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STOCK-BASED COMPENSATION
9 Months Ended
Sep. 30, 2015
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
NOTE 10 - STOCK-BASED COMPENSATION
 
Stock Option Plans
 
The Company adopted the 1995 Stock Option Plan, pursuant to which the Company had the right to grant options to purchase up to an aggregate of 1,250,000 shares of common stock. The Company also adopted the 1999 Stock Option Plan, pursuant to which the Company had the right to grant stock awards and options to purchase up to 2,813,000 shares of common stock. The Company also adopted the 1999 Director Option Plan, pursuant to which the Company had the right to grant options to purchase up to an aggregate of 600,000 shares of common stock. The 1995 Stock Option Plan and 1999 Stock and Director Option Plans expired and the Company cannot issue additional options under these plans.
 
The Company adopted the 2007 Equity Compensation Plan, pursuant to which, as amended, the Company may grant stock options, restricted stock and other equity-based awards with respect to up to an aggregate of 2,500,000 shares of common stock. The Company also adopted the 2009 Non-Employee Director Equity Compensation Plan, pursuant to which, as amended (the “2009 Director Plan”), the Company may grant options to purchase up to an aggregate of 600,000 shares of common stock. In June 2015, the Company adopted the 2015 Equity Compensation Plan (the “2015 Plan”) pursuant to which the Company may grant stock options, restricted stock and other equity-based awards with respect to up to an aggregate of 1,200,000 shares of common stock. The plans are administered by the Compensation Committee of the Company’s Board of Directors, which has the authority to determine, among other things, the term during which an option may be exercised (not more than 10 years), the exercise price of an option and the vesting provisions.
 
The Company recognizes all employee share-based payments in the statement of operations as an operating expense, based on their fair values on the applicable grant date. As a result, the Company recorded stock-based compensation expense of $143,000 and $457,000, respectively, for the three- and nine-month periods ended September 30, 2014 and $65,000 and $221,000, respectively, for the three- and nine-month periods ended September 30, 2015, in connection with awards made under the stock option plans.
 
On March 21, 2014, the Company and its former Chief Executive Officer (the “Former CEO”) entered into a Separation and General Release Agreement (the “Separation Agreement”). Under the terms of the Separation Agreement, the vesting of the Former CEO’s unvested stock options and restricted stock were accelerated and the term to exercise the stock options was extended to fifteen (15) months. Due to the modification of the terms of the stock option and restricted stock agreements, the Company recognized $327,000 of additional stock-based compensation expense for the three-month period ended March 31, 2014 which is included in the stock option and restricted stock stock-based compensation expense.
 
On April 4, 2014, each of Lawrence S. Burstein, Harold D. Copperman, Robert J. Farrell and Michael P. Monaco (collectively, the “Former Board Members”) informed the Company of their respective decisions not to stand for re-election to the Company’s board of directors (the “Board”) at the 2014 annual meeting of stockholders, which was held on June 20, 2014 (the “2014 Annual Meeting”).In connection with the Former Board Members’ departure, the vesting of certain options granted to the Former Board Members under the 2009 Director Plan was accelerated and the post termination exercise period was extended from a period of three (3) months to fifteen (15) months after the Former Board Members ceased to serve as members of the Board on June 20, 2014. Due to the modification of the terms of the stock options, the Company recognized $49,000 of additional stock-based compensation expense for the three-month period ended June 30, 2014 which is included in the stock option stock-based compensation expense.
 
The following table summarizes the activity relating to the Company’s stock options for the nine-month period ended September 30, 2015:
 
 
 
 
 
 
 
Weighted-
 
 
 
 
 
 
 
Weighted-
 
Average
 
 
 
 
 
 
 
Average
 
Remaining
 
Aggregate
 
 
 
 
 
Exercise
 
Contractual
 
Intrinsic
 
 
 
Options
 
Price
 
Term
 
Value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at beginning of year
 
 
2,209,000
 
$
6.84
 
 
 
 
 
 
Granted
 
 
-
 
 
-
 
 
 
 
 
 
Exercised
 
 
(555,000)
 
 
3.96
 
 
 
 
 
 
Forfeited or expired
 
 
(399,000)
 
