Stockholders' Equity

6 Months Ended

Jun. 30, 2012

Stockholders' Equity

Stockholders' Equity

Note 9 — Stockholders’ Equity

Authorized and Issued Capital Stock

As of June 30, 2012, the authorized capital stock of Carbon was 201,000,000 shares, consisting of 200,000,000 shares of common stock with a par value of $0.01 per share and 1,000,000 shares of preferred stock with a par value of $0.01 per share.

Pursuant to the merger (see Note 3), the Company assumed 236,460 options, 2,696,133 warrants and 1,956,912 shares of restricted stock outstanding that were granted by Nytis USA and SLSC prior to the merger.

Also pursuant to the merger, Nytis USA was authorized, as manager, of Nytis LLC, to offer to redeem all unvested, forfeitable restricted membership interests pursuant to the Nytis LLC restricted membership interest plan.  All of the restricted membership interests were redeemed in February 2011 for $300,000 and recorded as a general and administrative expense in the first quarter of 2011.

Stock Incentive Plan

On December 8, 2011, the stockholders of Carbon approved the adoption of Carbon’s 2011 Stock Incentive Plan (2011 Plan), under which 12,600,000 shares of common stock were authorized for issuance to Carbon officers, directors, employees and consultants eligible to receive awards under the 2011 Plan.

The plan provides for granting Director Stock Awards to Non-Employee Directors and for granting Incentive Stock Options, Non-qualified Stock Options, Restricted Stock Awards, Performance Awards and Phantom Stock Awards, or a combination of the foregoing as is best suited to the circumstances of the particular employee, officer, director or consultant.

Restricted Stock

The Company granted 80,000 and 1,610,000 shares of restricted stock for the three and six months ended June 30, 2012, respectively.  Restricted stock awards for employees vest ratably over a three-year service period and one-year for non-employee directors.  Compensation for restricted shares is measured at the grant date based on the fair value of the awards, determined by the closing price of the Company’s common stock on the grant date and the fair value is recognized on a straight line basis over the requisite service period (generally the vesting period).

Compensation cost recognized for restricted stock grants was approximately $112,000 and $216,000 for the three and six months ended June 30, 2012, respectively.  As of June 30, 2012, there was approximately $781,000 of total unrecognized compensation costs related to restricted stock.  This cost is expected to be recognized over the next 2.8 years.

Restricted Performance Units

During the first quarter of 2012 and for the six months ended June 30, 2012, the Company granted 1,290,000 restricted performance units.  The performance units represent a contractual right to receive one share of the Company’s common stock subject to the terms and conditions of the agreement including the relative achievement of the performance and the lapse of forfeiture restrictions pursuant to the terms and conditions of the agreement.

The Company accounts for grants of restricted performance units at their intrinsic value, re-measured at each reporting period.  The final measurement of compensation costs is based on the performance units that ultimately vest and the market price at the date the performance criteria are met.  At June 30, 2012, the Company estimated that none of the performance units would vest and accordingly, no compensation cost has been recorded.  As of June 30, 2012, if all performance goals are achieved and forfeiture restrictions pursuant to the terms and conditions of the agreement are met, estimated unrecognized compensation cost would be approximately $400,000.