Note 17 – Stock-Based Compensation Arrangements

We grant restricted stock, performance units and stock options to employees and directors as incentive compensation. The restricted stock and options generally vest over three years. The vesting of these shares and options is dependent upon the continued service of the grantees with Endeavour. Upon the occurrence of a change in control, each outstanding share of restricted stock and stock option will immediately vest.

At December 31, 2014, total compensation cost related to nonvested awards not yet recognized was approximately $2.1 million and is expected to be recognized over a weighted average period of less than two years. For the year ended December 31, 2014, we included approximately $0.9 million of stock-based compensation in capitalized G&A in property and equipment.

Stock Options

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. We have not granted any options during the last three years.

Information relating to stock options, including notional stock options, is summarized as follows:



		Weighted		Weighted
	Number of	Average		Average
	Shares	Exercise		Contractual	Aggregate
	Underlying	Price per		Life in	Intrinsic
	Options	Share		Years	Value
Balance outstanding January 1, 2012	299	$	8.95
Exercised	(1)		6.73
Expired	(110)		12.04

Balance outstanding - December 31, 2012	188	$	6.72	5.5	$	85

Exercised	(23)		3.78
Forfeited	(45)		5.98

Balance outstanding - December 31, 2013	120	$	7.55	4.3	$	55

Expired	(13)		5.76

Balance outstanding - December 31, 2014	107	$	7.76	0.8	$	—
Currently exercisable - December 31, 2014	107	$	7.76	0.8	$	—

Information relating to stock options outstanding at December 31, 2014 is summarized as follows:



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number of Options Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price Per Share		Number Exercisable	Weighted Average Exercise Price Per Share
Less than $5.00	32	2.0	$	4.36	32	$	4.36
$5.00 - $8.00	—	—		—	—		—
Greater than $8.00	75	0.3		9.24	75		9.24

Total	107	0.8	$	7.76	107	$	7.76

Restricted Stock

At December 31, 2014, our employees and directors held 0.7 million restricted shares of our common stock that vest over the service period of up to three years. The restricted stock awards were valued based on the closing price of our common stock on the measurement date, typically the date of grant, and compensation expense is recorded on a straight-line basis over the restricted share vesting period.

Status of the restricted shares as of December 31, 2014 and the changes during the year ended December 31, 2014 are presented below:



			Weighted
			Average Grant
			Date Fair
	Number of		Value per
	Shares		Share
Balance outstanding - January 1, 2014		628	$	7.44
Granted		693		4.53
Vested		(353)		8.29
Forfeited		(228)		5.35

Balance outstanding - December 31, 2014		740	$	4.95

Total grant date fair value of shares vesting during the period	$	3,137

Non-Cash stock-based compensation is recorded in general and administrative (“G&A”) expenses or capitalized G&A as follows:



		Year Ended
		December 31, 2014
	2014		2013		2012

G&A Expenses (Income) (1)	$	(3)	$	3,607	$	4,641
Capitalized G&A		942		1,236		1,634
Total non-cash stock-based compensation	$	939	$	4,843	$	6,275

⁽¹⁾

Decrease in non-cash stock-based compensation recorded in G&A Expenses in 2014 is due to forfeitures which exceeded non-cash stock-based compensation expense recorded for the year.

Performance-Based Share Awards

Certain of our officers and employees receive a target number of performance shares under individual Performance Unit Award Agreements. The performance shares will be earned as the relative total shareholder return ranking is measured among a designated peer group at the end of a three-year performance period. Payouts will be based on a predetermined schedule at the end of the performance period. The shares issued may range from 0% to 200% of the number of Performance Units specified in the agreements. The fair value of each performance-based award is estimated on the date of grant using a Monte Carlo simulation model.

Status of the performance-based share awards as of December 31, 2014 and the changes during the year ended December 31, 2014 are presented below:



		Weighted
		Average Grant
		Date Fair
	Number of	Value per
	Shares	Share
Balance outstanding - January 1, 2014	707	$	11.01
Granted	516		8.29
Expired	(96)		16.72
Forfeited	(703)		10.04

Balance outstanding - December 31, 2014	424	$	8.04

For discussion of the potential impact of our filings under Chapter 11 of the Bankruptcy Code on our equity, see Note 3 – Voluntary Reorganization under Chapter 11.