10. Shared-Based Compensation

12 Months Ended

Dec. 31, 2016

Disclosure Of Compensation Related Costs

Share-based compensation - Note 10

10. SHARE-BASED COMPENSATION

We use the straight-line attribution method to allocate the fair value of share-based compensation awards over the requisite service period for each award. The valuation of and accounting for share-based awards includes a number of complex and subjective estimates. These estimates include, but are not limited to, the future volatility of our stock price, future stock option exercise behaviors, estimated employee turnover, and award forfeiture rates. We recognized $1.2 million, $1.0 million, and $713,000 in share-based compensation expense for the years ended December 31, 2016, 2015, and 2014, respectively. During the year ended December 31, 2014, we reduced the share-based compensation expense by $344,000 to adjust estimated forfeitures to actual.

Description of Incentive Plans

We currently have two share-based incentive plans; the 2013 Incentive Plan and the Independent Director Stock Option Plan.

The 2013 Incentive Plan has 7.8 million shares authorized, of which 2.0 million shares were available for awards as of December 31, 2016. The Independent Director Stock Option Plan has 113,000 shares authorized, of which 19,000 shares or awards relating thereto were issued and outstanding as of December 31, 2016. In June 2008, we determined not to issue additional options from the Independent Director Stock Option Plan.

Options Valuation Methodology and Assumptions

We use the Black-Scholes option valuation model to determine the fair value of options granted and use the closing price of our common stock as the fair market value of our stock on that date.

We consider historical stock price volatilities, volatilities of similar companies and other factors in determining estimates of future volatilities.

We use historical lives, including post-termination exercise behavior, as the basis for estimating expected lives.

Risk-free rates are based on the U.S. Treasury Yield Curve, as published by the U.S. Treasury.

The following table summarizes the weighted-average valuation assumptions and weighted-average grant date fair value of options granted during the periods shown below:

		Year Ended December 31,
		2016		2015		2014
Assumptions (weighted-average)
Volatility		84%		98%		100%
Expected term (in years)		4.0		4.0		4.0
Risk-free rate		1.2%		1.3%		1.3%
Expected dividends		0.0%		0.0%		0.0%
Pre-vest forfeiture rate		8.5%		8.5%		8.5%
Grant date fair value of options granted	$	1.12	$	2.20	$	1.22

Options Activity and Positions

The following table summarizes activity and positions with respect to options for the periods shown below (in thousands):

				Weighted-average
				remaining		Aggregate
			Weighted-average	contractual		intrinsic
Options	Shares		exercise price	term (in years)		value
Outstanding as of January 1, 2014	1,905	$	8.86	7.4	$	1,500
Granted	717		1.78	-		-
Exercised	-		-	-		-
Forfeited or expired	(195)		9.49	-		-
Outstanding as of December 31, 2014	2,427		6.72	7.4		18,700
Granted	849		3.23	-		-
Exercised	(23)		1.88	-		-
Forfeited or expired	(107)		13.98	-		-
Outstanding as of December 31, 2015	3,146		5.56	7.3		1,613
Granted	1,167		1.83	-		-
Exercised	(3)		1.77	-		-
Forfeited or expired	(307)		12.58	-		-
Outstanding as of December 31, 2016	4,003	$	3.94	7.3	$	4
Vested and expected to vest as of December 31, 2016	3,747	$	4.06	7.2	$	3
Exercisable as of December 31, 2016	2,032	$	5.61	5.8	$	-

The intrinsic value of options exercised during the year ended December 31, 2016 was $3,000 compared to $29,000 in 2015. There were no option exercises during the year ended December 31, 2014.

The total grant date fair value of options vested during the years ended December 31, 2016, 2015 and 2014 was $998,000, $591,000 and $3.3 million, respectively. As of December 31, 2016, our unamortized share-based compensation was $2.4 million related to options, which we plan to amortize over the next 2.7 years.

As of December 31, 2016, our unamortized share-based compensation related to the RSUs was $50,000, which we plan to amortize over the next five months.