Share-Based Compensation

6 Months Ended

Jun. 30, 2016

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

MRV records share-based compensation expense at fair value. The following table summarizes the impact on MRV's results of operations of recording share-based compensation for the three and six months ended June 30, 2016 and 2015 (in thousands):



	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Cost of goods sold	$	28	$	25	$	70	$	55
Product development and engineering	63		44		139		93
Selling, general and administrative	259		167		488		294
Total share-based compensation expense (1)	$	350	$	236	$	697	$	442


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

During the three and six months ended June 30, 2016, the Company granted 240,039 stock options with a related fair value of $4.86 per option and 88,869 restricted shares with a related fair value $10.95 per share. During the three and six months ended June 30, 2015, the Company granted 197,848 stock options with a related fair value of $4.16 per option and 71,872 restricted shares with a related fair value of $9.63 per share. No stock options or restricted shares were granted during the three months ended March 31, 2016 and 2015. As of June 30, 2016, the total unrecognized share-based compensation balance for unvested options, net of expected forfeitures, was $2.7 million and is expected to be amortized over a weighted-average period of 2.3 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.



Six months ended June 30,	2016		2015
Risk-free interest rate	1.4	%	1.7	%
Dividend yield ₍₁₎	—		—
Volatility	46	%	43	%
Expected life (in years)	5.9		5.9


(1)	As the Company does not pay a dividend on a regular basis, and dividends paid in the past have been special in nature, a dividend rate of zero was used.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details