Note 8 – Stock Compensation Plans

In June 2009, our stockholders approved and in June 2014 our stockholders reapproved the VASCO Data Security International, Inc. 2009 Equity Incentive Plan (the “2009 Equity Plan”). The 2009 Equity Plan permits the issuance of awards in a variety of forms, including (1) shares of our common stock, (2) nonqualified and incentive stock options for the purchase of our common stock, (3) stock appreciation rights, (4) deferred stock, (5) other stock-based awards (including restricted shares, performance shares, performance units and other stock unit awards), and (6) cash incentive awards.

The 2009 Equity Plan may provide performance incentives to employees and non-employee directors, consultants and other key persons of the company. The plan are administered by the Compensation Committee as appointed by the Board of Directors and is intended to be a non-qualified plan.

As of December 31, 2017, the remaining number of shares allowed to be issued under the 2009 Equity Plan was 6,108 shares of the company’s common stock, representing 15.2% of the issued and outstanding shares of the company as of such date.

The following table summarizes compensation expense recorded under the two plans.


	For the year ended December 31,
	2017		2016		2015
Restricted stock	$	3,466	$	2,766	$	3,835
Long-term compensation plan		1,906		2,105		1,815
Total Compensation	$	5,372	$	4,871	$	5,650

Time-Based Restricted Stock

Time-based restricted stock awards granted to non-employee directors vest on the first anniversary date of the grant. Awards granted to an executive officer in 2017 vest in equal semi-annual installments over four years. Shares are subject to forfeiture if the service period requirement is not met. Compensation expense equal to the market value of the stock on the grant date is recorded on a straight-line basis over the vesting period as required by ASC 718 Compensation-Stock Compensation. Compensation expense was $2,148, $2,177, and $1,356 for 2017, 2016, and 2015, respectively. The following table summarizes the time-based restricted stock activity for the year ended December 31, 2017:


		Weighted
		average	Aggregate
		remaining	intrinsic
	Shares	term (years)	value
Outstanding at January 1, 2017	276	1.95	$	3,767
Shares vested	(110)			1,513
Shares awarded	120			1,717
Shares forfeited	(18)			337
Outstanding at December 31, 2017	269	1.58	$	3,736

The unamortized future compensation expense for time-based restricted stock awards was $2,734 at December 31, 2017.

Performance-Based Restricted Stock

Performance-based restricted stock awards granted to executive officers in 2017 were subject to achievement of three year performance targets established by the Board of Directors. Earned shares related to three-year targets vest upon completion of the three-year period. Shares are subject to forfeiture if the service period requirement is not met.

Compensation expense, equal to the market value of the stock on the grant date, is recorded on a graded basis over the vesting period at the performance level deemed probable, as required by ASC 718. Compensation expense in 2017, 2016, and 2015 was $1,318, $589, and $2,479. Unamortized future compensation expense for performance-based restricted stock was $892 at December 31, 2017.

The following table summarizes activity related to unvested performance restricted stock shares during 2017:


		Weighted
	Total	average	Aggregate
	Unvested	remaining	intrinsic
	Shares	term (years)	value
Outstanding at January 1, 2017	170	1.71	$	2,321
Shares vested	(25)			363
Shares awarded	171			2,573
Shares forfeited	(81)			1,190
Outstanding at December 31, 2017	236	1.85	$	3,276

At December 31, 2017, total unvested shares consists of 34 earned shares and 202 unearned shares.