Note 6 - Stock-based Compensation

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

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

NOTE

6

— STOCK-BASED COMPENSATION

The

2004

Incentive Compensation Plan

In

2004,

the Company

’s Board of Directors (the “Board”) adopted the

2004

Incentive Compensation Plan (

“2004

Incentive Plan”), which provided for the grant of the following types of awards: incentive stock options, non-qualified stock options, restricted stock, stock appreciation rights (“SARs”), stock units, performance awards, phantom stock, incentive bonuses, and other possible related dividend equivalents to employees of the Company, directors and independent contractors. Under the

2004

Incentive Plan, a total of

3,750,000

shares of the Company’s common stock were reserved for issuance, all of which could be issued as options or as other forms of awards. Options and SARs granted to employees under the

2004

Incentive Plan cliff vest and are exercisable from the grant date as follows:

25%

after

24

months,

25%

after

36

months, and the remaining

50%

after

48

months. Options granted to non-employee directors under the

2004

Incentive Plan cliff vest and are exercisable

one

year after the grant date. Vested stock-based awards

may

be exercised for up to

ten

years from the grant date. The shares of common stock issued in respect of awards under the

2004

Incentive Plan are issued from the Company’s authorized share capital upon exercise of options or SARs. The

2004

Incentive Plan expired in

May 2012

upon adoption of the

2012

Incentive Compensation Plan (

“2012

Incentive Plan”), except as to stock-based awards outstanding under the

2004

Incentive Plan on that date.

The

2012

Incentive Compensation Plan

In

May 2012,

the Company

’s shareholders adopted the

2012

Incentive Plan, which provides for the grant of the following types of awards: incentive stock options, non-qualified stock options, restricted stock, SARs, stock units, performance awards, phantom stock, incentive bonuses, and other possible related dividend equivalents to employees of the Company, directors and independent contractors. Under the

2012

Incentive Plan, a total of

4,000,000

shares of the Company’s common stock have been reserved for issuance, all of which could be issued as options or as other forms of awards. Options and SARs granted to employees under the

2012

Incentive Plan typically vest and become exercisable as follows:

25%

vest

24

months after the grant date, an additional

25%

vest

36

months after the grant date, and the remaining

50%

vest

48

months after the grant date. Options granted to non-employee directors under the

2012

Incentive Plan will vest and become exercisable

one

year after the grant date. The term of stock-based awards typically ranges from

six

to

ten

years from the grant date. The shares of common stock issued in respect of awards under the

2012

Incentive Plan are issued from the Company’s authorized share capital upon exercise of options or SARs.

The

2012

Incentive Plan empowers

the Board, in its discretion, to amend the

2012

Incentive Plan in certain respects. Consistent with this authority, in

February 2014

the Board adopted and approved certain amendments to the

2012

Incentive Plan. The key amendments are as follows:

●     Increase of per grant limit: Section

15

(a) of the

2012

Incentive Plan was amended to allow the grant of up to

400,000

shares of the Company

’s common stock with respect to the initial grant of an equity award to newly hired executive officers in any calendar year; and

●     Acceleration of vesting: Section

15

(l) of the

2012

Incentive Plan was amended to clarify

the Company’s ability to provide in the applicable award agreement that part and/or all of the award will be accelerated upon the occurrence of certain predetermined events and/or conditions, such as a change in control (as defined in the

2012

Incentive Plan, as amended).