13. Share-based payments

Effective on January 1, 2008, the board of directors and shareholders of the SearchMedia International approved and adopted the 2008 Share Inventive Plan (the “Share Incentive Plan”) which provides for the granting of up to 359,299 share options and restricted share units to the eligible employees to subscribe for common shares of SearchMedia International. The granted share options and restricted share units were subsequently converted into SearchMedia Holdings’ share options and restricted share units on October 30, 2009 pursuant to the Share Exchange Agreements.

In August 2010, subject to shareholder approval which was received in September of 2011, the Board approved an increase of the number of authorized shares to be awarded under the Share Incentive Plan from 359,299 to 600,000 shares which may be granted to designated employees, directors and consultants of the Company. On December 14, 2012, shareholders approved an increase in the 2008 share incentive plan to 900,000 shares. On December 17, 2013, shareholders amended the Company’s Amended and Restated 2008 Share Incentive Plan by increasing the number of authorized common shares available for grant under the 2008 Plan from 900,000 common shares to 1,200,000 common shares.

All shares, including share options and restricted share units, specified in this note 13, share-based payments, for all periods reflect Tiger Media’s 1-for-5 reverse stock split, which was effective on March 19, 2015.

Share based compensation to employees

(a) Share options

Details of share options activity during the years ended December 31, 2014 and 2013 were as follows:


	Number of options			Weighted average exercise price per share		Weighted average remaining contractual term		Aggregate fair value			Aggregate intrinsic value
Balance as of December 31, 2012		327,105		$	11.80		8.6 years	$	1,735		$	—
Granted		67,000			7.45				308
Forfeited		(85,000	)		9.40				(347	)


Balance as of December 31, 2013		309,105			11.50		8.1 years		1,696			—
Forfeited		(32,105	)		19.55				(218	)

Balance as of December 31, 2014		277,000			10.60		7.2 years		1,478			—

Options exercisable at December 31, 2014		213,667		$	11.71		7.0 years	$	1,200

The Company determined the estimated grant-date fair value of share options based on the Binomial Tree option-pricing model using the following assumptions:


	2013*
Risk-free rate of return		2.63	%
Weighted average expected option life		10 years
Expected volatility rate		95.26	%
Dividend yield		0	%

*	No options were granted for the year ended December 31, 2014.

The expected volatility in the table above was based on the actual volatility of the Company’s common shares.

The Company has accounted for these options issued to employees in accordance with ASC Topic 718, “Compensation—Stock Compensation” , by measuring compensation cost based on the grant-date fair value and recognizing the cost over the period during which an employee is required to provide service in exchange for the award.

On March 4, 2013, 15,000 options, at exercise price at $5.10, to purchase the Company’s common shares of the Company were granted to a senior executive of the Company with the options vesting annually over a three-year period. The fair value of these options at grant date was $48. The options have been forfeited on the senior executive’s resignation on November 10, 2013.

On November 11, 2013, 35,000 options, at exercise price at $8.10, to purchase the Company’s common shares of the Company were granted to senior executives of the Company with the options vesting annually over a three-year period. The fair value of these options at grant date was $182.

On November 11, 2013, 17,000 options, at exercise price at $8.10, to purchase the Company’s common shares of the Company were granted to senior executives of the Company with the options vesting over a one-year period. The fair value of these options at grant date was $78.

25,000 options, at exercise price at $5.25, to purchase the Company’s common shares of the Company were granted to a senior executive of the Company with the options vesting annually over a three-year period on November 15, 2012, were forfeited on the senior executive’s resignation on March 8, 2013.

45,000 options, at exercise price at $13.10, to purchase the Company’s common shares of the Company, which was granted to a senior executive of the Company with the options vesting over a three-year period on January 4, 2010, were forfeited in 2013 because they were not exercised during the applicable term.

20,000 options, at exercise price at $8.25, to purchase the Company’s common shares of the Company, which was granted to a senior executive of the Company with the option vesting over a three-year period on March 27, 2012, were forfeited on March 17, 2014 because they were not exercised during the applicable term.

8,105 options, at exercise price at $39.40 with the vesting annually over a four-year period on January 2008, and 4,000 options, at exercise price at $35.70 with the vesting annually over a three-year period on January 2010, to purchase the Company’s common shares of the Company, which were both granted to a senior executive of the Company, were forfeited on the senior executive’s resignation on March 31, 2014.

The amounts of compensation cost recognized for these share options were $267 and $271 for the years ended December 31, 2014 and 2013, respectively, which were allocated to general and administrative expenses. As of December 31, 2014 and 2013, unrecognized share-based compensation cost in respect of granted share options amounted to $81 and $348, respectively.

(b) Restricted share units

Details of restricted share unit activity during the years ended December 31, 2014 and 2013 were as follows:


	Number of restricted share unit Granted			Grant-date fair value		Weighted average remaining contractual term
Balance as of December 31, 2012		29,053		$	200		9.45 years
Granted		195,656			1,502
Exercised		(23,656	)
Forfeited		(40,000	)


Balance as of December 31, 2013		161,053			1,340		9.76 years
Granted		73,000			239
Exercised		(171,053	)
Forfeited		(2,000	)


Balance as of December 31, 2014		61,000			190		9.58 years


Units vested as of December 31, 2014		—

On March 4, 2013, 15,000 restricted share units were granted to a senior executive of the Company with the units vesting annually over a three-year period. The fair value of these units at grant date was $77. The restricted share units have been forfeited on the senior executive’s resignation on November 10, 2013.

On May 20, 2013, 7,356 restricted share units were granted to an employee of the Company with the units vesting. The fair value of these units at grant date was $38.

On November 11, 2013, 157,000 restricted share units were granted to our directors, senior executive, employee and consultant of the Company with the units vesting on January 2, 2014. The fair value of these units at grant date was $1,272.

On December 17, 2013, 6,300 restricted share units were granted to our directors with the units vesting. The fair value of these units at grant date was $40.

On December 31, 2013, 10,000 restricted share units were granted to a consultant of the Company with the units vesting. The fair value of these units at grant date was $75.

25,000 restricted share units, which were granted to a senior executive of the Company with the units vesting annually over a three-year period on November 15, 2012, were forfeited on the senior executive’s resignation on March 8, 2013.

On April 16, 2014, 3,000 restricted share units were granted to employees of the Company with the units vesting annually over a two-year period. The fair value of these units at grant date was $13. 2,000 restricted share units have been forfeited on the employee’s resignation in October 2014.

On August 1, 2014, 60,000 restricted share units were granted to a senior executive of the Company with the units vesting annually over a four-year period. The fair value of these units at grant date was $186.

On December 19, 2014, 10,000 restricted share units were granted to our directors with the units vesting immediately. The fair value of these units at grant date was $40.

The Group recognized compensation cost (included in general and administrative expenses in the consolidated statements of operations) for these restricted share units of $169 and $1,377 for the years ended December 31, 2014 and 2013, respectively. The fair value of the restricted share units was estimated using the market value of the common shares on the date of grant, which was equivalent to the closing price of our common share on the grant date.

As of December 31, 2014 and 2013, unrecognized share-based compensation cost in respect of granted restricted share units amounted to $147 and $48, respectively.