Stock Incentive Plans

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

STOCK INCENTIVE PLANS

7. STOCK INCENTIVE PLANS

In August 2007, the Company adopted the Rubicon Technology Inc. 2007 Stock Incentive Plan, which was amended and restated effective in March 2011 (the “2007 Plan”), and which allowed for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The maximum number of shares that could be awarded under the 2007 Plan was 440,769 shares. Options granted under the 2007 Plan entitled the holder to purchase shares of the Company’s common stock at the specified option exercise price, which could not be less than the fair value of the common stock on the grant date. On June 24, 2016, the plan terminated with the adoption of the Rubicon Technology, Inc. 2016 Stock Incentive Plan, (the “2016 Plan”). Any existing awards under the 2007 Plan remain outstanding in accordance with their current terms under the 2007 Plan.

In June 2016, the Company’s stockholders approved adoption of the 2016 Plan effective as of March 17, 2016, which allows for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance awards and bonus shares. The Compensation Committee of the Board administers the 2016 Plan. The committee determines the type of award to be granted, the fair value, the number of shares covered by the award, and the time when the award vests and may be exercised.

Pursuant to the 2016 Plan, 319,342 shares of the Company’s common stock plus any shares subject to outstanding awards under the 2007 Plan that subsequently expire unexercised, are forfeited without the delivery of shares or are settled in cash, will be available for issuance under the 2016 Plan. The 2016 Plan will automatically terminate on March 17, 2026, unless the Company terminates it sooner.

The following table summarizes the activity of the stock incentive and equity plans as of June 30, 2021, and changes during the six months then ended:

	Shares available for grant			Number of options outstanding			Weighted- average option exercise price		Number of restricted stock and board shares issued		Number of RSUs outstanding
At January 1, 2021		296,105			20,100		$	9.71		99,570		48,753
Granted		(38,330	)		—			—		—		3,030
Exercised/issued		—			(11,250	)		6.10		—		(3,750	)
Cancelled/forfeited		61,567			(50	)		44.10		—		(45,003	)
At June 30, 2021		319,342			8,800		$	14.13		99,570		3,030

The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock. Based on the fair value of the common stock at June 30, 2021, there was $21,560 of intrinsic value arising from 7,000 in the money stock options exercisable and outstanding.

The Company uses the Black-Scholes option pricing model to value stock options. The Company uses historical stock price average to determine its volatility assumptions. The assumed risk-free rates were based on U.S. Treasury rates in effect at the time of grant with a term consistent with the expected option lives. The expected term is based upon the vesting term of the Company’s options. The forfeiture rate of 36.13% is based on the history of forfeited options. The expense is allocated using the straight-line method. For the three and six months ended June 30, 2021, the Company did not record any stock option compensation expense. For the three and six months ended June 30, 2020, the Company recorded $2,000 and $5,000, respectively, of stock option compensation expense. As of June 30, 2021, the Company had $0 of total unrecognized compensation cost related to non-vested stock option awards granted under the Company’s stock-based plans

As of December 31, 2020 and June 30, 2021, the Company did not have any non-vested options.

As of June 30, 2021, there was approximately $30,000 of compensation cost related to the non-vested RSUs remaining.

A summary of the Company’s RSUs for the six month period ended June 30, 2021 is presented below:

	RSUs outstanding			Weighted average price at time of grant		Aggregate intrinsic value
Non-vested RSUs as of January 1, 2021		48,753		$	—
Granted		3,030			9.90
Vested		(3,750	)		—
Cancelled		(45,003	)		—
Non-vested RSUs at June 30, 2021		3,030		$	9.90	$	30,000

The Company’s board of directors are compensated partially in cash and partially in restricted stock units. For the three and six months ended June 30, 2021 and 2020, the Company recorded $7,500 and $15,000, respectively, of stock compensation expense related to restricted stock units.