Stock-Based Compensation

12 Months Ended

Dec. 31, 2015

D. Stock-Based Compensation

On August 4, 2011, the Company's stockholders approved the 2011 Incentive Plan. 500,000 shares of common stock are authorized for issuance under the 2011 Incentive Plan. The Company believes that such awards better align the interests of its employees with those of its shareholders. Option awards are generally granted with an exercise price 10 % above the market price of the Company's stock at the date of grant; those option awards generally have 5-year contractual terms and generally vest over three years. Restricted stock awards are granted at a value equal to the market price of the Company's common stock on the date of grant.

The following table summarizes the inputs to the option valuation model for the options granted during the years ended December 31, 2015 and 2014:

	2015	2014
Expected volatility	32% – 50%	44% – 54%
Dividend rate	0%	0%
Expected term (in years)	3.55	3.00 – 3.45
Risk-free rate	1.06% – 1.25%	0.36% – 1.05%
Forfeiture rate	0% – 10%	0% – 10%

The Company bases expected volatility on the weighted average historical stock volatility of the Company's common stock. There is no dividend rate. The expected term utilizes historical data to estimate the period of time that the options are expected to remain unexercised. The Company bases risk-free rates on the U.S. Treasury zero-coupon rates with a remaining term equal to the expected term of the option. The Company also estimates forfeitures at the time of grant and revises, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The following table summarizes information about stock options outstanding and exercisable at December 31, 2015 as well as activity during the year then ended:

	Number of Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at December 31, 2014		218,667			9.98		3.2	$	—
Granted during 2015		42,127			4.20		4.4		—
Exercised during 2015		—			—		—		—
Forfeited during 2015		(66,068	)		10.96		2.0		—
Expired during 2015		—			—		—		—
Outstanding at December 31, 2015		194,726		$	9.27		2.7	$	—
Exercisable at December 31, 2015		109,988		$	12.77		1.9	$	—

The weighted-average grant-date fair value of options granted during the years 2015 and 2014 was $4.10 and $4.47, respectively.

The following table summarizes information about the Company's unvested stock awards as of December 31, 2015, as well as activity during the year then ended:

	Number of Stock Awards			Weighted Average Grant Date Fair Value
Unvested at December 31, 2014		6,271		$	6.64
Granted during 2015		49,951			4.20
Vested during 2015		(54,375	)		4.26
Forfeited during 2015		(1,002	)		5.81
Unvested at December 31, 2015		845		$	5.81

As of December 31, 2015, there was approximately $59,000 of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the 2011 Incentive Plan. That cost is to be recognized over a weighted average period of 1.9 years. The total fair value of shares vested during the year ended December 31, 2015, was approximately $182,000.

The 2011 Incentive Plan had 216,308 shares remaining available for future issuance at December 31, 2015.