Note 16 - Share-Based Compensation

12 Months Ended

Mar. 31, 2014

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

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

Note 16 Share-Based Compensation

The Company has equity compensation plans: the Speed Commerce 1992 Stock Option Plan and the Speed Commerce 2004 Stock Plan (collectively, “the Plans”). The 2004 Plan provides for equity awards, including stock options, restricted stock and restricted stock units. Eligible participants under the 2004 Plan are all employees (including officers and directors), non-employee directors, consultants and independent contractors. The 1992 Plan expired on July 1, 2006, and no further grants are allowed under this Plan, however, there are 18,500 outstanding options under this Plan as of March 31, 2014.

Equity Compensation Plans

The Company currently grants stock options, restricted stock and restricted stock units under an equity compensation plan. The Company adopted the 2004 Stock Plan to attract and retain eligible persons to perform services for the Company. Eligible recipients include all employees, without limitation, officers and directors who are also employees as well as non-employee directors, consultants and independent contractors or employees of any of the Company’s subsidiaries. A maximum number of 7.5 million shares of common stock have been authorized and reserved for issuance under the 2004 Stock Plan. The number of shares authorized may also be increased from time to time by approval of the Board of Directors and the shareholders. The 2004 Stock Plan terminates in September 2014. There were approximately 1.7 million shares available for future grant under the 2004 Stock Plan at March 31, 2014.

The Company is authorized to grant, among other equity instruments, stock options and restricted stock under the 2004 Stock Plan. Stock options have a maximum term fixed by the Compensation Committee of the Board of Directors, not to exceed 10 years from the date of grant. Stock options become exercisable during their terms in the manner determined by the Compensation Committee of the Board of Directors. Vesting for performance-based stock awards is subject to the performance criteria being achieved.

Restricted stock awards are non-vested stock awards that may include grants of restricted stock or restricted stock units. Restricted stock awards are independent of option grants and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. Such awards vest as determined by the Compensation Committee of the Board of Directors, depending on the grant. Prior to vesting, ownership of the shares cannot be transferred. The Company expenses the cost of the restricted stock awards, which is the grant date fair value, ratably over the period during which the restrictions lapse. The grant date fair value is based on the Company’s opening stock price on the date of grant.

In each fiscal 2014, 2013 and 2012, each director who is not an employee of the Company was granted an option to purchase 12,000 shares of common stock under the 2004 Stock Plan on April 1 of the applicable fiscal year, with an exercise price equal to fair market value. One newly appointed non-employee director was granted an option to purchase 50,000 shares of common stock in fiscal 2014. These options are designated as non-qualified stock options. Each option granted prior to September 15, 2005, vests in five annual increments of 20% of the original option grant beginning one year from the date of grant and expires on the earlier of (i) six years from the date of the grant, and (ii) one year after the person ceases to serve as a director. Each option granted on or after September 15, 2005, vests in three annual increments of 33 1/3% of the original option grant beginning one year from the date of grant, expires on the earlier of (i) ten years from the date of grant, and (ii) one year after the person ceases to serve as a director, and provides for the acceleration of vesting if the person ceases to serve as a director as a result of the Company’s mandatory director retirement policy.

The Company is entitled to (a) withhold and deduct from future wages of the participant (or from other amounts that may be due and owing to the participant from the Company), or (b) make other arrangements for the collection of all legally required amounts necessary to satisfy any and all federal, state and local withholding and employment-related tax requirements (i) attributable to the grant or exercise of an option or a restricted stock award or to a disqualifying disposition of stock received upon exercise of an incentive stock option, or (ii) otherwise incurred with respect to an option or a restricted stock award, or (iii) require the participant promptly to remit the amount of such withholding to the Company before taking any action with respect to an option or a restricted stock award.

Stock Options

A summary of the Company’s stock option activity as of March 31, 2014 as follows:

	Year ended March 31, 2014
	Number of options			Weighted average exercise price
Options outstanding, beginning of period		2,904,061		$	1.93
Granted		841,511			3.25
Exercised		(206,674	)		1.70
Forfeited or expired		(379,159	)		2.11
Options outstanding, end of period		3,159,739		$	2.28
Options exercisable, end of period		1,433,077		$	2.04
Shares available for future grant, end of period		1,697,000

The weighted average fair value of options granted during the year ended March 31, 2014, 2013 and 2012 was $1.6 million, $1.3 million and $1.1 million, respectively, and the total fair value of options exercisable was $1.8 million at March 31, 2014. The weighted average remaining contractual term for options outstanding was 7.8 years and for options exercisable was 6.6 years at March 31, 2014.

