Employee Stock Benefit Plans

3 Months Ended

Mar. 31, 2017

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

Employee Stock Benefit Plans

Note 10

Employee Stock Benefit Plans:

The Company has a Non-Employee Director Stock Option Plan. This plan has authorized 74,000 shares; of which 2,135 shares had been issued or were reserved for issuance as awards of shares of common stock, and 12,079 shares were reserved for outstanding stock options. The number of shares available for future issuance pursuant to this plan is 71,374 as of March 31, 2017.

In addition, the Company has a 2005 Equity Compensation Plan (“2005 Equity Plan”). The 2005 Equity Plan has authorized 1,200,000 shares, of which 519,078 shares had been issued or were reserved for issuance as awards of shares of common stock, and 133,649 shares were reserved for outstanding options as of March 31, 2017. The number of shares available for future issuance pursuant to this plan is 547,273 as of March 31, 2017.

Stock option activity under all of the Company’s share-based compensation plans for the three months ended March 31, 2017 was as follows:

	Number of Options			Weighted Average Exercise Price
Outstanding, January 1, 2017		134,150		$	85.22
Granted		-			-
Exercised		-			-
Cancelled		(23,285	)		71.73
Outstanding, March 31, 2017		110,865		$	88.05
Options exercisable at March 31, 2017		107,112		$	87.97

At March 31, 2017, there was $152 of total unrecognized compensation cost related to non-vested option grants and stock awards that is expected to be recognized over a weighted-average period of 1.64 years. Following the completion of the transaction described in Note 1, such compensation will be accelerated.

The Company uses the Black-Scholes option-pricing model to estimate fair value of grants of stock options. With respect to grants of options, the risk-free rate of interest is based on the U.S. Treasury rates appropriate for the expected term of the grant or award.

On February 26, 2015, the Company issued 299,000 restricted stock units to a number of employees. The restricted shares have a purchase price of $0.01 per share and vest, and cease to be subject to the Company’s right of repurchase, over a four-year period. The Company determined the fair value of the awards to be the quoted market price of the Company’s common stock units on the date of issuance less the value paid for the award. The aggregate fair value of these restricted stock issued was $2,766.

Restricted stock vests ratably over a three-to-five year period, depending upon the terms of the grant. Employees must remain employed by the Company on each vesting date in order to have unrestricted ownership in these shares; employees who leave before a vesting date forfeit the shares in which they have not yet vested and the issuance of those shares is cancelled. As of March 31, 2017, 96,861 shares had been cancelled due to forfeiture by employees.

On October 29, 2015, the Company issued 1,000 shares of common stock to a non-employee director for an aggregate fair value of $3.

Total stock based compensation expense was $811, and $433, for the three months ended March 31, 2017 and 2016 respectively including amounts relating to consultants.