Stock options are granted under the Company’s long-term incentive plan and have an exercise price that may not be less than the fair market value of the underlying shares on the date of grant. In general, stock options granted will become exercisable over a period determined by the Compensation Committee which in the past has been a five year life, with the options vesting over a service period of three to five years. A portion of the stock options granted in March 2013, 2012, and 2011 were vested immediately with the others vesting over a three year period. In addition, stock options will become exercisable upon a change in control, unless provided otherwise by the Compensation Committee. At December 31, 2013, there were 1,523,713 shares subject to options authorized but not granted.

On October 21, 2013, the Company issued 100,000 shares of service based restricted stock with a grant date fair value of $5.89 per share. The vesting of these shares is dependent upon the employee’s continued service with the Company. The shares will vest evenly over a service period of 4 years. As of December 31, 2013, no shares have vested or been forfeited.  

For the years ended December 31, 2013, 2012 and 2011, the Company recognized non-cash compensation expense of $3.0 million, $2.4 million and $2.2 million, respectively. These amounts were recorded as general and administrative expense. Because the Company does not pay significant United States taxes, no amounts were recorded for tax benefits.

A summary of the stock option activity for the year ended December 31, 2013 is provided below:

The intrinsic value of a stock option is the amount by which the current market value of the underlying stock exceeds the exercise price of the option.

As of December 31, 2013, unrecognized compensation costs totaled $2.6 million. The expense is expected to be recognized over a weighted average period of 2.0 years.

A summary of the values of options granted and exercised for each of the years ended December 31, 2013, 2012 and 2011 is provided below:

The Company received cash proceeds of $3.7 million, $3.3 million and $1.9 million from issuance of stock related to options exercised in 2013, 2012 and 2011, respectively.

The valuation of the options granted is based upon a Black Scholes model. The table below summarizes the assumptions used to value the options issued in 2013 and 2012.

The Company has no set policy for sourcing shares for options grants. Historically the shares issued under options grants have been new shares.