SHARE-BASED COMPENSATION

Non-Employee Director Share Incentive Plan

Effective November 1, 2013, stockholders approved the Corporation’s non-employee director share incentive plan, which provides for discretionary grants of stock awards to the Corporation’s independent non-employee directors as determined by the Corporation’s board of directors. The awards may take the form of unrestricted or restricted shares of the Corporation’s common stock or options to purchase shares of the Corporation’s common stock. The Corporation has reserved 400,000 shares of common stock for issuance under the 2013 Non-Employee Director Plan, of which 321,980 shares remain for issuance as of September 30, 2015. No shares were issued under the plan during the nine months ended September 30, 2015.

2013 Long-Term Incentive Compensation Plan

On June 21, 2013, the stockholders approved the Corporation’s 2013 Long-Term Incentive Compensation Plan ("Plan") for the benefit of certain employees performing services for the Corporation. The Plan reserves up to 792,513 shares of Corporation common stock for issuance in accordance with the Plan’s terms including a maximum of up to 396,256 shares that may be issued pursuant to awards of restricted stock. On June 29, 2015, the initial awards were granted under the Plan of 241,642 stock options with an exercise price of $4.12 and 326,117 restricted stock units. The awards vest one-third on each of ninety days, one year, and two years after the date of grant. At September 30, 2015, 224,754 shares of Corporation common stock are available for future awards under the Plan, of which a maximum of 70,139 shares of restricted stock may be awarded.

The Corporation records the grant date fair value of share-based compensation arrangements as compensation cost using a straight-line method over the requisite service period for each separately vesting tranche of an award. The amount of share-based compensation cost recognized during a period is based on the value of the awards that are ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Corporation updates its forfeiture rate annually.

Share-based compensation expense for stock option and restricted stock unit awards recognized for the three and nine months ended September 30, 2015 and 2014 was as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Cost of services	$	—	$	—	$	—	$	—
Selling, general and administrative expenses	668		—		675		—
Total share-based compensation expense	668		—		675		—
Income tax benefit	234		—		236		—
Decrease in net income	$	434	$	—	$	439	$	—

Decrease in net income per share:
Basic	$	0.03	$	—	$	0.03	$	—
Diluted	$	0.03	$	—	$	0.03	$	—

Stock Options

A summary of stock option activity for the nine months ended September 30, 2015 was as follows:



	Number of Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2014	—	$	—	—	$	—
Granted	241,642	$	1.49	9.75
Exercised	—	$	—	—
Forfeited	—	$	—	—
Expired	—	$	—	—
Outstanding at September 30, 2015	241,642	$	1.49	9.75	$	—
Exercisable at September 30, 2015	80,548	$	1.49	9.75	$	—

The Corporation computed the fair value of each stock option on the date of grant, June 29, 2015, using the Black-Scholes option pricing model based on the following assumptions:



	2015
Expected volatility	52.3%
Expected lives (in years)	5.5
Risk-free interest rate	1.8%
Expected dividend yield	—%

The expected volatility is based on the historical volatility of comparable companies for a period commensurate with the expected lives assumption. The simplified method is used to estimate expected lives for options granted during the period for each vesting tranche. The risk-free interest rate is based on the yield on U.S. Treasury securities for a period commensurate with the expected lives assumption. The Corporation has not historically issued dividends and does not expect to do so in the future.

At September 30, 2015, there was approximately $194 of unrecognized compensation expense, net of estimated forfeitures, for unvested stock option awards with a weighted average vesting period of 1.75 years.

Restricted Stock Units

A summary of restricted stock units activity for the nine months ended September 30, 2015 was as follows:



	Number of Shares		Weighted Average Grant Date Fair Value
Nonvested at December 31, 2014	—		$	—
Granted	326,117		$	3.40
Vested	(108,703	)	$	3.40
Forfeited	—		$	—
Nonvested at September 30, 2015	217,414		$	3.40

At September 30, 2015, there was approximately $599 of unrecognized compensation expense, net of estimated forfeitures, for unvested restricted stock unit awards with a weighted average vesting period of 1.75 years.