STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

The Yuma Co. 2011 Stock Option Plan (the “Yuma Co. Plan”) was adopted on June 21, 2011.  On September 10, 2014, the shareholders of Pyramid adopted the 2014 Long-Term Incentive Plan (the “2014 Plan”).  Under these plans, the Board of Directors is authorized to grant stock options, stock awards (including restricted stock and restricted stock unit awards) and performance awards to officers, directors, employees and consultants.  At December 31, 2015, 4,307,672 shares of the 8,900,000 shares of Yuma common stock originally authorized under active share-based compensation plans remained available for future issuance.  The Company generally issues new shares to satisfy awards under employee share-based payment plans.  The number of shares available is reduced by awards granted.

Restricted Stock – The Company granted restricted stock awards (“RSAs”) under the Yuma Co. Plan and the 2014 Plan in 2013, 2014 and 2015.  These restricted stock awards granted to officers, directors and employees generally vest in one-third increments over a three-year period, and are contingent on the recipient’s continued employment.  Prior to vesting, all restricted stock recipients have the right to vote such stock and receive dividends thereon.  The non-vested shares are not transferable and are held by the Company’s transfer agent.

A summary of the status of the RSAs for employees and non-employee directors and changes for the year to date ended December 31, 2015 is presented below.

	Number of			Weighted average
	unvested			grant-date
	RSA shares			fair value
Unvested shares as of January 1, 2015		2,063,100		$3.40 per share
Granted on March 12, 2015		73,194		$1.38 per share
Granted on August 18, 2015		2,155,538		$0.61 per share
Granted on September 30, 2015		75,000		$0.48 per share
Granted on October 5, 2015		295,586		$0.50 per share
Vested on January 25, 2015		(65,638	)	$3.14 per share
Vested on April 1, 2015		(1,272,834	)	$3.16 per share
Vested on May 1, 2015		(6,232	)	$2.39 per share
Vested on May 20, 2015		(76,744	)	$3.96 per share
Vested on July 14, 2015		(29,789	)	$3.89 per share
Vested on October 15, 2015		(48,747	)	$2.74 per share
Vested on November 1, 2015		(6,232	)	$2.39 per share
Vested on November 30, 2015		(16,157	)	$3.88 per share
Vested on December 31, 2015		(106,280	)	$3.88 per share
Forfeited		(690,392	)	$1.72 per share
Unvested shares as of December 31, 2015		2,343,373		$0.98 per share

The weighted average grant-date fair value per RSA share granted was $3.87 for 2014 and $3.22 for 2013.

A summary of the status of the RSAs and changes for the year to date ended December 31, 2015 for former Yuma employees acting as consultants is presented below.

	Number of
	unvested			Weighted average
	RSA shares			fair value
Unvested shares as of January 1, 2015		-
Granted November 30, 2015		45,297		$0.19 per share
Granted December 15, 2015		173,224		$0.19 per share
Vested on December 31, 2015		(47,460	)	$0.19 per share
Unvested shares as of December 31, 2015		171,061		$0.19 per share

Stock compensation cost for consultants is adjusted at the end of each reporting period to reflect cost based on the closing stock price at the end of that reporting period.  That price was $0.19 at December 31, 2015.

At December 31, 2015, total unrecognized RSA compensation cost of $1,247,595 is expected to be recognized over a weighted average remaining service period of 1.4 years.

Stock Appreciation Rights – In 2015, the Company also issued Stock Appreciation Rights (“SARs”) for employees under the 2014 Plan, as follows:

				Weighted
	Number of			average
	unvested			grant-date
	SARs			fair value
Unvested shares as of January 1, 2015		-
Granted on August 18, 2015		2,159,855		$0.318 per share
Forfeited		(371,155	)	$0.318 per share
Unvested shares as of December 31, 2015		1,788,700		$0.318 per share

Weighted average assumptions used to estimate fair value were expected life of five years, 61.17% volatility, 1.60% risk-free rate, and zero annual dividends.

