Share-Based Compensation and Warrants

6 Months Ended

Jun. 30, 2014

Share-Based Compensation and Warrants

Note 9. Share-Based Compensation and Warrants

Share-Based Compensation

The following table summarizes stock option activity under the 2008 Long-Term Incentive Plan and the 2000 Equity Incentive Plan for the six months ended June 30, 2014:

					Weighted
					Average
			Weighted		Remaining
			Average		Contractual
	Options		Exercise Price		Life (Years)
Outstanding at December 31, 2013		548,566	$	58.22
Granted		—		—
Exercised		—		—
Outstanding at June 30, 2014		548,566	$	58.22		7.25
Exercisable at June 30, 2014		352,061	$	45.10		6.50

The fair values of option awards granted during the periods presented were estimated at the grant date using a Black-Scholes option pricing model with the following assumptions: 

	2013		2014
Expected volatility	54.06% - 55.44%		n/a
Risk-free interest rate	0.91% - 1.10%		n/a
Expected life (in years)	5.19 - 6.00		n/a
Expected dividend yield		0.00%	n/a

The weighted average grant date fair value for the options granted in the six months ended June 30, 2013 was $41.75. The Company did not grant any stock options in the six months ended June 30, 2014.

As of June 30, 2014, there were approximately $6.0 million of unrecognized compensation costs related to non-vested stock options. These costs are expected to be recognized over a remaining weighted average vesting period of 0.8 years.

The compensation expense recognized for outstanding share-based awards was $1.0 million for the three months ended June 30, 2013 and 2014, and $3.1 million and $2.0 million for the six months ended June 30, 2013 and 2014, respectively.

Warrants

In October 2010, the Company issued warrants to purchase 160,408 shares of its common stock at an exercise price of $1.00 per share, which expire in May 2020, in connection with (1) the issuance of subordinated notes payable to a shareholder in April and May of 2010 and (2) the execution of the First Amendment to the Fifth Amended and Restated Shareholders’ Agreement, dated June 23, 2011, as amended. The fair value of the warrants was recorded as a discount on the subordinated notes payable. During June 2011, the shareholder and holder of the warrants sold 117,050 of those warrants to the Company for $7.5 million. In April 2014, all 43,358 outstanding warrants were exercised. In connection with the exercise of the warrants, the Company issued 43,358 shares of common stock and received proceeds of $43,358.