Quarterly report pursuant to sections 13 or 15(d)

Stock-Based Compensation

v2.4.0.8
Stock-Based Compensation
3 Months Ended
Mar. 31, 2014
Stock-Based Compensation
8. Stock-Based Compensation:

On September 18, 2003, the Company adopted a new stock option plan (the “2003 Plan”) that provides for the grant of incentive stock options and nonqualified stock options, and reserved 450,000 additional shares of the Company’s common stock for future issuance under the plan. The 2003 Plan was subsequently amended to increase the number of shares reserved for issuance thereunder to 670,000. During 2008, the 2003 Plan was further amended to increase the number of shares reserved for issuance to 810,000. During 2010, the 2003 Plan was further amended to increase the number of shares reserved for issuance thereunder to 1,160,000. The option price of incentive stock options must be at least 100% of market value at the date of the grant and incentive stock options have a maximum term of ten years. Options granted typically vest ratably over a three-year period or based on achievement of performance criteria. The Company has granted selected executives and other key employees share option awards, whose vesting is contingent upon meeting various departmental and company-wide performance goals including sales targets and net profit targets. The 2003 Plan does not contain any provisions which would trigger automatic vesting upon a change in control. As of March 31, 2014, 406,353 shares of common stock were vested and exercisable under the 2003 Plan, while 667 shares remained unvested. In 2009, the Company amended the 2003 Plan to extend the post-service termination exercise period of non-statutory stock options granted to directors for their service to the Company as directors from three months after the director’s termination date to the tenth anniversary of the date of grant. The Board has determined that no awards will be made pursuant to the 2003 Plan in the future.

The following table summarizes activity in the stock option plans:

 

     Shares
Available
for Future Grant
     Number of
Shares
Outstanding
Under Option
    Weighted
Average
Exercise
Price
 

Balance, January 1, 2013

     381,170         706,803      $ 4.27   

Options granted at market

     —          —         —    

Options exercised

     108,146         (108,146     2.45   

Options forfeited or expired

     191,637         (191,637     4.76   
  

 

 

    

 

 

   

 

 

 

Balance, December 31, 2013

     680,953         407,020      $ 4.52   

Options granted at market

     —           —          —     

Options exercised

     —           —          —     

Options forfeited or expired

     —           —          —     
  

 

 

    

 

 

   

 

 

 

Balance, March 31, 2014

     680,953         407,020      $ 4.52   
  

 

 

    

 

 

   

 

 

 

No options were granted or exercised during the three months ended March 31, 2014 and 2013. The aggregate intrinsic value of the outstanding exercisable options at March 31, 2014 and December 31, 2013 was $51,000 and $98,000, respectively.

At the stockholder meeting on May 15, 2013, shareholders approved the 2013 Stock Incentive Plan (the “2013 Plan”). An aggregate of 2,000,000 shares of the Company’s common stock may be issued pursuant to the 2013 Plan to officers, employees, non-employee directors and consultants of the Company and its affiliates. Awards under the plan may be in the form of stock options, which may constitute incentive stock options, or non-qualified stock options, restricted shares, restricted stock units, performance awards, stock bonus awards, share appreciation rights and other stock based awards. Stock options will be issued at an exercise price not less than 100% of the market value at the date of grant and expire no later than ten years after the date of grant. Through March 31, 2014, no stock options have been awarded under the plan. Stock awards typically vest over three years but vesting periods for non-employees may vest for longer periods or based on the achievement of performance goals.

The weighted average term of employee restricted stock is three years. During the year ended December 31, 2013, the Company issued 1,257,500 restricted shares under the 2013 Plan to employees and non-employee service providers of which 26,000 were forfeited. The weighted average grant date fair value for shares issued in 2013 was $1.94 per share. During the three months ended March 31, 2014 36,000 shares were forfeited and none were issued. At March 31, 2014, 804,500 shares are available for issuance under the 2013 Plan. Unrecognized compensation expense for employee restricted stock grants outstanding at March 31, 2014 and December 31, 2013 amounted to $844,620 and $1,019,000, respectively. Stock-based compensation expense for employees recognized in the accompanying statements of operations for the three months ended March 31, 2014, and 2013 was $104,000 and $32,000, respectively. Stock-based compensation recorded with respect to non-employee service providers during the three months ended March 31, 2014 and 2013 was $28,000 and $161,000.