CJ 2017 Annual Report

below), by expiration, forfeiture, cancellation or otherwise without the issuance of the common shares. The 2015 LTIP was terminated as described in Note 2 - Chapter 11 Proceeding and Emergence, pursuant to the Restructuring Plan, the liquidation of C&J Energy Services Ltd. was completed under the laws of Bermuda, and all of the existing shares of the Predecessor's common equity were canceled as of the Effective Date. Also, on the Effective Date, the Successor issued the New Warrants to the holders of the canceled Predecessor common shares, provided that such class of holders voted to accept the Restructuring Plan. Stock Options The fair value of each option award granted under the 2015 LTIP, the 2012 LTIP and the Prior Plans was estimated on the date of grant using the Black-Scholes option-pricing model. Option awards were generally granted with an exercise price equal to the market price of the Company’s common shares on the grant date. Due to the Company’s lack of historical volume of option activity, the expected term of options granted was derived using the “plain vanilla” method. In addition, expected volatilities were based on comparable public company data, with consideration given to the Company’s limited historical data. The Company made estimates with respect to employee termination and forfeiture rates of the options within the valuation model. The risk-free rate was based on the approximate U.S. Treasury yield rate in effect at the time of grant. No options were granted during the year ended December 31, 2016. The following table presents the assumptions used in determining the fair value of option awards during the year ended December 31, 2015. No stock options were granted by the Company for the year ended December 31, 2016. Year Ended December 31, 2015 Expected volatility 52.3% Expected dividends None Exercise price $7.93 - $27.12 Expected term (in years) 0.3 - 4.3 Risk-free rate 0.03% - 1.3% The weighted average grant date fair value of options granted during the year ended December 31, 2015, was $4.74. A summary of the Company’s stock option activity through December 31, 2016 is presented below. Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value (in thousands) (in years) (in thousands) Outstanding at December 31, 2014 (Predecessor) 5,067 $ 11.70 5.40 $ 21,395 Granted 267 10.49 — — Exercised (154) 2.94 — — Forfeited (61) 19.03 — — Outstanding at December 31, 2015 (Predecessor) 5,119 $ 11.82 4.41 $ 2,874 Granted — — — — Exercised — — — — Forfeited (703) 3.19 — — Outstanding at December 31, 2016 (Predecessor) 4,416 $ 13.18 3.86 $ — The total intrinsic value of options exercised during the year ended December 31, 2015 was $0.6 million. Restricted Shares Historically, restricted shares were valued based on the closing price of the Company’s common shares on the NYSE on the date of grant. During the year ended December 31, 2016 there were no restricted shares granted to employees C&J ENERGY SERVICES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 104