Stock-Based Compensation Plan
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Jun. 30, 2011
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Stock-Based Compensation Plan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Plan |
NOTE 11. STOCK-BASED COMPENSATION PLAN
Under the Company's 2005 Stock Incentive Plan (the "2005 Plan"), the Board of Directors has flexibility to determine the type and amount of awards to be granted to eligible participants, who must be employees of the Company or its subsidiaries, directors, officers or consultants to the Company. The 2005 Plan allows for grants of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and restricted units. The aggregate number of shares of common stock that may be granted through awards under the 2005 Plan to any employee in any calendar year may not exceed 500 shares. The 2005 Plan will continue in effect until June 2015 unless terminated sooner.
During the six months ended June 30, 2011, the Company issued 118 stock options, under the Company's 2005 Plan, to directors and employees of the Company. Of the 118 options issued, 40 will vest in four equal consecutive quarterly tranches from the date of grant, 38 will vest in three installments as follows: 15 shares shall vest on December 31, 2012 and the remaining shares shall vest equally on December 31, 2013 and December 31, 2014. The remaining 40 options granted will vest in three installments as follows: 16 shares shall vest on December 31, 2013 and the remaining shares shall vest equally on December 31, 2014 and December 31, 2015.
For computing the fair value of the stock-based awards, the fair value of each option grant has been estimated as of the date of grant using the Black-Scholes option-pricing model with the following assumptions:
Using these assumptions, the fair value of the stock options granted during the six months ended June 30, 2011 was approximately $475, which will be amortized over the vesting period of the options.
On May 28, 2010, the Company entered into a restricted stock award agreement (the "RSA Agreement") with Mr. Warren B. Kanders. Under the RSA Agreement, on January 17, 2011, the Company granted to Mr. Kanders a seven-year restricted stock award of 250 shares of common stock pursuant to the Company's 2005 Plan, which award will vest on the date the Fair Market Value (as defined in the 2005 Plan) of the Company's common stock shall have equaled or exceeded $14.00 per share for 20 consecutive trading days. For computing the fair value of the 250 seven-year restricted stock-based awards, the fair value of each restricted stock award grant has been estimated as of the date of grant using the Monte-Carlo pricing model with the following assumptions:
Using these assumptions, the fair value of the restricted stock award granted on January 17, 2011 was approximately $1,567, which will be amortized over the expected life of the award.
The total non-cash stock compensation expense related to stock options and restricted stock recorded by the Company during the three and six months ended June 30, 2011 and 2010, respectively, was as follows.
The fair value of unvested restricted stock awards is determined based on the market price of our shares on the grant date. As of June 30, 2011, there were 600 unvested stock options and unrecognized compensation cost of approximately $1,841 related to unvested stock options, as well as 750 unvested restricted stock awards and unrecognized compensation cost of approximately $1,665 related to unvested restricted stock awards. |