Note 16 - Shareholders' Equity

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

16—SHAREHOLDERS’

EQUITY

16

-

1

Common stock

As of

December

31,

2016,

EDAP TMS S.A.’s common stock consisted of

29,098,144

issued shares (including

3,283,284

new shares issued in the

April

2016

Placement for an amount of €

6,063

thousand after deduction of capital increase costs of

€943

thousand) fully paid and with a par value of

€0.13

each.

28,727,616

of the shares were outstanding.

16

-

2

Pre-emptive subscription rights

Shareholders have preemptive rights to subscribe on a

pro rata

basis for additional shares issued by the Company for cash. Shareholders

may

waive such preemptive subscription rights at an extraordinary general meeting of shareholders under certain circumstances. Preemptive subscription rights, if not previously waived, are transferable during the subscription period relating to a particular offer of shares.

16

-

3

Dividend rights

Dividends

may

be distributed from the statutory retained earnings, subject to the requirements of French law and the Company’s by-laws. The Company has not distributed any dividends since its inception as the result of an accumulated statutory deficit of

€13,740

thousand. Dividend distributions, if any, will be made in euros. The Company has no plans to distribute dividends in the foreseeable future.

16

-

4

Treasury stock

As of

December

31,

2016,

the

370,528

shares of treasury stock consisted of (i)

190,238

shares acquired between

August

and

December

1998

for

€649

thousand, and (ii)

180,290

shares acquired in

June

and

July

2001

for

€493

thousand. All

370,528

shares of treasury stock have been acquired to cover outstanding stock options (see Note

16

-

5).

16

-

5

Stock-option plans

As of

December

31,

2016,

the

370,528

ordinary shares held as treasury stock were dedicated to serve stock purchase option plans as follows:

127,100

shares which

may

be purchased at a price of

€2.38

per share pursuant to the exercise of options that were granted on

June

25,

2010.

As of

December

31,

2016,

EDAP TMS S.A. sponsored

four

stock purchase and subscription option plans:

On

May

22,

2007,

the shareholders of the Company authorized the Board of Directors to grant up to

600,000

options to subscribe to

600,000

new Shares. Conforming to this stock option plan, the Board of Directors granted

504,088

options to subscribe to new Shares to certain employees of EDAP TMS on

October

29,

2007,

and

95,912

options to subscribe to new Shares to certain employees of EDAP TMS on

June

25,

2010.

Under this plan, a total of

377,838

options to subscribe to new shares were still in force on

December

31,

2016.

On

June

24,

2010,

the shareholders of the Company authorized the Board of Directors to grant up to

229,100

options to purchase up to

229,100

Shares. Conforming to this stock option plan, the Board of Directors granted

229,100

options to purchase Shares to certain employees of EDAP TMS on

June

25,

2010.

Under this plan,

127,100

options were still in force on

December

31,

2016.

On

December

19,

2012,

the shareholders authorized the Board of Directors to grant up to

500,000

options to subscribe to

500,000

new shares at a fixed price to be set by the Board of Directors. Conforming to this stock option plan, the Board of Directors granted

500,000

options to subscribe Shares to certain employees of EDAP TMS on

January

18,

2013.

Under this plan,

362,500

options were still in force on

December

31,

2016.

On

February

18,

2016,

the shareholders authorized the Board of Directors to grant up to

1,000,000

options to subscribe to

1,000,000

new shares at a fixed price to be set by the Board of Directors. Conforming to this stock option plan, the Board of Directors granted

575,000

options to subscribe Shares to certain employees of EDAP TMS on

April

26,

2016.

Under this plan,

560,000

options were still in force on

December

31,

2016.

As of

December

31,

2016,

a summary of stock option activity to purchase or to subscribe to Shares under these plans is as follows:

	2016					2015					2014
	Options			Weighted average exercise price (€)		Options			Weighted average exercise price (€)		Options			Weighted average exercise price (€)
Outstanding on January 1,		917,188			2.79		1,095,850			2.76		1,310,850			2.70
Granted		575,000			3.22		-			-		-			-
Exercised		-			-		(72,412	)		2.13		(750	)		3.99
Forfeited		(64,750	)		3.30		(106,250	)		2.88		(90,250	)		2.07
Expired		-			-		-			-		(124,000	)		2.60
Outstanding on December 31,		1,427,438			2.94		917,188			2.79		1,095,850			2.76
Exercisable on December 31,		774,938			2.87		724,688			3.03		784,600			3.09
Shares purchase options available for grant on December 31		243,428					232,428					232,428

The following table summarizes information about options to purchase existing Shares held by the Company, or to subscribe to new Shares, at

December

31,

2016:

	Outstanding options								Fully vested options (1)
Exercise price (€)	Options		Weighted average remaining contractual life		Weighted average exercise price (€)		Aggregate Intrinsic Value (2)		Options		Weighted average exercise price (€)		Aggregate Intrinsic Value (2)
3.99		327,838		0.8		3.99		-		327,838		3.99		-
2.38		127,100		3.5		2.38		93,004		127,100		2.38		93,004
3.22		560,000		9.3		3.22		-		-		-		-
1.91		362,500		6.0		1.91		435,629		270,000		1.91		324,469
1.88		50,000		3.5		1.88		61,587		50,000		1.88		61,587
1.88 to 3.99		1,427,438		4.6		2.94		590,220		774,938		2.87		479,060

(1) Fully vested options are all exercisable options

(2) The aggregate intrinsic value represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $3.28 at December 31, 2016, which would have been received by the option holders had all in-the-money option holders exercised their options as of that date.

A summary of the status of the non-vested options to purchase shares or to subscribe to new shares as of

December

31,

2016,

and changes during the year ended

December

31,

2016,

is presented below:

	Options			Weighted average Grant-Date Fair Value (€)
Non-vested at January 1, 2016		192,500			1.32
Granted		575,000			1.67
Vested		(96,250	)		1.32
Forfeited		(18,750	)		1.60
Non-vested at December 31, 2016		652,500			1.62

As of

December

31,

2016,

there were

€605

thousands of total unrecognized compensation expenses related to non-vested stock-options, over a weighted average period of

4.33

year.