Note 12 - Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

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

12.   Stock-Based Compensation

On December 19, 1997, the Company’s stockholders approved the Merisel Inc. 1997 Stock Award and Incentive Plan (the “1997 Plan”).  On December 3, 2008, the Company’s stockholders approved the Merisel, Inc. 2008 Stock Award and Incentive Plan (the “2008 Plan”).  Under both the 1997 Plan and the 2008 Plan, incentive stock options and nonqualified stock options as well as other stock-based awards may be granted to employees, directors, and consultants.  The 1997 Plan authorized the issuance of an aggregate of 800,000 shares of Common Stock less the number of shares of Common Stock that remain subject to outstanding option grants under any of the Company’s other stock-based incentive plans for employees after December 19, 1997 and are not either canceled in exchange for options granted under the 1997 Plan or forfeited.  The 2008 Plan authorized the issuance of an aggregate of 500,000 shares of Common Stock, less the same limit for outstanding options.  At March 31, 2012, 0 shares were available for grant under the 1997 Plan, and 351,839 shares were available for grant under the 2008 Plan.  The grantees, terms of the grant (including option prices and vesting provisions), dates of grant and number of shares granted under the plans are determined primarily by the Board of Directors or the committee authorized by the Board of Directors to administer such plans, although incentive stock options are granted at prices which are no less than the fair market value of the Company's Common Stock at the date of grant.

Stock Option Grants

On January 11, 2012, the Company modified 100,000 of its Chief Executive Officer’s 300,000 fully vested stock options.  The modified options had an exercise price of $12.00 and an expiration date of November 22, 2014.  The modified options have an exercise price of $1.35 per share and an expiration date of November 22, 2016.  Compensation expense of $48, measured by the fair value of the modified  options at the grant date less the fair value of the modified options at the same date, was recorded during the current quarter.

On January 11, 2012, the Company granted 150,000 stock options to its other executive officers under the Stock Award and Incentive Plan.  The options have an exercise price of $1.35 and an expiration date of January 11, 2022. The options vest 25% on the grant date, 25% on December 31, 2012, 25% on December 31, 2013, and 25% on December 31, 2014. Compensation expense, measured by the options fair value at the grant date, will be recorded over the related vesting period starting in January 2012. Compensation expense related to these grants was $45 for the three months ended March 31, 2012.

The fair value of each option granted during 2012 was estimated on the date of grant using the Black-Scholes option pricing model.

As of March 31, 2012, 450,000 options remain outstanding under the Stock Award and Incentive Plan. A summary of the Company’s stock option activity and weighted average exercise price is as follows:

	Options		Weighted Average Exercise Price
Outstanding at December 31, 2011		300,000	$	8.33
Granted		150,000	$	1.35
Exercised		-		N/A
Canceled		-	$	N/A
Outstanding at March 31, 2012		450,000	$	3.64
Options exercisable at    March 31, 2012		337,500	$	4.40

The weighted average grant date fair value of options granted during the current quarter is $0.96.

As of March 31, 2012 and 2011, there was $98 and $0 of unrecognized compensation cost related to stock options, respectively.

Restricted Stock Grants

The Company has not awarded any restricted stock grants since August 2007. As of March 31, 2012 and 2011, all restricted stock grants were fully vested and there was no unrecognized compensation cost related to nonvested restricted share-based compensation arrangements.