11. Stock-Based Compensation Plans

Total compensation expense recorded during the years ended December 31, 2015, 2014 and 2013 for share-based payment awards was $0.4 million, $0.2 million and $0.2 million, respectively. At December 31, 2015, total unrecognized estimated compensation expense related to non-vested stock options granted prior to that date was approximately $0.5 million, which is expected to be recognized over a weighted-average period of 2.12 years. No tax benefit was realized due to a continued pattern of operating losses. We have a policy of issuing new shares to satisfy share option exercises. No options were exercised during the years ended December 31, 2015 and 2014.

During the year ended December 31, 2015, the Company granted 1,785,000 options which included: 40,000 options to Michael Garone, Chief Financial Officer (valued on the grant date of January 14, 2015 at $0.34 using the Black Scholes pricing model); 175,000 options to Timothy Rothwell, Chairman of the Board, 75,000 options to each of the Company’s outside directors, 300,000 options to Alan L. Rubino, President and Chief Executive Officer, 150,000 options to Carl Sailer, Vice President, Sales and Marketing, and an additional 40,000 options to Michael Garone, Chief Financial Officer (valued on the grant date of March 3, 2015 at $0.55 using the Black Scholes pricing model); 250,000 options to non-executive employees and consultants (valued on the grant date of March 6, 2015 at $0.59 using the Black Scholes pricing model); an additional 40,000 options to each of the Company’s outside directors (valued on the grant date of May 20, 2015, at $0.50); an additional 175,000 options to Timothy Rothwell, Chairman of the Board, (valued on the grant date of September 14, 2015 at $0.60 using the Black Scholes pricing model); and an additional 40,000 options to Carl Sailer, Vice President, Sales and Marketing, (valued on the grant date of October 15, 2015 at $0.59 using the Black Scholes pricing model).

Using the Black-Scholes model, we have estimated our stock price volatility using the historical volatility in the market price of our common stock for the expected term of the option. The risk-free interest rate is based on the yield curve of U.S. Treasury STRIP securities for the expected term of the option. We have never paid cash dividends and do not intend to pay cash dividends in the foreseeable future. Accordingly, we assumed a 0% dividend yield. The forfeiture rate is estimated using historical option cancellation information, adjusted for anticipated changes in expected exercise and employment termination behavior. Forfeiture rates and the expected term of options are estimated separately for groups of employees that have similar historical exercise behavior. The ranges presented below are the result of certain groups of employees displaying different behavior.

The following weighted-average assumptions were used for grants made under the stock option plans for the years ended December 31, 2015, 2014 and 2013:


	2015
	Directors			Executives			Employees
Expected volatility		147.57-148.95	%		145.87-148.05	%		148.06	%
Expected term		6.8 years			6.8 years			6.8 years
Risk-free interest rate		1.83-1.93	%		1.58-1.90	%		1.99	%
Dividend yield		0	%		0	%		0	%
Annual forfeiture rate		14.5	%		14.5	%		14.5	%


	2014
	Directors			Executives			Employees
Expected volatility		143.09-145.11	%		142.69	%		145.03	%
Expected term		6.8 years			6.8 years			6.8 years
Risk-free interest rate		1.97-2.20	%		2.22	%		1.75	%
Dividend yield		0	%		0	%		0	%
Annual forfeiture rate		14.5	%		14.5	%		14.5	%


	2013
	Directors			Executives			Employees
Expected volatility		138.29-141.54	%		134.9	%		134.9-141.98	%
Expected term		6.8 years			6.8 years			6.8 years
Risk-free interest rate		1.45-2.24	%		1.21	%		1.21-2.03	%
Dividend yield		0	%		0	%		0	%
Annual forfeiture rate		14.5	%		14.5	%		14.5	%

