14. Share-based payments

As of December 31, 2015, the Company maintains two share-based incentive plans. The 2008 Share Incentive Plan (the “2008 Plan”) was carried forward as a result of the reverse acquisition effective on March 21, 2015, with 136,068 shares of common share reserved for issuance as of March 21, 2015. On April 27, 2015, the Board of Directors approved the IDI, Inc. 2015 Stock Incentive Plan (the “2015 Plan”), which was subsequently approved during the annual shareholder meeting on June 2, 2015, covering the issuance of 2,500,000 shares of Common Stock in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units. The primary purpose of the 2015 Plan is to attract, retain, reward and motivate certain individuals by providing them with an opportunity to acquire or increase a proprietary interest in IDI and to incentivize them to expend maximum effort for the growth and success of the Company, so as to strengthen the mutuality of the interests between such individuals and the stockholders of the Company. On November 16, 2015, the Board of Directors and the Compensation Committee of the Board approved the increase of the number of shares of Common Stock authorized for issuance as awards under the Company’s 2015 Stock Incentive Plan, as amended (the “2015 Plan Amendment”), to 12,500,000, provided that the increase in the number of shares of Common Stock available under the 2015 Plan Amended will be subject to stockholder approval of such issuance at the Company’s next Annual Meeting of Stockholders in accordance with the rules of the NYSE MKT LLC (the “Stockholder Approval”).

As of December 31, 2015, there were 70,568 and 6,699,000 shares of common share reserved for issuance under the 2008 Plan and the 2015 Plan Amended, respectively. The 2015 Plan Amendment is subject to the Stockholder Approval.

Non-plan share-based payments

Outside of the 2008 Plan and 2015 Plan, as amended, Marlin Capital held RSUs representing the right to receive 2,000,000 shares of TBO Common Stock, which was assumed by the Company upon closing of the TBO Merger and the RSUs represent the right to receive 2,000,000 shares of Company Common Share. The RSUs vest annually beginning from October 13, 2015 only if certain performance goals of the Company are met. The shares underlying such RSUs will not be delivered until October 13, 2018, unless there is a change of control of the Company. 960,000 RSUs held by TBO employees, including the Company’s Co-Chief Executive Officer and President, were also assumed by the Company and represent the right to receive 960,000 shares of Company Common Share, with a vesting period ranging from 2 to 4 years. Refer to details in Note (13) above.

As of December 31, 2015, we believed it would be probable that the performance goals specified under the Marlin Capital agreement would be met in the future, and recognized the share-based compensation expenses by $1,512 for the year ended December 31, 2015.

Outside of the 2008 Plan and 2015 Plan, effective November 16, 2015, the Company entered into an employment agreement with Michael Brauser (the “Michael Brauser Employment Agreement”) relating to his service as Executive Chairman of the Board of Directors, pursuant to which, Michael Brauser will receive an annual base salary of $25,000 payable in accordance with the Company’s general payroll practices and 5.0 million RSUs representing the right to receive 5.0 million shares of Common Share, provided that the issuance of shares of Common Share underlying the RSUs is subject to Stockholder Approval. The RSUs vest ratably over a four year period; provided, however, that no portion of the restricted stock units shall vest unless and until the Company has, for any fiscal year in which the restricted stock units are outstanding, gross revenue determined in accordance with the Company’s audited financial statements in excess of $100.0 million for such fiscal year and positive earnings before income tax, interests, depreciation and amortization (“EBITDA”) (as determined based on the Company’s audited financial statements) for such fiscal year, after subtracting all charges for equity compensation paid to executives or other service providers to the Company (collectively, the “Vesting Conditions”). Such RSUs vest in full upon a Company change in control, termination of Michael Brauser without cause, termination by Michael Brauser for good reason, or Michael Brauser’s death or disability. The Company concluded that it would be probable that the Vesting Conditions would be met.

Outside of the 2008 Plan and 2015 Plan, on December 8, 2015, at the time of Phillip Frost’s joining the Board of Directors of the Company as Executive Vice Chairman, Frost Gamma received a grant of 3,000,000 RSUs, provided that the issuance of shares of Common Share underlying such RSUs is subject to the Stockholder Approval. These grants were fully vested on December 8, 2015.

The Company determined the Board of Directors approval date to be the grant date and amortize the share-based compensation expenses beginning from the grant date.

