Stock-Based Compensation

12 Months Ended

Dec. 31, 2018

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

Stock-Based Compensation

Note 8 — Stock-Based Compensation

Stock compensation consisted of the following:

	Years Ended December 31,
	2018		2017
	(In millions)
Stock compensation expense	$	—	$	(0.1	)

We have stock-based compensation awards outstanding under four plans (collectively, the Stock Plans). We have stock options outstanding under our 2000 Stock Incentive Plan (2000 Incentive Plan) and 2005 Stock Incentive Plan (2005 Incentive Plan), and we have stock options and restricted stock outstanding under our 2008 Stock Incentive Plan (2008 Incentive Plan). We have stock options, restricted stock and SARs outstanding under our 2011 Stock Incentive Plan (2011 Incentive Plan). Restricted stock granted and stock option awards exercised are issued from our treasury stock. The purchase of treasury stock is discretionary and will be subject to determination by our Board of Directors each quarter following its review of our financial performance and other factors.

No further shares are available for grant under the 2000 Incentive Plan, the 2005 Incentive Plan or the 2008 Incentive Plan. Stock-based compensation awards issued under these plans generally have terms of ten years and, for employees, vest over a four-year period. Awards issued to directors under these plans become fully exercisable on the first anniversary of the grant date. Stock options granted under these plans are not incentive stock options. Exercise prices of awards issued under these plans are equal to the fair value of the Company’s stock on the date of grant. As of December 31, 2018, there were 10,802 stock-based compensation awards outstanding that were issued under these plans and consist of stock options and restricted stock.

The 2011 Incentive Plan was approved and adopted by our shareholders on May 4, 2011 and became effective immediately. The 2011 Incentive Plan was amended and approved by our shareholders on May 8, 2013. The 2011 Incentive Plan permits the grant of stock options, SARs, restricted stock, restricted stock units, dividend equivalents, performance awards, stock awards and other stock-based awards. The aggregate number of shares of our common stock that may be issued under all stock-based awards made under the 2011 Incentive Plan is 934,300. The number of shares available for awards, as well as the terms of outstanding awards, is subject to adjustments as provided in the 2011 Incentive Plan for stock splits, stock dividends, recapitalization and other similar events. Awards may be granted under the 2011 Incentive Plan until the earlier to occur of May 3, 2021 or the date on which all shares available for awards under the 2011 Incentive Plan have been granted; provided, however, that incentive stock options may not be granted after February 10, 2021.

Stock-based compensation awards issued under the 2011 Incentive Plan generally have a term of ten years and, for employees, vest over a three-year period. Awards issued to directors under this plan become fully exercisable on the first anniversary of the grant date. Stock options granted under these plans are not incentive stock options. Exercise prices of awards issued under these plans are equal to the fair value of the Company’s stock on the date of grant.

As of December 31, 2018, we had 41,956 of stock-based compensation awards consisting of stock options and restricted stock outstanding under the 2011 Incentive Plan. As of December 31, 2018, there were 288,295 shares available for grant under our 2011 Incentive Plan.

Stock Options

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used in the valuation model are supported primarily by historical indicators and current market conditions. Volatility was calculated using the historical weekly close rate for a period of time equal to the expected term. The risk-free rate of return was determined by using the U.S. Treasury yield curve in effect at the time of grant. The expected term was calculated on an aggregated basis and estimated based on an analysis of options already exercised and any foreseeable trends or changes in recipients’ behavior. In determining the expected term, we considered the vesting period of the awards, the contractual term of the awards, historical average holding periods, stock price history, impacts from recent restructuring initiatives and the relative weight for each of these factors. The dividend yield was based on the latest dividend payments made on or announced by the date of the grant.

The weighted average assumptions used in the valuation of options are not applicable for the years ended December 31, 2018 and 2017 as no options were granted over this time.

	2018	2017
Volatility	N/A	N/A
Risk-free interest rate	N/A	N/A
Expected life (months)	N/A	N/A
Dividend yield	N/A	N/A

The following table summarizes our stock option activity:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding December 31, 2016		286,706		$	77.51		3.8
Canceled		(71,400	)		80.23
Forfeited		(25,841	)		16.42
Outstanding December 31, 2017		189,466		$	84.81		1.8
Canceled		(166,708	)		84.96
Outstanding December 31, 2018		22,758		$	83.67		0.2
Exercisable as of December 31, 2017		22,758		$	83.67		0.2

No options were granted during the years ended December 31, 2018 and 2017. The aggregate intrinsic value of all outstanding stock options was $0.0 million as of December 31, 2018 and 2017. There were no options exercised in 2018 or 2017.

Total stock-based compensation expense associated with stock options related to continuing operations recognized in our Consolidated Statements of Operations for the years ended December 31, 2018 and 2017 was $(0.3) million and 0.1 million, respectively. As of December 31, 2018, there was no unrecognized compensation expense related to outstanding stock options.

No related stock-based compensation was capitalized as part of an asset for the years ended December 31, 2018 or 2017.

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, 2016		79,925		$	20.64
Granted		206,666			3.36
Vested		(5,404	)		10.00
Forfeited		(67,205	)		22.84
Nonvested as of December 31, 2017		213,982		$	3.53
Granted		160,146			1.13
Vested		(298,136	)		1.68
Forfeited		(45,992	)		4.86
Nonvested as of December 31, 2018		30,000		$	7.03

Of the restricted stock granted during the years ended December 31, 2018 and 2017, none of the shares were performance-based.

The total fair value of shares that vested during the years 2018 and 2017 was $0.5 million and $0.1 million, respectively.

Total stock-based compensation expense associated with restricted stock relating to continuing operations recognized in our Consolidated Statements of Operations for the years ended December 31, 2018 and 2017 was $0.3 million and $(0.2) million, respectively. This expense would result in a related tax benefit of $0.1 million and taxes of $0.1 million for the years ended December 31, 2018 and 2017, respectively. However, these tax benefits are included in the U.S. deferred tax assets which are subject to a full valuation allowance and due to the valuation allowance, we did not recognize the related tax benefit in 2018 or 2017. As of December 31, 2018, there was $0.1 million of total unrecognized compensation expense related to outstanding restricted stock. That expense is expected to be recognized over a weighted average period of 1.2 years.

No related stock-based compensation was capitalized as part of an asset for the years ended December 31, 2018 or 2017.

Stock Appreciation Rights (SARs)

The following table summarizes our stock appreciation rights activity:

	Stock Appreciation Rights
Outstanding as of December 31, 2016		209,962
Granted		—
Canceled		(138,526	)
Outstanding as of December 31, 2017		71,436
Granted		—
Canceled		(71,436	)
Outstanding as of December 31, 2018		—

The Company did not grant any SARs for the years ended December 31, 2018 and 2017. During the year ended December 31, 2015, we granted 0.3 million SARs under the 2011 Incentive Plan to certain employees associated with our former Nexsan and IronKey operations. These awards expired on December 31, 2017 and could only vest if both stock price and revenue performance conditions specified by the terms of the SARs were met. As of December 31, 2018, and 2017, we had not recorded any compensation expense associated with these SARs based on the applicable accounting rules. The stock price and performance conditions were not met for the outstanding SARs and such SARs were canceled.