Stock Based Compensation

12 Months Ended

Dec. 31, 2016

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

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

6.       Stock Based Compensation

The Stanley Furniture Company, Inc. 2012 Incentive Compensation Plan (Incentive Compensation Plan) provides for the granting of performance grants, performance shares, stock options, restricted stock, restricted stock units, and stock appreciation rights to employees and certain service providers.  Under this plan, the aggregate number of common shares that may be issued through awards of any form is 1.6 million. In addition, shares authorized under the 2008 Incentive Compensation Plan are also available for issuance under the Incentive Compensation Plan if they are unissued or subsequently expire, are forfeited or terminate unexercised.  

Stock Options

The options are issued at market value on the date of grant and have a term of 10 years from the grant date.   In general, employee grants vest ratably over a four to five-year period and Director grants vest after one year.  The fair value of each option is amortized into compensation expense on a straight-line basis between the grant date for the option and each vesting date.  We have estimated the fair value of all stock option awards as of the date of the grant by applying the Black-Scholes pricing valuation model.  

The application of this valuation model involves assumptions that are judgmental and sensitive in the determination of compensation expense.  No options were granted in 2016 or 2015.  

Stock option activity for the two years ended December 31, 2016, follows:

	Number of shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2014	1,371,354	$	5.97	5.7
Forfeited	(184,798)		4.31
Expired	(20,364)		23.41
Outstanding at December 31, 2015	1,166,192	$	5.93	4.7
Expired	(36,610)		23.88
Outstanding at December 31, 2016	1,129,582	$	5.35	3.8	$	-
Exercisable at December 31, 2016	1,129,582	$	5.35	3.8	$	-

There were no stock options exercised in 2016 and 2015.

Restricted Stock

The restricted stock awards are accounted for as “non-vested equity shares” until the awards vest or are forfeited.  In general, restricted stock awards for employees are time vested or performance vested and for non-employee directors vest at the end of their current term on the Board.  The fair value of each share of restricted stock is the market price of our stock on the grant date.  The fair value of each time vested award is amortized into compensation expense on a straight-line basis between the award date and the vesting date. Performance based awards are amortized into compensation expense based on the probability of meeting the performance criteria.   In 2016 and 2015, 221,745 and 140,442 of restricted stock awards vested and were released, respectively.  

The following table summarizes information about restricted stock awards for the two years ended December 31, 2016:

		Weighted-Average Grant Date  Fair Value
	Number of shares
Outstanding at December 31, 2014	544,248	$	3.74
Forfeited	(97,549)	$	3.45
Vested	(140,442)	$	3.29
Granted	228,676	$	2.86
Outstanding at December 31, 2015	534,933	$	3.53
Vested	(221,745)	$	4.01
Granted	230,836	$	2.52
Outstanding at December 31, 2016	544,024	$	2.89

As of December 31, 2016, there was $379,000 of total unrecognized compensation cost related to non-vested restricted stock awards, which is expected to be recognized over a weighted-average remaining vesting period of 2.4 years.