The aggregate intrinsic value represents the total pretax intrinsic value, based on the Company’s closing stock price of $3.64 as of March 31, 2014, which theoretically could have been received by the option holders had all option holders exercised their options as of that date. The total intrinsic value of stock options exercised during the years ended March 31, 2014, 2013 and 2012 was $440,000, $82,000 and $362,000, respectively. The aggregate intrinsic value for options outstanding was $4.4 million and for options exercisable was $2.4 million at March 31, 2014. The aggregate intrinsic value for options outstanding was $1.4 million and for options exercisable was $399,000 at March 31, 2013. The aggregate intrinsic value for options outstanding was $235,000 and for options exercisable was $132,000 at March 31, 2012.

As of March 31, 2014, total compensation cost related to non-vested stock options not yet recognized was $2.4 million, which is expected to be recognized over the next 1.2 years on a weighted-average basis.

During the years ended March 31, 2014, 2013 and 2012, the Company received cash from the exercise of stock options totaling $338,000, $90,000 and $27,000, respectively. There was no excess tax benefit recorded for the tax deductions related to stock options during either the years ended March 31, 2014, 2013 or 2012.

Restricted Stock

Restricted stock granted to employees typically has a vesting period of three years and expense is recognized on a straight-line basis over the vesting period, or when the performance criteria have been met. The value of the restricted stock is established based on the market price on the date of the grant or if based on performance criteria, on the date it is determined the performance criteria will be met. Restricted stock awards vesting is based on service criteria or achievement of performance targets. All restricted stock awards are settled in shares of common stock.

A summary of the Company’s restricted stock activity as of March 31, 2014 as follows:

	Year ended March 31, 2014
	Shares			Weighted average grant date fair value
Unvested, beginning of period		574,865		$	1.73
Granted		434,640			3.35
Vested		(194,338	)		1.75
Forfeited		(113,198	)		1.76
Unvested, end of period		701,969		$	2.72

The total fair value of restricted stock awards granted during the year ended March 31, 2014 was $1.5 million.

The total fair value of restricted stock awards vested during the years ended March 31, 2014, 2013 and 2012 was approximately $340,000, $240,000 and $719,000, respectively.

As of March 31, 2014, total compensation cost related to non-vested restricted stock awards not yet recognized was $1.8 million which is expected to be recognized over the next 1.3 years on a weighted-average basis. There was no excess tax benefit recorded for the tax deductions related to restricted stock during the years ended March 31, 2014, 2013 or 2012.

Share-Based Compensation Valuation and Expense Information

The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an option award. The fair value of options granted during the years ended March 31, 2014, 2013 and 2012 were calculated using the following assumptions:

	Year Ended March 31, 2014				Year Ended March 31, 2013				Year Ended March 31, 2012
Expected life (in years)			5.0			5.0	-	6.5		5.0	-	6.5
Expected volatility		60.8	-	65.4%		64.3	-	70.1%			68%
Risk-free interest rate		0.76	-	1.55%		0.62	-	1.25%		0.80	-	2.24%
Expected dividend yield			0.0%				0.0 %				0.0%

Expected life uses historical employee exercise and option expiration data to estimate the expected life assumption for the Black-Scholes grant-date valuation. The Company believes this historical data is currently the best estimate of the expected term of a new option. The Company uses a weighted-average expected life for all awards and has identified one employee population. Expected volatility uses the Company’s stock historical volatility for the same period of time as the expected life. The Company has no reason to believe that its future volatility will differ from the past. The risk-free interest rate is based on the U.S. Treasury rate in effect at the time of the grant for the same period of time as the expected life. Expected dividend yield is zero, as the Company historically has not paid dividends. The Company used a forfeiture rate of 4.63% during each of the years ended March 31, 2014, 2013 and 2012.

Share-based compensation expense related to employee stock options, restricted stock and restricted stock units, net of estimated forfeitures for the years ended March 31, 2014, 2013 and 2012 was $1.0 million, $793,000 and $803,000, respectively. These amounts are included in general and administrative expenses in the Consolidated Statements of Operations. No amount of share-based compensation was capitalized.

Share-based compensation expense related to employee stock options, restricted stock and restricted stock units, net of estimated forfeitures reclassified as discontinued operations were $284,000, $190,000 and $368,000 for the years ended March 31, 2014, 2013 and 2012 was, respectively.