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Stock Options and Stock Grants

We have entered into stock option agreements with certain officers, employees and directors. The stock options generally expire ten years from the date of grant.

Employee Stock Options

We follow FASB ASC Topic 718, Share-Based Payments, in which compensation expense is recognized only for share-based payments expected to vest. We recognized compensation expense related to stock options of $181 and $195 for the years ended December 31, 2015 and 2014, respectively.

As of December 31, 2015, there was approximately $204 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under our stock option plans. That cost is expected to be recognized over a remaining weighted-average period of 1.7 years.

The following table illustrates the various assumptions used to calculate the Black-Scholes option pricing model for options granted for all years presented:


	Years Ended December 31,
	2015			2014

Weighted-average risk-free interest rates:		1.7	%		2.0	%

Dividend yield:		0.00	%		0.00	%

Weighted-average expected life of the option:		7 years			7 years

Weighted-average expected stock price volatility:		95	%		95	%

Weighted-average fair value of the options granted:	$	0.36		$	0.42

We use the Black–Scholes option pricing model to determine the fair value of stock based compensation. The Black–Scholes model requires us to make several assumptions, including the estimated length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of our common stock price over the expected term and estimated forfeitures. Expected price volatility of the fiscal 2015 and 2014 grants is based on the daily market rate changes of our stock going back to January 1, 2007. The shares granted in fiscal 2015 and 2014 had a vesting period of three years and a contractual life of 10 years. Forfeitures were estimated at 4% and 4% for the years ended December 31, 2015 and 2014, based on our historical experience. The Black–Scholes model also requires a risk free interest rate, which is based on the U.S. Treasury yield curve in effect at the time of the grant, and the dividend yield on our common stock, which is assumed to be zero since we do not pay dividends and have no current plans to do so in the future. Changes in these assumptions can materially affect the estimate of fair value of stock based compensation and consequently, the related expense recognized on the statement of operations. We recognize stock based compensation expense on a straight-line basis.

The following table summarizes the option activity for our employees and directors during the year ended December 31, 2015:


	(rounded)			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)
								Aggregate Intrinsic Value
Options	Shares							Aggregate Intrinsic Value

Outstanding on January 1, 2015		2,440,000		$	1.15

Granted		461,000		$	0.44
Exercised		(69,000	)	$	0.37
Forfeited or expired		(258,000	)	$	2.20


Outstanding on December 31, 2015		2,574,000		$	0.95		5.5	$	41


Exercisable on December 31, 2015		1,656,000		$	1.21		5.5	$	41


Shares available for grant		445,000

The aggregate intrinsic value in the table above is based on our closing stock price of $0.40 on the last business day for the year ended December 31, 2015.

During the years ended December 31, 2015 and 2014, the total intrinsic value of our stock options exercised was $10 and $4, respectively. Cash received for option exercises was $26 and $10 during the years ended December 31, 2015 and 2014, respectively. We had approximately 69,000 options exercised during the year ended December 31, 2015, compared to 35,000 in 2014. Based on our election of the “with and without” approach, no realized tax benefits from stock options were recognized for the years ended December 31, 2015 and 2014.

Stock Appreciation Rights

Prior to 2011, we granted our Outside Directors stock appreciation rights (SARs) under our Amended and Restated 2006 Stock Appreciation Rights Plan and subsequently under our 2010 Equity Plan. The change in fair value of the awards granted during prior years is included in non-cash compensation expense for the years ended December 31, 2015 and 2014. The SARs granted vested immediately and are payable upon the directors’ removal or resignation from the position of director. These awards are accounted for as liability awards, included in accrued expenses as of December 31, 2015 and 2014, and adjusted to fair value each reporting period. The fair value of the liability on December 31, 2015 and 2014 was less than $1.

Restricted Stock

As of both December 31, 2015 and 2014, we did not have any unvested non-director restricted stock or performance shares outstanding.