Share-Based Compensation

3 Months Ended

Mar. 31, 2014

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

Share-Based Compensation

Share-Based Compensation

MRV records share-based compensation expense in accordance with ASC Topic 718Compensation - Stock Compensation. The following table summarizes the impact on MRV's results of operations of recording share-based compensation for the three months ended March 31, 2014 and 2013 (in thousands):

	Three months ended
	March 31,
	2014		2013
Cost of goods sold		$20		$17
Product development and engineering	23		10
Selling, general and administrative	104		192
Total share-based compensation expense (1)		$147		$219

(1) Income tax benefits realized from stock option exercises and similar awards were immaterial in both periods.

The Company granted no stock options and no restricted shares during the three months ended March 31,2014 and the three months ended March 31,2013. As of March 31, 2014, the total unrecorded deferred share-based compensation balance for unvested securities, net of expected forfeitures, was$0.5 million, which is expected to be amortized over a weighted-average period of1.1 years.

Valuation Assumptions

MRV uses the Black-Scholes option pricing model to estimate the fair value of stock option awards or related modifications. The Black-Scholes model requires the use of subjective and complex assumptions including the option's expected life and the underlying stock price volatility. MRV bases volatility on the Company's historical quoted prices and peer company data. There were no options modified during the three months ended March 31, 2014 and 2013, respectively.