5. Stock Options, Restricted Stock and Share-Based Compensation

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

5.    Stock Options, Restricted Stock and Share-Based Compensation

We have stock-based compensation plans under which we have granted, and may grant in the future, incentive stock options, non-qualified stock options, and restricted stock to employees and non-employee members of the Board of Directors. Our share-based compensation expense was as follows ($ in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Share-based compensation expense	$	278	$	167	$	500	$	315

Stock Options

The GlobalSCAPE, Inc. 2010 Employee Long-Term Equity Incentive Plan is our current stock-based incentive plan for our employees.  Provisions and characteristics of this plan include the following:

· It authorizes the issuance of up to three million shares of common stock for stock-based incentives including stock options and restricted stock awards.

· The exercise price, term and other conditions applicable to each stock option or stock award granted are determined by the Compensation Committee of the Board of Directors.

· The exercise price of stock options is set on the grant date and may not be less than the fair market value per share of our stock at market close on that date.

· Stock options we issue generally become exercisable ratably over a three-year period and expire ten years from the date of grant.

· We issued no restricted stock awards under this plan during the 2016 or 2015 periods.

· As of June 30, 2016, stock-based incentives for up to 204,495 shares remained available for issuance in the future under this plan.

Our stock option activity has been as follows:

				Weighted
				Average		Weighted Average		Aggregate
				Exercise		Remaining		Intrinsic
	Number of			Price		Contractual		Value
	Shares			Per Share		Term in Years		(000's)
Outstanding at December 31, 2015		2,091,325		$	2.45		6.09	$	3,277
Granted		985,300		$	3.58
Forfeited		(264,205	)	$	3.20
Exercised		(121,115	)	$	2.14
Outstanding at June 30, 2016		2,691,305		$	2.80		6.24	$	2,486
Exercisable at June 30, 2016		1,434,000		$	2.28		3.52	$	2,072

Additional information about our stock options is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Weighted average fair value of options granted	$	1.58	$	1.41	$	1.63	$	1.38
Intrinsic value of options exercised	$	110,709	$	25,842	$	182,454	$	280,958
Cash received from stock options exercised	$	137,130	$	28,408	$	258,801	$	317,974
Number of options that vested		72,480		50,880		266,346		181,534
Fair value of options that vested	$	117,328	$	49,182	$	376,313	$	199,296
Unrecognized compensation expense related to non-vested options at end of period	$	1,693,228	$	814,783	$	1,693,228	$	814,783
Weighted average years over which non-vested option expense will be recognized		2.46		2.17		2.46		2.17

As of June 30, 2016
				Options Outstanding				Options Exercisable
				Weighted
				Average		Weighted				Weighted
		Underlying		Remaining		Average		Number of		Average
Range of		Shares		Contractual		Exercise		Underlying		Exercise
Exercise Prices		Outstanding		Life		Price		Shares		Price
$	0.85 - $1.43		185,100		3.29	$	1.15		185,100	$	1.15
$	1.47 - $2.32		652,205		4.14	$	1.83		618,925	$	1.84
$	2.34 - $3.52		1,389,350		7.21	$	3.13		499,975	$	2.78
$	3.53 - $4.21		463,000		7.44	$	3.85		130,000	$	4.10
Total options			2,689,655						1,434,000

We used the following assumptions to determine compensation expense for our stock options using the Black-Scholes option-pricing model:

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Expected volatility		54	%		57	%		55	%		57	%
Expected annual dividend yield		1.50	%		2.40	%		1.50	%		2.40	%
Risk free rate of return		1.38	%		1.58	%		1.48	%		1.58	%
Expected option term (years)		6.00			6.00			6.00			6.00

Based upon our dividend payment activity in recent years, beginning with the first quarter of 2015, we added an expected annual dividend yield to these assumptions.

Restricted Stock Awards

In May 2015, we adopted the 2015 Non-Employee Directors Long Term Incentive Plan (“2015 Directors Plan”). This plan provides for the issuance of either stock options or restricted stock awards for up to 500,000 shares of our common stock. Provisions and characteristics of this plan include the following:

· The exercise price, term and other conditions applicable to each stock option or stock award granted are determined by the Compensation Committee of the Board of Directors.

· Restricted stock awards are initially issued with a legend restricting transferability of the shares until the recipient satisfies the vesting provision of the award, which is generally continuing service for one year subsequent to the date of the award.

· As of June 30, 2016, stock based incentives for up to 340,000 shares remained available for issuance in the future under this plan.

Our restricted stock awards activity has been as follows:

						Total
				Grant Date		Fair Value of
	Number of			Fair Value		Shares That
	Shares			Per Share		Vested
Restricted Shares Outstanding at December 31, 2015		80,000		$	3.34
Shares granted with restrictions		80,000		$	3.31
Shares vested and restrictions removed		(80,000	)	$	3.34	$	276,000
Restricted Shares Outstanding at June 30, 2016		80,000		$	3.31
Unrecognized compensation expense for non-vested shares as of June 30, 2016
Expense to be recognized in future periods	$	223,561
Weighted average number of months over which expense is expected to be recognized		10.20