Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2016

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

Schedule of impact on results of operations of recording share-based compensation

The following table summarizes the impact on MRV's results of operations of recording share-based compensation for the three and nine months ended September 30, 2016 and 2015 (in thousands):



	Three months ended				Nine months ended
	September 30,				September 30,
	2016		2015		2016		2015
Cost of goods sold	$	39	$	35	$	109	$	90
Product development and engineering	24		68		163		161
Selling, general and administrative	346		213		834		507
Total share-based compensation expense (1)	$	409	$	316	$	1,106	$	758


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

Schedule of 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.



Nine months ended September 30,	2016		2015
Risk-free interest rate	1.4	%	1.7	%
Dividend yield ₍₁₎	—		—
Volatility	46	%	43	%
Expected life (in years)	5.9		6.0


(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.