STOCK OPTIONS, RESTRICTED SHARES AND WARRANTS

Orion has historically granted stock options and restricted stock under its 2003 Stock Option and 2004 Stock and Incentive Awards Plans (Plans). Under the terms of the Plans, Orion has reserved 13,500,000 shares for issuance to key employees, consultants and directors. The options generally vest and become exercisable ratably between one month and five years although longer and shorter vesting periods have been used in certain circumstances. Exercisability of the options granted to employees are generally contingent on the employees’ continued employment and non-vested options are subject to forfeiture if employment terminates for any reason. Options under the Plans are granted as non-qualified stock options (NQSO) and have a maximum life of 10 years. Certain non-employee directors have elected to receive stock awards in lieu of cash compensation pursuant to elections made under Orion’s non-employee director compensation program. The Plans also provide to certain employees accelerated vesting in the event of certain changes of control of Orion as well as under other special circumstances.

In May 2013, the Compensation Committee of the Board of Directors changed Orion's long-term equity incentive grant policy so that only restricted shares are issued to all employees under the Plans instead of stock options. The restricted shares are settled in Company stock when the restriction period ends. Compensation cost for restricted shares granted to employees is recognized ratably over the vesting term, which is typically between three to five years, although on occasion, the vesting term may be one year or less. Settlement of the shares is contingent on the employees’ continued employment and non-vested shares are subject to forfeiture if employment terminates for any reason. In fiscal 2016, an aggregate of 795,805 restricted shares were granted valued at a price per share between $1.34 and $2.62, which was the closing market price as of each grant date. In fiscal 2015, an aggregate of 410,496 restricted shares were granted valued at a price per share between $4.16 and $7.23, which was the closing market price as of each grant date. In fiscal 2014, an aggregate of 526,663 restricted shares were granted valued at a price per share between $2.41 and $6.97, which was the closing market price as of each grant date.

In fiscal 2016, Orion granted 35,290 shares from the 2004 Stock and Incentive Awards Plan to certain non-employee directors who elected to receive stock awards in lieu of cash compensation. The shares were valued ranging from $1.20 to $2.62 per share, the closing market price as of the issuance dates. Additionally, during fiscal 2016, Orion issued 2,500 shares to a consultant as part of a consulting compensation agreement. The shares were valued at $2.00 per share, the closing market price as of the issuance date. In fiscal 2015, Orion granted 27,931 shares from the 2004 Stock and Incentive Awards Plan to certain non-employee directors who elected to receive stock awards in lieu of cash compensation. The shares were valued ranging from $4.20 to $5.23 per share, the closing market price as of the issuance dates. In fiscal 2014, Orion granted 33,641 shares from the 2004 Stock and Incentive Awards Plan to certain non-employee directors who elected to receive stock awards in lieu of cash compensation. The shares were valued ranging from $2.41 to $5.73 per share, the closing market price as of the issuance dates.

In fiscal 2014, Orion recorded $200,000 of stock-based compensation related to the deferred consideration for employee Harris Shareholders resulting from the Harris acquisition.

The following amounts of stock-based compensation were recorded (dollars in thousands):



	Fiscal Year Ended March 31,
	2016		2015		2014
Cost of product revenue	$	36	$	50	$	70
General and administrative	1,148		1,056		1,025
Sales and marketing	235		360		485
Research and development	43		33		13
	$	1,462	$	1,499	$	1,593

The number of shares available for grant under the plans were as follows:



Available at March 31, 2013	1,632,778
Granted stock options	(305,544	)
Granted shares	(33,641	)
Restricted Shares	(526,663	)
Forfeited restricted shares	69,375
Forfeited stock options	455,691
Available at March 31, 2014	1,291,996
Granted stock options	—
Granted shares	(27,931	)
Restricted Shares	(410,496	)
Forfeited restricted shares	74,957
Forfeited stock options	150,074
Available at March 31, 2015	1,078,600
Granted stock options	—
Granted shares	(64,960	)
Restricted shares	(795,805	)
Forfeited restricted shares	206,471
Forfeited stock options	363,380
Available at March 31, 2016	787,686

The following table summarizes information with respect to outstanding stock options:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Fair Value of Options Granted	Aggregate Intrinsic Value
Outstanding at March 31, 2013	3,312,523		$	3.42	1.23
Granted	305,544		$	1.98
Exercised	(446,059	)	$	2.25
Forfeited	(455,691	)	$	3.26
Outstanding at March 31, 2014	2,716,317		$	3.43	1.32
Granted	—		$	—
Exercised	(139,407	)	$	2.46
Forfeited	(150,074	)	$	3.13
Outstanding at March 31, 2015	2,426,836		$	3.50	—
Granted	—		$	—
Exercised	(46,410	)	$	2.09
Forfeited	(363,380	)	$	4.68
Outstanding at March 31, 2016	2,017,046		$	3.32	—	$	—
Exercisable at March 31, 2016	1,811,146					$	—

The aggregate intrinsic value represents the total pre-tax intrinsic value, which is calculated as the difference between the exercise price of the underlying stock options and the fair value of Orion’s closing common stock price of $1.39 as of March 31, 2016.

The following table summarizes the range of exercise prices on outstanding stock options at March 31, 2016:



	March 31, 2016
	Outstanding	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price	Vested	Weighted Average Exercise Price
$1.62 - 2.20	684,476	4.93	$1.98	558,776	$1.98
$2.41 - 2.75	373,144	6.24	2.45	360,744	2.44
$2.86 - 4.28	719,971	4.07	3.41	652,171	3.44
$4.49 - 4.76	25,400	2.40	4.64	25,400	4.64
$5.35 - 5.44	77,204	3.03	5.39	77,204	5.39
$9.00	27,000	1.87	9.00	27,000	9.00
$10.14 - 11.61	109,851	1.66	10.87	109,851	10.87
	2,017,046	4.54	$3.32	1,811,146	$3.43

During fiscal 2016, Orion granted restricted shares as follows (which are included in the above stock plan activity tables):



Balance at March 31, 2015	704,688
Shares issued	795,805
Shares vested	(240,633		)
Shares forfeited	(206,471		)
Shares outstanding at March 31, 2016	1,053,389
Per share price on grant date	$1.34-2.62
Compensation expense	$	1,306,191

As of March 31, 2016, the weighted average grant-date fair value of restricted shares granted was $2.06.

Unrecognized compensation cost related to non-vested common stock-based compensation as of March 31, 2016 is as follows (dollars in thousands):



Fiscal 2017	$	1,113
Fiscal 2018	771
Fiscal 2019	274
Fiscal 2020	72
Fiscal 2021	12
Thereafter	—
	$	2,242
Remaining weighted average expected term	2.6 years

Orion previously issued warrants in connection with various stock offerings and services rendered. The warrants granted the holder the option to purchase common stock at specified prices for a specified period of time. No warrants were issued in fiscal 2016, 2015 or 2014. During fiscal 2015, all warrants outstanding for a total of 38,980 shares were exercised at $2.25 per share, and as a result, none remain outstanding.

A summary of warrant activity is as follows:



	Number of Shares		Weighted Average Exercise Price
Outstanding at March 31, 2013	38,980		$	2.25
Issued	—		—
Exercised	—		$	—
Cancelled	—		$	—
Outstanding at March 31, 2014	38,980		$	2.25
Issued	—		—
Exercised	(38,980	)	2.25
Cancelled	—		—
Outstanding at March 31, 2015 and March 31,2016	—		$	—