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Note 5 - Share-Based Payments
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Dec. 31, 2011
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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 December 31, 2011,
750,432 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 months ended December
31, 2011 or 2010.
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 each of the
three months ended December 31, 2011 and 2010, was
approximately $23,000.
During
the three months ended December 31, 2011, 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 three
months ended December 31, 2011, based on the “with and
without” approach. No stock options were
exercised during the three months ended December 31,
2010.
The
following table summarizes the stock options outstanding and
exercisable at December 31, 2011:
The
aggregate intrinsic value in the table above is before income
taxes, based on the Company’s closing stock price of
$4.51 per share as of the last business day of the period
ended December 31, 2011. As of December 31, 2011,
the Company had unrecognized compensation expense of
approximately $38,000 related to unvested stock
options. These expenses will be recognized over
approximately 5 months. The deferred tax asset and realized
benefit from stock options exercised and other share-based
payments for the periods ended December 31, 2011 and 2010,
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 44,750 shares of restricted stock
or shares issuable pursuant to promises to issue shares of
common stock during the three months ended December 31, 2011.
The fair value of the awards granted was approximately
$187,000. 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 December
2013, provided the grantee has not voluntarily terminated
service or been terminated for cause prior to the vesting or
issuance date.
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 three months ended December 31,
2010. 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. There were no restricted
stock forfeitures during the three months ended December 31,
2011, or 2010.
The
Company recognized share-based compensation expense for
restricted stock or promises to issue shares of common stock
of approximately $205,000 for the three months ended December
31, 2011, $60,000 of which is included in accrued expenses at
December 31, 2011, 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 months ended December 31, 2010 was
approximately $114,000, of which $53,000 was included in
accrued expenses at December 31, 2010. This
expense is included in selling, general and administrative
expenses for those respective periods. As of December 31,
2011, there was approximately $1,079,000, representing
approximately 197,000 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 1.57
years.
Common
Stock Purchase Warrants
At
December 31, 2011, 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 4.54 years and
aggregate intrinsic value of approximately
$257,000. The aggregate intrinsic value is before
taxes, based on the Company’s closing stock price of
$4.51 per share on the last day of business for the period
ended December 31, 2011.
No
warrants were issued in the three months ended December 31,
2011 or 2010.
There
were no warrant exercises in the three months ended December
31, 2011 or 2010. There is no unrecognized
compensation cost related to warrants as of December 31,
2011.
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