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Note 5 - Share-Based Payments
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9 Months Ended | ||||||||||||||||||
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Jun. 30, 2012
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| Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
NOTE
5 – Share-Based
Payments
In
March 2008, the Company’s shareholders approved the
2008 Stock Incentive Plan which will be utilized to
provide equity opportunities and performance–based
incentives to attract, retain and motivate those persons
who make (or are expected to make) important
contributions to the Company. A total of
2,000,000 shares are available for issuance under this
plan. As of June 30, 2012, 761,932 shares had been
granted under the plan, of which 150,000 shares were in
the form of stock options and the remainder were in the
form of restricted stock or other share
grants.
Stock
Options
Under
the Company’s previous share based long-term
incentive compensation plan, the 1997 Stock Option Plan,
the Company granted non-qualified stock options to
employees. There are no shares available for
grant under this plan which expired on December 31,
2006. Options issued under this plan expire 10
years after the date of grant and generally vested 1/36
per month, with full vesting after three years. Under the
Company’s 2008 Stock Incentive Plan, options issued
expire 10 years after the date of grant and vest 1/36 per
month, with full vesting after three years. The Company
did not grant any options during the three or nine months
ended June 30, 2012 or 2011.
Compensation
expense is recognized only for share-based payments
expected to vest. The Company estimates forfeitures at the
date of grant based on historical experience and future
expectations. Stock compensation expense related to options
for the three and nine months ended June 30, 2012, was
approximately $15,000 and $60,000, respectively, and
$23,000 and $68,000 for the three and nine months ended
June 30, 2011, respectively.
During
the nine months ended June 30, 2012, 193,750 stock options
were exercised using the cashless exercise option available
under the plan which entitled the holder to 116,915 shares
of common stock. The intrinsic value of the
options exercised was $510,000. There was no
realized tax benefit from options exercised for the nine
months ended June 30, 2012, based on the “with and
without” approach. No stock options were
exercised during the three and nine months ended June 30,
2011.
The
following table summarizes the stock options outstanding
and exercisable at June 30, 2012:
The
aggregate intrinsic value in the table above is before
income taxes, based on the closing price of the
Company’s common stock of $5.87 per share as of the
last business day of the period ended June 30,
2012. As of June 30, 2012, the Company had no
unrecognized compensation expense relating to outstanding
stock options as all outstanding stock options were fully
vested. The deferred tax asset and realized
benefit from stock options exercised and other
share-based payments for the periods ended June 30, 2012
and 2011, was not recognized, based on the
Company’s election of the “with and
without” approach.
Restricted
Stock
The
Company issues restricted stock to employees, directors and
consultants. Such issuances may have vesting periods that
range from one to three years or the issuances may be
contingent on continued employment for periods that range
from one to three years. In addition, the
Company has issued stock awards to certain employees that
contain vesting provisions or provide for future issuance
contingent on continued employment.
The
Company granted a total of 54,750 shares of restricted
stock or shares issuable pursuant to promises to issue
shares of common stock during the nine months ended June
30, 2012. The fair value of the awards granted was
approximately $227,000. All such shares of restricted stock
vest and all such shares must be issued pursuant to
promises to issue common stock in September 2012
through September 2014, provided the grantee has not
voluntarily terminated service or been terminated for cause
prior to the vesting or issuance date. There were 2,500
restricted stock forfeitures during the three and nine
months ended June 30, 2012.
The
Company granted a total of 288,750 shares of restricted
stock or shares issuable pursuant to promise to issue
shares of common stock during the nine months ended June
30, 2011. The fair value of the awards granted
was approximately $1,657,000. All such shares of
restricted stock vest and all such shares must be issued
pursuant to promise to issue stock between September 2011
and December 2013, provided the grantee has not voluntarily
terminated service or been terminated for cause prior to
the vesting or issuance date. 2,500 shares of restricted
stock were forfeited during the nine months ended June 30,
2011.
The
Company recognized share-based compensation expense for
restricted stock or promises to issue shares of common
stock of approximately $189,000 and $596,000 for the three
and nine months ended June 30, 2012, respectively, $178,000
of which was included in accrued expenses at June 30, 2012,
since the related shares have not been issued. Share-based
compensation expense for restricted stock or promises to
issue shares of common stock for the three and nine months
ended June 30, 2011 was approximately $200,000 and
$503,000, respectively, of which $155,000 was included in
accrued expenses at June 30, 2011. This expense
is included in operating expenses for those respective
periods. As of June 30, 2012, there was approximately
$720,000, representing approximately 131,000 unvested
shares, of unrecognized compensation cost related to
non-vested restricted stock compensation arrangements
granted under the incentive plans. This
unrecognized cost will be recognized over the weighted
average period of the next 1.24 years.
Common
Stock Purchase Warrants
At
June 30, 2012, 80,000 warrants issued in connection with
investor relations were outstanding and
exercisable. The warrants have an exercise price
of $1.30 per share, remaining life of 4.04 years and
aggregate intrinsic value of approximately
$366,000. The aggregate intrinsic value is
before taxes, based on the closing price of the
Company’s common stock of $5.87 per share on the last
business day of the period ended June 30, 2012.
No
warrants were issued in the nine months ended June 30, 2012
or 2011.
There
were no warrant exercises in the nine months ended June 30,
2012 or 2011. There is no unrecognized
compensation cost related to warrants as of June 30,
2012.
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