Share options

Details of share options activity during the years ended December 31, 2015 and 2014 were as follows:


	Number of options			Weighted average exercise price per share		Weighted average remaining contractual term		Aggregate intrinsic value ⁽¹⁾
Balance as of January 1, 2015		—		$	—		—	$	—
Additions as a result of the reverse acquisition		407,000		$	9.21
Granted		85,000		$	10.39
Forfeited		(30,000	)	$	7.85

Balance as of December 31, 2015		462,000		$	9.52		5.3 years	$	—

Options exercisable as of December 31, 2015		365,334		$	9.35		4.6 years

⁽¹⁾	The aggregate intrinsic value amounts in the table above represent the difference between the closing price of IDI’s common share on December 31, 2015 of $7.34 and the exercise price, multiplied by the number of stock options as of the same date.

The unvested balance of options were shown below for the year ended December 31, 2015:


	Number of options			Weighted average exercise price per share		Weighted average remaining contractual term
Unvested as of January 1, 2015		—		$	—		—
Additions as a result of the reverse acquisition		63,334		$	6.82
Granted		85,000		$	10.39
Vested		(11,667	)	$	8.10
Forfeited		(10,000	)	$	7.85

Unvested as of December 31, 2015		126,667		$	9.02		8.1 years

Detail information for the share options granted or added during the year ended December 31, 2015 was shown below:

•

On March 21, 2015, as a result of the reverse acquisition, a total of outstanding options of Tiger Media, with a vesting period ranging from 1 to 3 years, were carried forward.

•

On June 23, 2015, a total of 25,000 share options were granted to an employee with a vesting period of 4 years;

•

On November 16, 2015, a total of 60,000 share options were granted to three employees with a vesting period of 4 years.

We estimate the fair value of each stock option on the date of grant using a Black-Scholes option-pricing model applying the following assumptions, and amortize the fair value to expense over the option’s vesting period using the straight-line attribution approach for employees and non-employee directors, for the year ended December 31, 2015:


Expected term (in years)			4
Risk-free interest rate			1.57% - 1.66%
Expected volatility			20.97% - 128.66%
Expected dividend yield			0.00%

The total fair value of all share options granted during the year ended December 31, 2015 was $624.

Compensation expense recognized from employee stock options for the years ended December 31, 2015 and 2014 was $28 and $0, respectively, which was recognized in general and administrative expenses and discontinued operations in the consolidated statements of operations. As of December 31, 2015, unrecognized share-based compensation cost in respect of granted share options amounted to $601.

Restricted stock units

Details of restricted stock unit activity during the years ended December 31, 2015 and 2014 were as follows:


	Number of units			Weighted average grant-date fair value
Unvested as of September 22, 2014 (date of inception)		—		$	—
Granted		2,960,000			2.00

Unvested as of December 31, 2014		2,960,000			2.00
Additions as a result of the reverse acquisition ⁽¹⁾		416,800			4.81
Granted ⁽²⁾		13,890,500			9.16
Vested and delivered		(382,300	)		5.55
Vested not delivered		(3,085,000	)		8.36
Forfeited		(79,000	)		5.78

Unvested as of December 31, 2015		13,721,000		$	7.35

⁽¹⁾	The 416,800 RSUs were as a result of the reverse acquisition, which were granted to certain directors and employees prior to the TBO Merger, with a verting period ranging from 6 months to 4 years.

⁽²⁾

Among the total grants in 2015, 12,312,000 shares, with weighted average grant-date fair value of $9.48, are subject to the Stockholder Approval. Among the 12,312,000 shares, 3,000,000 shares were granted to Frost Gamma, and were vested fully on the grant date, and the remaining shares have a vesting period ranging from 3 to 4 years. For accounting purposes, the grant date was determined to be in 2015, as the Company concluded the Stockholder Approval was perfunctory.

The Company recognized compensation cost (included in sales and marketing expenses, general and administrative expenses, and discontinued operations in the consolidated statements of operations, and intangible assets in the consolidated balance sheets) for these restricted stock units of $34,513 and $23 for the years ended December 31, 2015 and 2014, respectively. The fair value of the restricted stock units was estimated using the market value of the common shares on the date of grant, which was equivalent to the closing price of one share of common share on the grant date.

As of December 31, 2015, unrecognized share-based compensation cost in respect of granted restricted stock units amounted to $100,864 that are expected to be recognized over a weighted average period of 1.7 years.

The share-based compensation expenses for the share options and RSUs were allocated to the following accounts in the consolidated financial statement for the years ended December 31, 2015 and 2014:


	Year Ended December 31,
(In thousands)	2015		2014
Sales and marketing expenses	$	310	$	—
General and administrative expenses		33,404		23
Discontinued operations		456		—
Capitalized in intangible assets		363		—

Total	$	34,533	$	23