Stock-Based Compensation

9 Months Ended

Sep. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

Stock-based compensation for continuing operations consisted of the following: Stock-based compensation for discontinued operations was immaterial.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2016		2015		2016		2015
Stock-based compensation expense	$	0.2	$	0.3	$	0.6	$	1.7

We have stock-based compensation awards consisting of stock options, restricted stock and stock appreciation rights under four plans (collectively, the Stock Plans) which are described in detail in our 2015 Annual Report on Form 10-K. As of September 30, 2016, there were 2,368,019 shares available for grant under the 2011 Incentive Plan. No further shares were available for grant under any other stock incentive plan.

Stock Options

The following table summarizes our stock option activity:

	Stock Options		Weighted Average Exercise Price
Outstanding December 31, 2015	4,551,221		$	9.02
Granted	20,000		0.83
Exercised	(7,222	)	1.40
Canceled	(1,158,915	)	16.01
Forfeited	(506,014	)	1.52
Outstanding September 30, 2016	2,899,070		$	7.71
Exercisable as of September 30, 2016	2,288,411		$	9.37

The outstanding options are non-qualified and generally have a term of ten years. The following table summarizes our weighted average assumptions used in the Black Scholes valuation of stock options:

	Nine Months Ended
	September 30,
	2016		2015
Volatility	41.0	%	46.0	%
Risk-free interest rate	1.8	%	1.9	%
Expected life (months)	72		73
Dividend yield	—		—

As of September 30, 2016, there was $0.3 million of total unrecognized compensation expense related to non-vested stock options granted under our stock-based compensation plans (collectively, the "Stock Plans"). That expense is expected to be recognized over a weighted average period of 2.2 years.

Restricted Stock

The following table summarizes our restricted stock activity:

	Restricted Stock		Weighted Average Grant Date Fair Value Per Share
Nonvested as of December 31, 2015	1,162,776		$	2.34
Granted	—		—
Vested	(306,888	)	2.47
Forfeited	(102,407	)	2.33
Nonvested as of September 30, 2016	753,481		$	2.28

The cost of the awards is determined using the fair market value of the Company’s common stock on the date of the grant, and compensation is recognized on a straight-line basis over the requisite vesting period.

As of September 30, 2016, there was $1.4 million of total unrecognized compensation expense related to non-vested restricted stock granted under our Stock Plans. That expense is expected to be recognized over a weighted average period of 3.6 years.

Stock Appreciation Rights

During the nine months ended September 30, 2016 we did not grant any Stock Appreciation Rights ("SARs"). Outstanding SARs expire 5 years after the grant date and only vest when both stock price and revenue performance conditions specified by the terms of the SARs are met. Additionally, under the terms of the 2015 SARs, any cash payments to an individual under a 2015 vested SAR would reduce any cash payment received under any earlier SAR grant pertaining to that individual, if and when such earlier SAR vests. For the stock price condition, based on the terms of the awards, 50 percent of the SARs may vest if the 30-day average Imation stock price reaches $8 per share or more by December 31, 2017 and the remaining 50 percent of the SARs could vest if the 30-day average Imation stock price reaches $12 per share or more by December 31, 2017. Additionally, for the revenue performance condition, as a condition necessary for vesting, the net revenue of Nexsan must reach certain specified stretch targets by December 31, 2017. If exercised, the SARs require a cash payment to the holder in an amount based on the Imation stock price at the date of exercise as compared to the stock price at the date of grant. As of September 30, 2016, we had 1.1 million SARs outstanding compared to 3.8 million SARS outstanding as of December 31, 2015. The decrease was primarily due to the cancellation of SARs previously granted to IronKey employees. These SARs were canceled as a result of the sale of the IronKey business. We have not recorded any related compensation expense based on the applicable accounting rules. We will continue to assess these SARs each quarter to determine if any expense should be recorded.