STOCKHOLDER'S EQUITY

12 Months Ended

Dec. 31, 2015

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

NOTE D—STOCKHOLDERS' EQUITY

        During 2014, as part of the acquisition of our Marcellus Assets, the Company issued approximately 6.7 million shares of our common stock valued at $41.4 million.

        During 2014, the Company issued 649,002 shares of common stock to individuals who exercised options at exercise prices ranging from $0.51 to $3.09 per share.

        During 2015, the Company issued 4 million shares of common stock valued at $2.0 million as a deal fee in conjunction with the Second Lien Credit Facility.

        The preferred stock has an 8% cumulative dividend, payable quarterly. Preferred dividends of approximately $113 thousand ($10.56 per share) and $103 thousand ($9.60 per share) were accrued at December 31, 2015 and 2014, respectively. The holders of the preferred stock are not entitled to vote except as defined by the agreement or as provided by applicable law. The preferred stock may be voluntarily converted into common stock at the election of the holder based on the table below. The conversion rate is subject to adjustment as defined by the agreement.

	Preferred to common
Period
Prior to June 30, 2005	1 to 1
July 1, 2005 through June 30, 2006	1 to .75
July 1, 2006 through redemption	1 to .50

        Additionally, commencing December 31, 2012, holders of the preferred stock may elect to require the Company to redeem their preferred stock at a redemption price equal to the liquidation value of $12 per share, plus accrued but unpaid dividends, if any ("Redemption Price"). Upon the receipt of a redemption election, the Company, at its option, shall either: (1) pay the holder cash in the amount equal to the Redemption Price or (2) issue to holder shares of common stock as defined by the agreement. The Company is accreting the carrying value of its preferred stock to its redemption price using the effective interest method with accretion recorded to additional paid in capital. The accretion of preferred stock results in a reduction of earnings per share applicable to common stockholders. There are 10,703 preferred shares outstanding that the Company may be required to redeem at the aggregate Redemption Price of $0.1 million after December 31, 2015. As noted above, the Company could, at its option, settle the redemption requests in shares of common stock.

Securities Authorized for Issuance Under Compensation Plans

        The table below includes information about our equity compensation plans as of December 31, 2015:

	Number of Shares Authorized for Issuance under plan		Number of securities to be issued upon exercise of outstanding options and restricted stock		Weighted-average exercise price of outstanding options and restricted stock		Number of securities remaining available for future issuance under equity compensation plans
2010 Stock Incentive Plan		9,950,000		4,871,057	$	1.85		2,828,050

        During 2015, the Board of Directors approved and the Company issued 2,730,400 stock options to officers and employees of the Company exercisable at prices ranging from $0.36 to $1.23 per share and 1,669,655 shares of restricted stock. During 2014, the Board of Directors approved and the Company issued 1,372,920 stock options to officers and employees of the Company exercisable at prices ranging from $3.01 to $6.66 per share and 525,296 shares of restricted stock. The options are exercisable at a price not less than the fair market value of the stock at the date of grant, have an exercisable period of five years and generally vest over three years.

        A summary of the status of the Company's options issued to employees as of December 31, 2015 and 2014 and changes during the years ended on those dates is presented below:

	Incentive options			Weighted Average Exercise Price
Options outstanding—December 31, 2013		1,490,574		$	2.65
Issued		1,372,920		$	5.18
Exercised		(649,002	)	$	2.27
Expired		—			—
Forfeited		(227,333	)	$	3.98
Options outstanding—December 31, 2014		1,987,159		$	4.37
Issued		2,730,400		$	0.88
Exercised		—			—
Expired		(89,100	)	$	2.61
Forfeited		(1,034,870	)	$	2.64
Options outstanding—December 31, 2015		3,593,589		$	2.26

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Term (in years)
Outstanding at December 31, 2015		3,593,589	$	2.26		3.83
Exercisable at December 31, 2015		738,765	$	4.10		2.62

        The total intrinsic value of options exercised during the year ended December 31, 2015 and 2014 was $-0- and $1.8 million.

        The total intrinsic value of options outstanding at December 31, 2015 was $-0-.

        As of December 31, 2015, there was $2.2 million of total unrecognized compensation cost related to non-vested stock options granted under the Plans. This cost is expected to be recognized over a weighted average period of 1.7 years.

        Cash received from option exercises under all stock-based payment arrangements for the years ended December 31, 2015 and 2014 was $-0- and $1.5 million. We issue new shares of common stock to settle option exercises.

        A summary of the status of the Company's restricted stock issued to employees as of December 31, 2015 and 2014 and changes during the years ended on those dates is presented below:

	Shares			Weighted Average Fair Value
Outstanding at December 31, 2013		1,898,133		$	1.97
Granted		525,296			3.00
Vested		(908,750	)		2.39
Forfeited		(825,309	)		1.41
Outstanding at December 31, 2014		689,370		$	2.87
Granted		1,669,655			0.56
Vested		(697,630	)		1.79
Forfeited		(383,927	)		2.06
Outstanding at December 31, 2015		1,277,468		$	0.69

        Restricted stock awards for executive officers and employees generally vest ratably over three years. Fair value of our restricted shares is based on our closing stock price on the date of grant. As of December 31, 2015, total unrecognized stock-based compensation expense related to non-vested restricted shares was $0.6 million which is expected to be recognized over a weighted average period of approximately 1.4 years.