Annual report pursuant to Section 13 and 15(d)

Stock-Based Compensation

v3.19.1
Stock-Based Compensation
12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation
Stock-Based Compensation
 
We maintain a stock-based compensation program intended to attract, retain and provide incentives for talented employees and directors and align stockholder and employee interests. Currently, we grant options and restricted stock units ("RSUs") from the 2010 Equity Compensation Plan (“2010 ECP”) and the 2017 Equity Compensation Plan ("2017 ECP"). Option and restricted stock unit vesting periods are generally up to three years.

Compensation Expense

We recorded stock-based compensation expense for all equity incentive plans of $915,469 and $1,279,807 for the years ended December 31, 2018 and 2017, respectively. Total compensation cost not yet recognized at December 31, 2018 was $944,426 to be recognized over a weighted-average recognition period of 1.6 years.


Award Information and Activity

The following table summarizes the stock grants outstanding under our 2005 Long-Term Incentive Plan ("2005 LTIP"), 2010 ECP and 2017 ECP plans as of December 31, 2018:
 
Options Outstanding
 
RSUs Outstanding
 
Options and RSUs Exercised
 
Available Shares
 
Total
2017 ECP

 
733,500

 
41,664

 
1,524,836

 
2,300,000

2010 ECP
250,498

 
838,364

 
3,380,919

 
612,237

 
5,082,018

2005 LTIP (*)
13,748

 

 
950,085

 

 
963,833

Total
264,246

 
1,571,864

 
4,372,668

 
2,137,073

 
8,345,851


(*) Expired June 2015

The fair value of restricted stock units is determined using market value of the common stock on the date of the grant.  The fair value of stock options is determined using the Black-Scholes-Merton valuation model.  The use of this valuation model involves assumptions that are judgmental and highly sensitive in the determination of compensation expense and include the expected life of the option, stock price volatility, risk-free interest rate, dividend yield, exercise price, and forfeiture rate. Forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period.  The forfeiture rate, which is estimated at a weighted average of 0% of unvested options outstanding, is adjusted periodically based on the extent to which actual forfeitures differ, or are expected to differ, from the previous estimate. 

At December 31, 2018, the 2005 LTIP and 2010 ECP plans had 264,246 outstanding options and all were exercisable with an aggregate intrinsic value of $0, a weighted average exercise price of $2.84 and a weighted average remaining contractual term of 2.1 years.

The following table summarizes our stock option activity under the 2005 LTIP and 2010 ECP plans during 2018:
 
Options
 
Weighted Average Exercise Price
Outstanding, beginning of year
264,246

 
$
2.84

Granted

 
$

Forfeited, expired or cancelled

 
$

Exercised

 
$

Outstanding, end of year
264,246

 
$
2.84

Exercisable, end of year
264,246

 
$
2.84



No options were granted during 2018 or 2017.

Expected volatility is based on the historical volatility of our common stock over the period commensurate with or longer than the expected life of the options. The expected life of the options is based on the vesting schedule of the option in relation to the overall term of the option. The risk free interest rate is based on the market yield of the U.S. Treasury Bill with a term equal to the expected term of the option awarded. We do not anticipate paying any dividends so the dividend yield in the model is zero.

The following table summarizes our restricted stock activity for 2018:
 
Restricted Stock
 
Weighted Average Fair Value
Outstanding, beginning of year
1,071,538

 
$
1.84

Granted
1,664,266

 
$
0.76

Exercised
641,843

 
$
2.26

Forfeited
522,097

 
$
1.04

Outstanding, end of year
1,571,864

 
$
0.79