10.STOCK-BASED COMPENSATION

The board of directors of the Company adopted an Employees’ Equity Incentive Plan (the “EEIP”) in April 1994. The EEIP expired in April 2004. All outstanding options from the EEIP have been issued and the Company no longer administers the plan. Stockholders of the Company approved a new equity incentive plan (as amended, the “2005 Plan”) at the 2005 annual meeting of stockholders. The 2005 Plan expired in June 2015. There are options issued under the 2005 Plan that remain outstanding. The 2005 Plan provided for the grant of awards to eligible individuals in the form of stock, restricted stock, stock options, performance units or other stock-based awards, all as defined in the 2005 Plan. The 2005 Plan provided for the issuance of up to 2,000,000 shares of common stock to eligible individuals through the various forms of permitted awards. The Company was not permitted to issue stock options at an exercise price lower than fair market value at the date of grant. All stock options were required to have an exercise period not to exceed ten years. Through December 31, 2015, the Company had granted, under the 2005 Plan, awards of incentive stock options and non-qualified stock options, all of which had exercise prices that were not less than the fair market value at the date of grant. Options granted have six-month, one-year, three-year or four-year vesting periods. Through December 31, 2015, the Company had issued all outstanding options at market value as of the date of the grant. Any committee as delegated by the board of directors has the power and discretion to, among other things, prescribe the terms and conditions for the exercise of, or modification of, any outstanding awards in the event of merger, acquisition or any other form of acquisition other than a reorganization of the Company under the United States Bankruptcy Code or liquidation of the Company. The 2005 Plan also allows limited transferability of any stock options to legal entities that are 100% owned or controlled by the optionee or to the optionee’s family trust.

Stock Options

Activity in the Company’s stock-based compensation plan for employee stock options was as follows:


	Option Shares		Weighted-Average Exercise Price	Weighted-Average Remaining Contractual Term	Options Exercisable		Weighted-Average Exercise Price
Outstanding at January 1, 2013	919,848	$	2.94	1.58	895,348	$	2.96
Granted	0		0.00
Exercised*	(849,210)		2.93
Cancelled or forfeited	0		0.00
Outstanding at December 31, 2013	70,638	$	3.03	5.40	56,638	$	3.21
Granted	1,365,000		5.05
Exercised**	(3,296)		0.91
Cancelled or forfeited	(2,500)		9.00
Outstanding at December 31, 2014	1,429,842	$	4.95	9.74	406,092	$	4.71
Granted	0		0.00
Exercised***	(38,206)		4.30
Cancelled or forfeited	0		0.00
Outstanding at December 31, 2015	1,391,636	$	4.97	8.77	709,136	$	4.90

*849,210 options were exercised and 249,647 shares were issued through net share settlement in 2013, and as a result there was no cash consideration or intrinsic value for the options.

**3,296 options were exercised for cash consideration of $3,000 in 2014. The intrinsic value of the options exercised was $19,000.

***6,956 options were exercised for cash considerations of $6,390 in 2015. The intrinsic value of the options exercised was $35,747. In addition, 31,250 options were exercised and 9,820 shares were issued through net share settlement in 2015, as a result there was no cash consideration or intrinsic value for the options.

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


Dollar amounts in thousands	Options Outstanding	Options Exercisable		Intrinsic Value of Options Outstanding		Intrinsic Value of Options Exercisable	Weighted-Average Life of Options Outstanding (1)	Weighted-Average Life of Options Exercisable (1)
Exercise Price:
$0.91	4,274	4,274	$	29	$	29	2.9	2.9
$0.93	8,612	8,612		59		59	2.9	2.9
$2.30	35,000	35,000		192		192	4.4	4.4
$5.05	1,333,750	651,250		3,641		1,778	9.0	9.0
$9.00	10,000	10,000		0		0	1.5	1.5
	1,391,636	709,136	$	3,921	$	2,058	8.8	8.5
(1) In years

The aggregate intrinsic value represents the difference between the Company’s closing stock price of $7.78 per share as of December 31, 2015 and the exercise price multiplied by the number of options outstanding or exercisable as of that date.

Activity in the Company’s stock-based compensation plan for non-vested employee stock options was as follows:


	Options		Weighted-Average Grant Date Fair Value
Nonvested at January 1, 2013	24,500	$	1.28
Granted	0		0.00
Vested	(10,500)		1.28
Forfeited	0		0.00
Nonvested at December 31, 2013	14,000	$	1.19
Granted	1,365,000		2.62
Vested	(355,250)		2.56
Forfeited	0		0.00
Nonvested at December 31, 2014	1,023,750	$	2.62
Granted	0		0.00
Vested	(341,250)		2.55
Forfeited	0		0.00
Nonvested at December 31, 2015	682,500	$	2.55

The total fair value for options vested was $0.9 million and less than $0.1 million for the years ended December 31, 2015 and 2014, respectively.

As of December 31, 2015, there were 113,750 options outstanding to independent directors of the Company with a weighted-average exercise price of $5.94. During 2015, independent directors exercised 16,250 options for cash consideration of $83,563 and an intrinsic value of $17,925.

The weighted-average fair value of options granted are estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:


Assumptions for 2013 Awards
Weighted-average risk-free interest rate	1.31%
Weighted-average expected life	5.4 yrs
Weighted-average expected volatility	63.6%
Weighted-average expect dividends	$0
Forfeiture rate	0%


Assumptions for 2014 Awards
Weighted-average risk-free interest rate	1.68%
Weighted-average expected life	4.4 yrs
Weighted-average expected volatility	62.3%
Weighted-average expect dividends	$0
Forfeiture rate	0%

No options were granted in 2015. The Company recorded stock-based compensation expense of $1.6 million, $1.0 million, and less than $0.1 million for the year ended December 31, 2015, 2014 and 2013, respectively. This amount is included in general and administrative expenses.

At December 31, 2015, there was $1.1 million of total unrecognized compensation expense related to unvested stock options. The cost is expected to be recognized over a weighted-average period of 1.6 years.