9. SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2015

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

SHARE-BASED COMPENSATION

We have a share-based compensation plan, the “2003 Directors, Officers and Consultants Stock Option, Stock Warrant and Stock Award Plan” (the “Plan”). Awards of stock options and stock granted under the Plan have vesting periods of three years. Some awards of stock have performance criteria as an additional condition of vesting. Once vested, stock options may be exercised for up to five years. Share-based compensation expense related to awards is based on the fair value at the date of grant, and is recognized over the requisite expected service period, net of estimated forfeitures. Under the Plan, the total number of options permitted is 15 percent of issued and outstanding common shares.

Summary of Nonvested Shares of Restricted Stock

The following table summarizes the activity of our nonvested restricted shares for the years ended December 31, 2015 and 2014.

	Restricted Shares			Weighted- Average Grant-Date Fair Value
Nonvested at December 31, 2013		839		$	2.00
Granted		30			2.00
Vested		(352	)		1.96
Nonvested at December 31, 2014		517		$	2.01
Granted		600			0.38
Vested		(253	)		2.02
Nonvested at December 31, 2015		864		$	2.01

In December 2015, we granted 600 shares of restricted stock to management, par value $0.001 per share. These restricted shares are service-based and have a fair value grant price of $0.38 per share, based on the closing price of Deep Down’s common stock on that day (the “2015 Stock Grant”). The restrictions on the 2015 Stock Grant will lapse with respect to 200 shares on January 1, 2016, 200 shares on December 14, 2016 and 200 shares on December 17, 2017.

For the years ended December 31, 2015 and 2014, we recognized a total of $517 and $693, respectively, of share-based compensation expense related to restricted stock awards, which is included in selling, general and administrative expenses in the accompanying consolidated statements of operations. The unamortized estimated fair value of nonvested shares of restricted stock awards was $456 at December 31, 2015. These costs are expected to be recognized as expense over a weighted average period of 1.54 years.

Summary of Stock Options

During the year ended December 31, 2015, 50 unexercised stock options, previously granted in June 2011, were cancelled. Based on the shares of common stock outstanding at December 31, 2015, there were approximately 2,345 options available for grant under the Plan as of that date. We determine the fair value of stock options on the date of the grant using the Black-Scholes option pricing model.

For the years ended December 31, 2015 and 2014, we recognized a total of $0 and $69, respectively, of share-based compensation expense related to outstanding stock option awards, which is included in selling, general and administrative expenses in the accompanying consolidated statements of operations. The unamortized portion of the estimated fair value of outstanding stock options was $0 at December 31, 2015.

The following table summarizes our stock option activity for the years ended December 31, 2015 and 2014:

	Shares Underlying Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)
Outstanding at December 31, 2013		945		$	1.98		1.3
Cancellations & Forfeitures		(620	)	$	2.08
Outstanding at December 31, 2014		325		$	1.80		1.4
Cancellations & Forfeitures		(50	)	$	1.80
Outstanding at December 31, 2015		275		$	1.80		0.4
Exercisable at December 31, 2015		275		$	1.80		0.4

The aggregate intrinsic value is based on the closing price of $0.46 on December 31, 2015. As of December 31, 2015, the aggregate intrinsic value of stock options outstanding and stock options exercisable was $0. The total fair value of stock options vested during the year ended December 31, 2015 was $0.