Below is a summary of the SARs and changes for the year to date ended December 31, 2015 for former Yuma employees acting as consultants.

	Number of		Weighted
	unvested		average
	SARs		fair value
Unvested shares as of January 1, 2015		-
Granted on November 30, 2015		19,080	$0.036 per share
Granted on December 15, 2015		104,639	$0.036 per share
Unvested shares as of December 31, 2015		123,719	$0.036 per share

Stock compensation cost for consultants is adjusted at the end of each reporting period to reflect the cost based on the closing stock price at the end of that reporting period.  That price was $0.19 at December 31, 2015 and was used to compute a new fair value of $0.036 per share.  Weighted average assumptions used to estimate fair value were expected option life of .91 years, 130% volatility, 0.65% risk-free interest rate, and zero expected dividend rate.

At December 31, 2015, total unrecognized SAR compensation cost of $418,039 is expected to be recognized over a weighted average remaining service period of 1.5 years.

The SARs in the tables above have a weighted average exercise price of $.605 and an aggregate intrinsic value of zero.  The Company intends to settle these SARs in equity, as opposed to cash.

Stock Options – Pyramid issued stock options as compensation to non-employee directors under the Pyramid Oil Company 2006 Equity Incentive Plan (the “Pyramid Plan”).  The options vested immediately, and are exercisable for a five-year period from the date of the grant.

The following is a summary of the Company’s stock option activity.

					Weighted-
			Weighted-		average
			average		remaining		Aggregate
			exercise		contractual		intrinsic
	Options		price		life (years)		value
Outstanding at December 31, 2014		105,000	$	5.17		2.65	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited		-		-		-		-
Outstanding at December 31, 2015		105,000	$	5.17		2.65	$	-
Vested at December 31, 2015		105,000	$	5.17		2.65	$	-
Exercisable at December 31, 2015		105,000	$	5.17		2.65	$	-

As of December 31, 2015, there were no unvested stock options or unrecognized stock option expenses.

The following table summarizes the information about stock options outstanding and exercisable at December 31, 2015.

		Options Outstanding						Options Exercisable
				Weighted-		Weighted				Weighted
				average		average				average
Exercise		Number of		remaining		exercise		Number of		exercise
price		shares		life (years)		price		shares		price
$	5.40		5,000		0.10	$	5.40		5,000	$	5.40
$	5.16		100,000		2.77	$	5.16		100,000	$	5.16
			105,000						105,000

Restricted Stock Units – On April 1, 2013, the Company granted 163 Restricted Stock Units (for Yuma Co. shares) or “RSUs” to employees. Based on the exchange ratio of the merger, the RSUs converted into 123,446 RSUs. Each RSU represents a contingent right to receive one share of the Company’s common stock upon vesting.  In order to vest, an employee must have continuous service with the Company from time of the grant through April 1, 2016, the vesting date.  These RSUs are expected to be settled in cash; consequently, the awards are liability-based and the booked valuation will change as the market value for common stock changes.  At December 31, 2015, the RSU’s were valued at the common stock closing price of the Company on that date.  Compensation expense is recognized over the three-year vesting period.

A summary of the status of the unvested RSUs and changes during the year ended December 31, 2015 is presented below.

				Weighted
	Number of			average
	unvested			grant-date
	RSUs			fair value
Unvested shares as of January 1, 2015		95,424		$2.72 per share
Forfeited		(15,146	)	$2.72 per share
Unvested shares as of December 31, 2015		80,278		$2.72 per share

On December 25, 2014, the Company entered into a Separation Agreement and General Release of Claims (“Separation Agreement”) with its former President and Chief Operating Officer which provided for, among other things, the forfeiture of 355,192 RSAs with various vesting dates and the issuance of an aggregate of 273,907 RSUs that vested December 31, 2014, with 254,973 to be issued on April 1, 2015 and 18,934 to be issued on May 20, 2015.  These RSUs were valued under the equity method, and valued as of December 25, 2014.