11.

Stock Options and Award Programs

Stock Incentive Plan

The Company adopted the 2008 Stock Incentive Plan (the “2008 Plan”) on December 18, 2008. The 2008 Plan was amended and restated on December 15, 2009. The 2008 Plan will terminate on December 17, 2017. The 2008 Plan is administered by the Compensation Committee and authorizes the grant or award of incentive stock options, non-qualified stock options, restricted stock awards, stock appreciation rights, dividend equivalent rights, performance unit awards and phantom shares. The Company issues new shares of common stock upon the exercise of stock options. Any shares associated with forfeited awards are added back to the number of shares to be granted under the stock incentive plan.

Under the 2008 Plan, 6,578,049 shares were reserved for issuance under equity incentive awards to be issued pursuant to the 2008 Plan. As of March 31, 2016, there were 3,902,211 shares available to be issued under the 2008 Plan. As of March 31, 2016, the Company awarded restricted stock and non-qualified stock option awards of 500,000 and 2,175,838, respectively. A summary of restricted stock and non-qualified stock option award activity during the three months ended March 31, 2016 and 2015 is described in more detail below.

Restricted Stock Awards

On November 18, 2010, the Company’s Compensation Committee granted Steve L. Komar and James T. McCubbin each an award of 250,000 shares of restricted stock of the Company, the vesting of which is based upon the earlier to occur of (a) the seventh anniversary date of the grant, or (b) an acceleration event set forth in the award agreement with respect to such grant, including the acceleration of fifty (50) percent of such awards upon the Company reporting annual consolidated revenue in excess of $70 million. Accordingly, each of the executives had 125,000 shares vest in March 2016.

A summary of RSA activity as of March 31, 2016, and changes during three month period ended March 31, 2016 is set forth below:

	THREE MONTHS ENDED
	MARCH 31,
	2016			2015
		(Unaudited
NON-VESTED AWARDS	Shares			Shares

Non-vested balances, January 1		500,000	(1)		500,000
Vested		(250,000)			--
Non-vested balances, March 31		250,000			500,000

(1) The Company issued 209,438 shares of the Company’s common stock in connection with this accelerated vesting event. Mr. McCubbin elected to have 40,562 of such shares withheld in satisfaction of the corresponding tax liability.

At March 31, 2016, the Company had approximately $72,600 of total unamortized RSA compensation expense, related to the remaining 250,000 unvested RSAs that will be recognized over the weighted average remaining period of 1.7 years. The total intrinsic value of RSAs vested during the three month period ended March 31, 2016 was approximately $185,000. The intrinsic value of outstanding RSAs as of March 31, 2016 was approximately $150,000.

Stock Option Awards

The Company granted 50,000 stock options to a member of the Company’s board of directors during the three month period ended March 31, 2016. There were no stock options granted during the three month period ended March 31, 2015. A summary of stock option activity as of March 31, 2016, and changes during three month period ended March 31, 2016 is set forth below:

	THREE MONTHS ENDED				THREE MONTHS ENDED
	MARCH 31				MARCH 31
	2016				2015
				(Unaudited)
			Weighted				Weighted
			Average				Average
NON-VESTED AWARDS	Shares		Exercise Price		Shares		Exercise Price

Non-vested balances, January 1,		841,672	$	0.80		1,340,838	$	0.57
Granted		50,000	$	0.39		--		--
Cancelled		--		--		(250,000)		0.39
Vested		(439,172)	$	0.65		(416,666)	$	0.27
Non-vested balances, March 31,		452,500	$	0.90		674,172	$	0.83

	THREE MONTHS ENDED				THREE MONTHS ENDED
	MARCH 31				MARCH 31
	2016				2015
				(Unaudited)
			Weighted				Weighted
			Average				Average
OUTSTANDING AND EXERCISABLE AWARDS	Shares		Exercise Price		Shares		Exercise Price

Awards outstanding, January 1,		1,857,668	$	0.91		2,791,601	$	0.83
Granted		50,000	$	0.68		--		--
Cancelled		(292,000)	$	0.74		(250,000)	$	0.74
Exercised		--		--		(217,160)	$	0.58
Awards outstanding, March 31,		1,615,668	$	0.94		2,324,441	$	0.86

Awards vested and expected to vest,
March 31,		1,608,449	$	0.94		2,324,441	$	0.86

Awards outstanding and exercisable,
March 31,		1,163,168	$	0.77		1,650,269	$	0.76

During the three month period ended March 31, 2016, there were stock options of 292,000 that were cancelled, of which 180,000 were cancelled due to termination of employment and the remainder expired unexercised at the end of the option term.

The weighted-average remaining contractual life and the aggregate intrinsic value (the amount by which the fair value of the Company’s stock exceeds the exercise price of the option) of the stock options outstanding, exercisable, and vested and expected to vest as of March 31, 2016 are as follows:

			Vested and		Outstanding
			Expected to		and
	Outstanding		Vest		Exercisable
			(Unaudited)
Weighted-average remaining contractual life (in years)		3.3		2.9		2.9
Aggregate intrinsic value	$	34,200	$	34,200	$	34,200

Aggregate intrinsic value represents total pretax intrinsic value (the difference between WidePoint’s closing stock price on March 31, 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on March 31, 2016. The intrinsic value will change based on the fair market value of WidePoint’s stock. The total intrinsic value of options exercised during the three months ended March 31, 2015 was approximately $178,200.

At March 31, 2016, the Company had approximately $217,000 of total unamortized non-qualified stock compensation expense, net of estimated forfeitures, related to stock option plans that will be recognized over the weighted average remaining period of 1.9 years.

Share-based compensation (including restricted stock awards) represents both stock options based expense and stock grant expense. For the three month periods ended March 31, 2016 and 2015, the Company recognized share-based compensation expense of approximately $87,900 and $37,500, respectively.