Stock Option Plans. On April 20, 2007, the stockholders approved the 2007 Stock Award and Incentive Plan (the “2007 Plan”). The 2007 Plan provides for grants of options, stock appreciation rights, restricted stock, deferred stock, bonus stock and awards in lieu of obligations, dividend equivalents, other stock based awards and performance awards to executive officers and other employees of the Company, and non-employee directors, consultants and others who provide substantial service to us. The 2007 Plan provides for the issuance of 9,253,876 shares as follows: 7,500,000 new shares, 1,352,806 shares remaining and transferred from the Company’s 2000 Stock Option Plan (the “2000 Plan”) (which was then replaced by the 2007 Plan) and 401,070 shares remaining and transferred from the Company’s Stock Option Plan for Outside Directors (the “Directors Stock Plan”). In addition, shares cancelled, expired, forfeited, settled in cash, settled by delivery of fewer shares than the number underlying the award, or otherwise terminated under the 2000 Plan will become available for issuance under the 2007 Plan, once registered. As of December 31, 2015 2,757,266 shares remain available for issuance under the 2007 Plan. Generally, the options vest at the rate of 20% per year and expire within a five-to-ten-year period, as determined by the compensation committee of the Board of Directors and as defined by the Plans.

The Company also has grants outstanding under its expired and terminated 2000 Stock Option Plan (the “2000 Plan”). Under our 2000 Plan a maximum of 1,945,236 shares of our common stock were available for issuance. The 2000 Plan was available to employees, directors and consultants. The 2000 Plan provides for the grant of either ISOs, as defined by the Internal Revenue Code, or non-qualified stock options, which do not qualify as ISOs. Generally, the options vest at the rate of 20% per year and expire within a five- to ten-year period, as determined by the compensation committee of the Board of Directors and as defined by the Plans. As of December 31, 2015, 55,600 options remained outstanding under the 2000 Plan.

Transactions involving stock options awarded under the Plans described above during the years ended December 31, 2015, 2014 and 2013 are summarized as follows:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
								(In thousands)
Outstanding at December 31, 2012		4,150,410		$	1.07		8.4	$	1,076
Granted		505,000		$	0.20
Expired		(88,000	)	$	3.03
Forfeited		(226,660	)	$	1.61

Outstanding at December 31, 2013		4,340,750		$	0.90		7.8	$	56
Granted		495,000		$	0.31
Expired		(2,000	)	$	5.20
Forfeited		(13,000	)	$	0.67

Outstanding at December 31, 2014		4,820,750		$	0.84		7.1	$	223
Granted		1,785,000		$	0.57
Expired		(58,500	)	$	4.81

Outstanding at December 31, 2015		6,547,250		$	0.73		7.0	$	969

Vested and exercisable at December 31, 2015		4,197,244		$	0.79		6.2	$	874

Vested and expected to vest at December 31, 2015		6,211,254		$	0.74		7.0	$	959

The weighted-average grant date fair value of options granted during the years ended December 31, 2015, 2014 and 2013 and was $0.54, $0.29 and $0.19, respectively.

Outside Directors’ Plan. We previously issued options to outside directors who are neither officers nor employees of Emisphere nor holders of more than 5% of our common stock under the Directors Stock Plan. As amended, a maximum of 725,000 shares of our common stock were available for issuance under the Outside Directors’ Plan in the form of options and restricted stock. The Directors Stock Plan expired on January 29, 2007. Options and restricted stock are now granted to directors under the 2007 Plan discussed above.

Transactions involving stock options awarded under the Directors Stock Plan during the years ended December 31, 2015, 2014 and 2013 are summarized as follows:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
								(In thousands)
Outstanding at December 31, 2012		42,000		$	5.93		1.9
Expired		(21,000	)	$	2.89

Outstanding at December 31, 2013		21,000		$	8.97		2.7

Outstanding at December 31, 2014		21,000		$	8.97		1.4

Outstanding at December 31, 2015		21,000		$	8.97		0.4

Vested and Exercisable at December 31, 2015		21,000		$	8.97		0.4	$	—

Non-Plan Options. Our Board of Directors previously granted options (“Non-Plan Options”) to two consultants. The Board of Directors determines the number and terms of each grant (option exercise price, vesting, and expiration date).

Transactions involving awards of Non-Plan Options during the years ended December 31, 2015, 2014 and 2013 are summarized as follows:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term in Years		Aggregate Intrinsic Value
								(In thousands)
Outstanding at December 31, 2012		5,000		$	3.15		0.5
Expired		(5,000	)		3.15

Outstanding at December 31, 2013		—		$	—		—

Outstanding at December 31, 2014		—		$	—		—

Outstanding at December 31, 2015		—		$	—		—

Vested and Exercisable at December 31, 2015		—		$	—		—	$	—