 
10.28
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at end of period
 
 
1,255,000
 
$
7.02
 
5 years
 
$
34,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at end of period
 
 
944,000
 
$
7.48
 
4 years
 
$
34,000
 
 
The fair value of each option grant on the date of grant is estimated using the Black-Scholes option-pricing model reflecting the following weighted-average assumptions:
 
 
 
September 30,
 
 
 
2014
 
 
2015
 
 
 
 
 
 
 
 
Expected volatility
 
 
44.4
%
 
 
-
 
Expected life of options
 
 
3.0 - 4.0 years
 
 
 
-
 
Risk free interest rate
 
 
1.2
%
 
 
-
 
Dividend yield
 
 
0
%
 
 
-
 
Weighted average fair value of options granted during the period
 
$
1.91
 
 
$
-
 
 
Expected volatility is based on historical volatility of the Company’s common stock and the expected life of options is based on historical data with respect to employee exercise periods.
 
The fair value of options vested during the nine-month periods ended September 30, 2014 and 2015 was $702,000 and $497,000, respectively. The total intrinsic value of options exercised during the nine -month periods ended September 30, 2014 and 2015 was $192,000 and $1,522,000, respectively.
 
As of September 30, 2015, there was approximately $545,000 of unrecognized compensation cost related to non-vested options granted under the Company’s stock option plans. That cost is expected to be recognized over a weighted-average period of 2.42 years.
 
The Company estimates forfeitures at the time of valuation and reduces expense ratably over the vesting period. This estimate is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate.
 
Restricted Stock
 
The Company grants restricted stock to employees, whereby the employees are contractually restricted from transferring the shares until they are vested. The stock is unvested stock at the time of grant and, upon vesting, there are no contractual restrictions on the stock. The fair value of each share is based on the Company’s closing stock price on the date of the grant. A summary of all non-vested restricted stock for the nine-month period ended September 30, 2015 is as follows:
 
 
 
 
 
Weighted-
 
 
 
Number of
 
Average
 
 
 
Non-vested
 
Grant Date
 
 
 
Shares
 
Fair Value
 
 
 
 
 
 
 
Restricted stock, non-vested, beginning of year
 
 
616,000
 
$
5.69
 
Granted
 
 
232,000
 
 
6.00
 
Vested
 
 
(206,000)
 
 
5.74
 
Forfeited
 
 
(48,000)
 
 
5.70
 
 
 
 
 
 
 
 
 
Restricted stock, non-vested, end of period
 
 
594,000
 
$
5.79
 
 
The Company recorded stock-based compensation expense of $186,000 and $500,000, respectively, for the three- and nine-month periods ended September 30, 2014 and $401,000 and $1,010,000, respectively, for the three- and nine-month periods ended September 30, 2015, in connection with restricted stock grants. As of September 30, 2015, there was $2,870,000 of total unrecognized compensation cost related to non-vested shares. That cost is expected to be recognized over a weighted-average period of 2.86 years.
 
Performance Shares
 
The Company has granted performance shares to key employees pursuant to the 2007 Equity Compensation Plan, as amended, and may continue, from time to time, to grant performance shares under such plan or the 2015 Equity Compensation Plan. The issuance of the shares of the Company’s common stock underlying the performance shares is subject to the achievement of stock price targets of the Company’s common stock at the end of a three-year measurement period from the date of issuance, with the ability to achieve prorated performance shares during interim annual measurement periods. The annual measurement period is based on a trading day average of the Company’s stock after the announcement of annual results. If the stock price performance triggers are not met, the performance shares will not vest and will automatically be returned to the plan. If the stock price performance triggers are met, then the shares will be issued to the employees. Under the applicable accounting guidance, stock compensation expense at the fair value of the shares expected to vest is recorded even if the aforementioned stock price targets are not met. Stock-based compensation expense related to these performance shares for the three-and nine-month periods ended September 30, 2014 and 2015 was insignificant.
 
The following table summarizes the activity relating to the Company’s performance shares for the nine-month period ended September 30, 2015:
 
 
 
Non-vested
 
 
 
Shares
 
 
 
 
 
Performance shares, non-vested, beginning of year
 
 
23,000
 
Granted
 
 
-
 
Vested
 
 
-
 
Forfeited
 
 
(23,000)
 
 
 
 
 
 
Performance shares, non-vested, end of period
 
 
-