affect the vesting of the performance-based restricted stock, or a change in the forfeiture assumptions.

Unrecognized equity-based compensation expense for all non-vested awards was $5.0 million at June 30, 2013. We expect to recognize this cost over a remaining weighted-average period of two years.