NOTE M - STOCK-BASED COMPENSATION

On May 13, 2010, the shareholders of the Company approved the 2010 Omnibus Incentive Plan (the “2010 Plan”) and prohibited future awards under the Amended and Restated 2002 Stock Incentive and Bonus Plan (the “2002 Plan”) and 2003 Non-Employee Directors’ Stock Incentive Plan (the “2003 Plan”). In conjunction with this approval, it was determined that no new awards will be granted under the 2002 Plan or the 2003 Plan; however, awards granted under either the 2002 Plan or the 2003 Plan that were outstanding will remain outstanding and continue to be subject to all of the terms and conditions of the 2002 Plan or the 2003 Plan, as applicable.

The 2010 Plan provides that 2.5 million shares of common stock are reserved for issuance, subject to adjustment as set forth in the 2010 Plan, provided, however, that only 1.5 million shares may be issued pursuant to the exercise of incentive stock options. Of the 2.5 million shares, approximately 2.0 million are shares that were newly authorized for issuance under the 2010 Plan and approximately 500,000 are unissued shares not subject to awards that had been carried over from the shares previously authorized for issuance under the terms of the 2002 Plan and the 2003 Plan. Unless earlier terminated by the Board of Directors, the 2010 Plan remains in effect until the earlier of (i) the date that is ten years from the date the plan is approved by the Company’s shareholders, namely May 13, 2020, or (ii) the date all shares reserved for issuance have been issued.

As of December 31, 2014, of the 2.5 million shares of common stock authorized for issuance under the Company’s 2010 Plan, awards relating to approximately 1.9 million shares have been issued of which awards relating to approximately 0.3 million shares have been subsequently forfeited and added back to the pool, leaving approximately 0.9 million shares available for future issuance. In 2014, shares issued under equity plans are issued from authorized and unissued shares. Total unrecognized stock-based compensation cost related to unvested restricted stock unit awards is approximately $14.8 million as of December 31, 2014, and is expected to be recognized as compensation expense over approximately four years.

See Note V - “Subsequent Events” to our consolidated financial statements in this Annual Report on Form 10-K for information regarding the 2016 Omnibus Incentive Plan.

Restricted Stock Units

For the years ended December 31, 2014, 2013 and 2012, the Company recognized a total of approximately $9.8 million, $9.4 million and $8.3 million, respectively, of stock-based compensation expense for the 2002, 2003 and 2010 plans. Of these amounts, approximately $0.2 million, $0.1 million, and $0.1 million, for the years ended December 31, 2014, 2013, and 2012, respectively, are associated with the Dosteon business and are included within “Loss from discontinued operations, net of income taxes.” Stock compensation expense, net of estimate forfeiture rate, relates to restricted stock units and performance-based restricted stock units.

The summary of restricted stock units, performance-based stock units, and weighted average grant date fair values are as follows:

	Employee Service-Based Awards				Employee Performance-Based Awards				Director Awards
	Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value		Units		Weighted Average Grant Date Fair Value

Nonvested at December 31, 2011(As Restated)	650,655		$	21.99	226,701		$	21.00	112,331		$	21.33

Granted	335,750		20.26		147,300		21.09		63,497		22.35
Vested	(232,787	)	20.35		(89,622	)	19.49		(54,472	)	19.65
Forfeited	(95,051	)	21.80		(143,077	)	21.21		—		—


Nonvested at December 31, 2012(As Restated)	658,567		$	21.71	141,302		$	21.84	121,356		$	22.62

Granted	302,261		29.66		54,300		29.66		49,751		32.50
Vested	(218,160	)	21.60		(44,700	)	21.49		(85,246	)	23.08
Forfeited	(32,624	)	23.36		(22,625	)	29.66		(997	)	25.72


Nonvested at December 31, 2013(As Restated)	710,044		$	25.05	128,277		$	23.89	84,864		$	27.91

Granted	285,332		33.65		41,713		36.19		36,794		30.08
Vested	(280,933	)	23.66		(52,616	)	22.72		(43,512	)	27.82
Forfeited	(43,708	)	29.66		(41,713	)	36.19		(5,314	)	22.43


Nonvested at December 31, 2014	670,735		$	28.99	75,661		$	24.70	72,832		$	29.46

During the years ended December 31, 2014, 2013 and 2012, approximately 377,000, 348,000, and 377,000 restricted stock units of common stock with an intrinsic value of $12.8 million, $11.0 million and $8.4 million, respectively, became fully vested. As of December 31, 2014, total unrecognized compensation expense related to unvested restricted stock units and unvested performance based restricted stock units for which the Company has concluded the performance condition was probable of achievement was approximately $15.0 million and the related weighted-average period over which it is expected to be recognized is approximately 2.5 years. The aggregate granted units have vesting dates through March 2017. The 2014, 2013 and 2012 aggregate grants had total estimated grant date fair values of $12.2 million, $12.2 million and $11.3 million, respectively.

Options

The summary of option activity and weighted average exercise prices are as follows:

	Employee Awards					Director Awards
				Weighted Average					Weighted Average
Weighted Average Exercise Price	Shares			Exercise Price		Shares			Exercise Price

Outstanding at December 31, 2011	434,500			$	13.45	28,259			$	11.99
Granted	—			—		—			—
Terminated	(1,500		)	15.60		—			—
Exercised	(230,000		)	14.82		(9,404		)	16.04

Outstanding at December 31, 2012	203,000			$	11.88	18,855			$	10.02
Granted	—			—		—			—
Terminated	(3,000		)	12.10		—			—
Exercised	(200,000		)	11.88		(5,535		)	11.21

Outstanding at December 31, 2013	—			$	—	13,320			$	9.53
Granted	—			—		—			—
Terminated	—			—		—			—
Exercised	—			—		(5,373		)	16.10

Outstanding at December 31, 2014	—			$	—	7,947			$	5.09


Aggregate intrinsic value at December 31, 2014	$	—				$	40,450
Weighted average remaining contractual term (years)	—					0.4

The intrinsic value of options exercised during the years ended December 31, 2014, 2013 and 2012 was approximately $0.1 million, $2.4 million and $3.6 million, respectively. Options exercisable under the Company’s stock-based compensation plans at December 31, 2014, 2013 and 2012 were 7,947 shares, 13,320 shares and 221,855 shares, respectively, with a weighted average exercise price of $5.09, $9.53 and $11.72, respectively, average remaining contractual terms of 0.4, 1.0 and 1.0, respectively, and aggregate intrinsic values of approximately $0.1 million, $0.1 million and $2.6 million, respectively. Cash received by the Company related to the exercise of options during the years ended December 31, 2014, 2013 and 2012 amounted to $0.1 million, $2.4 million and $3.6 million, respectively. As of December 31, 2014, 2013 and 2012, there is no unrecognized compensation cost related to stock option awards.

Information concerning outstanding and exercisable options as of December 31, 2014 is as follows:

	Options Outstanding and Exercisable
	Number of	Weighted Average
Range of	Options	Remaining	Exercise
Exercise Prices	or Awards	Life (Years)	Price
$5.09 to $5.09	7,947	0.4	$	5.09