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 2013 Non-Employee Director Plan was amended effective November 3, 2016 to increase the number of shares of the Corporation's common stock available for issuance under the plan from 2,962 (after taking into account the 135-for-1 reverse stock split of the Corporation's common stock effected on July 27, 2016) to 400,000 shares. The awards may take the form of unrestricted or restricted shares of the Corporation’s unissued common stock or options to purchase shares of the Corporation’s unissued common stock. Of the 400,000 shares of common stock reserved for issuance under the 2013 Non-Employee Director Plan, 383,787 shares remain available for issuance as of December 31, 2016.

During 2016, 15,016 restricted shares were issued under the plan which vested immediately upon issuance, resulting in share-based compensation expense of $129 for the year ended December 31, 2016. The restricted shares granted and vested had a weighted-average grant date fair value of $8.54. During 2015, 620 restricted shares were issued under the plan which vested immediately upon issuance, resulting in share-based compensation expense of $200 for the year ended December 31, 2015. The restricted shares granted and vested had a weighted-average grant date fair value of $322.65. Share-based compensation expense for the 2013 Non-Employee Director Plan is reported under selling, general and administrative expense.

2013 Long-Term Incentive Compensation Plan

On June 21, 2013, the stockholders approved the Corporation’s 2013 Long-Term Incentive Compensation Plan ("2013 Plan") for the benefit of certain employees performing services for the Corporation. The 2013 Plan reserved up to 5,870 unissued shares of Corporation common stock for issuance in accordance with the 2013 Plan’s terms including a maximum of up to 2,935 shares that could have been issued pursuant to awards of restricted stock. On June 29, 2015, the initial awards were granted under the 2013 Plan of 1,790 stock options with an exercise price of $556.20 and 2,416 restricted stock units. The awards originally had vesting terms of one-third on each of ninety days, one year, and two years after the date of grant. As an element of the Restructuring discussed in Note 2, the Corporation terminated the 2013 Plan and all outstanding awards thereunder immediately vested and converted into shares of the Corporation's Common Stock. As a result of the accelerated vesting, the Corporation charged the remaining unrecognized compensation expense on existing awards to the results of operations during the year ended December 31, 2016.

2016 Long Term Incentive Plan

On August 3, 2016, the Board of Directors approved and adopted the 2016 Long Term Incentive Plan (“2016 Plan”), for the purpose of promoting the long-term success of the Corporation and the creation of value for its stockholders. On August 4, 2016, the Corporation received written consents from the holders of a majority of the shares of its common stock outstanding approving and adopting the 2016 Plan. The Company filed a Schedule 14C with the Securities and Exchange Commission (the “Information Statement”) on August 15, 2016 and the 2016 Plan became effective on September 4, 2016. The 2016 Plan supersedes any prior management or employee stock compensation plan of the Corporation in effect on the Closing Date.

The 2016 Plan provides for awards of stock options, stock appreciation rights, restricted shares, stock units and performance cash awards. The 2016 Plan reserves 1,038,258 shares of common stock for distribution to covered employees, including a maximum of 519,129 shares that were reserved for issuance pursuant to awards of restricted stock or stock units. On September 26, 2016, 311,477 stock units and stock options for 311,477 shares of Corporation common stock at an exercise price of $10.19 were granted under the 2016 Plan (the "MIP Awards").

The MIP Awards vest: (a) one-third on the earliest to occur of (1) the date on which the Corporation receives Tax Credit certificates assigned to the Corporation by Alaska Seismic Ventures, LLC and issued by the Tax Division of the State of Alaska that, together with all such certificates received by the Corporation after the Closing Date, have an aggregate face amount of $25 million or more, or (2) the first anniversary of the Closing Date; and (b) one-third each on the second and third anniversaries of the Closing Date. The MIP Awards expire upon the earlier of termination of the grantee’s employment or ten years after the grant date.

Share-Based Compensation Expense

Share-based compensation expense for stock option, restricted stock and restricted stock unit awards was as follows:



	Years Ended December 31,
	2016			2015
Cost of services	$	—		$	—
Selling, general and administrative expenses	1,383			1,061
Total share-based compensation expense	1,383			1,061
Income tax benefit	(484		)	(371		)
Increase in net loss	$	899		$	690

Increase in net loss per share:
Basic	$	0.22		$	5.91
Diluted	$	0.22		$	5.91

Stock Options

A summary of stock option activity for the year ended December 31, 2016 was as follows:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2015	1,790		$	556.20			9.5	$	—
Granted	311,477		$	10.19	$	3.89
Exercised	(85	)	$	556.20				(45		)
Forfeited	(1,705	)	$	556.20
Expired	—		$	—
Outstanding at December 31, 2016	311,477		$	10.19			9.7	$	—
Exercisable at December 31, 2016	—		$	—			0.0	$	—

The total grant date fair value of stock options awarded during the years ended December 31, 2016 and 2015 was $1,212 and $359, respectively. The total fair value of stock options vested during the years ended December 31, 2016 and 2015 was $3 and $120, respectively.

The Corporation computes the fair value of each stock option on the date of grant using a Black-Scholes option pricing model. The following table summarizes the weighted average assumptions used in the Black-Scholes pricing model for the years ended December 31, 2016 and 2015: :



	2016	2015
Expected volatility	60.7%	52.3%
Expected lives (in years)	5.9	5.5
Risk-free interest rate	1.2%	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 December 31, 2016, there was approximately $987 of unrecognized compensation expense for unvested stock option awards with a weighted average vesting period of 1.57 years.

Restricted Stock Units

A summary of restricted stock units activity for the year ended December 31, 2016 was as follows:



	Number of Shares		Weighted Average Grant Date Fair Value
Nonvested at December 31, 2015	1,610		$	459.00
Granted	311,477		$	7.85
Vested	(1,542	)	$	459.00
Forfeited	(68	)	$	459.00
Nonvested at December 31, 2016	311,477		$	7.85

The total grant date fair value of stock units awarded during the years ended December 31, 2016 and 2015 was $2,445 and $1,109, respectively. The total fair value of stock units vested during the years ended December 31, 2016 and 2015 was $37 and $310. At December 31, 2016, there was approximately $1,992 of unrecognized compensation expense, net of estimated forfeitures, for unvested restricted stock unit awards with a weighted average vesting period of 1.57 years.