7. Stock Options Plans

12 Months Ended

Dec. 31, 2012

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

Stock Options Plans

On December 10, 2009, the Company established two stock option plans.  The Board of Directors approved the two plans called the 2009 Stock Option Plan and the 2009 Directors Stock Option Plan and these plans received shareholder approval at the Company’s 2010 annual meeting.  These plans are described below.

2009 Stock Option Plan

The 2009 Stock Option Plan is for officers and certain full-time and part-time employees of the Company. Non-employee directors of the Company are not entitled to participate under this plan. The 2009 Stock Option Plan provides for 2,500,000 shares of common stock for issuance upon the exercise of stock options granted under the plan. Under this plan, stock options are granted at the discretion of the Compensation Committee of the Board of Directors at an option price not less than the fair market value of the stock on the date of grant. The options are exercisable in accordance with terms specified by the Compensation Committee not to exceed ten years from the date of grant. Option activity under this plan follows.

	Number of shares			Weighted average exercise price
Balance as of January 1, 2011		604,000		$	0.53
Granted		400,000		$	0.48
Exercised		––			––
Expired		(34,000	)		0.48
Balance as of December 31, 2011		970,000		$	0.51
Granted		––			––
Exercised		––			––
Expired		––			––
Balance as of December 31, 2012		970,000		$	0.51

The weighted average grant date fair value of options granted was $0.30 in 2011.  There were no options granted in 2012.

The following table summarizes information about fixed stock options under the 2009 Stock Option Plan outstanding on December 31, 2012.

		Options Outstanding						Options Exercisable
Exercise Prices		Number Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	0.53		585,000		1.11	$	0.53		585,000	$	0.53
$	0.48		385,000		3.30	$	0.48		288,750	$	0.48
$	0.48 to 0.53		970,000		1.98	$	0.51		873,750	$	0.51

2009 Director Stock Option Plan

On December 10, 2009 the Company established the 2009 Director Stock Option Plan (the "Directors Plan"). The Directors Plan was established for all directors of the Company except for any director who is a full-time employee or full-time officer of the Company. The option price is the fair market value of the common stock on the date the option is granted. There are 400,000 shares authorized for issuance under the Directors Plan. Each option expires five years from the grant date. Option activity under this plan follows. 

	Number of shares		Weighted average exercise price
Balance as of January 1, 2011		90,000		0.40
Granted		60,000		0.36
Exercised		––		––
Expired		––		––
Balance as of December 31, 2011		150,000		0.38
Granted		60,000		0.26
Exercised		––		––
Expired		––		––
Balance as of December 31, 2012		210,000	$	0.35

The weighted average grant date fair value of options granted was $0.22 in 2011 and $0.12 in 2012.

The following table summarizes information about fixed stock options under the Directors Plan on December 31, 2012.

		Options Outstanding						Options Exercisable
Exercise Prices		Number Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	0.25-0.26		60,000		4.40	$	0.26		60,000	$	0.26
$	0.27-0.41		60,000		2.40	$	0.34		60,000	$	0.34
$	0.35-0.36		60,000		3.40	$	0.36		60,000	$	0.36
$	0.53		30,000		1.11	$	0.53		30,000	$	0.53
$	0.25-0.53		210,000		3.07	$	0.35		210,000	$	0.35

The Black-Scholes range of assumptions for the Zoom Telephonics’ options for 2012 and 2011 are shown below:

Assumptions	2009 Stock Option Plan and the 2009 Directors Stock Option Plan
Expected life	2.5 (yrs) - 3.5 (yrs)
Expected volatility	57.53% - 104.86%
Risk-free interest rate	0.37% - 1.92%
Expected dividend yield	0.00%

The unrecognized stock based compensation expense related to non-vested stock awards was approximately $6 thousand as of December 31, 2012.  This amount will be recognized through the first quarter of 2013.