Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation Plan

v3.19.1
Stock-Based Compensation Plan
3 Months Ended
Mar. 31, 2019
Stock-Based Compensation Plan [Abstract]  
Stock-Based Compensation Plan

NOTE 10.  STOCK-BASED COMPENSATION PLAN



Under the Company’s current 2015 Stock Incentive Plan (the “2015 Plan”), the Company’s Board of Directors (the “Board of Directors”) has flexibility to determine the type and amount of awards to be granted to eligible participants, who must be employees, directors, officers or consultants of the Company or its subsidiaries.  The 2015 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 2015 Plan to any employee in any calendar year may not exceed 500 shares.  The 2015 Plan will continue in effect until December 2025 unless terminated sooner. 



During the three months ended March 31, 2019, the Company did not issue any stock options under the 2015 Plan to employees of the Company.



Market Condition Restricted Shares Granted:



On January 7, 2019, the Company issued and granted to an employee a restricted stock award of 350 restricted shares under the 2015 Plan, that will vest as follows: (A) the stock award will vest and become nonforfeitable if, on or before January 7, 2024, the closing price of the Company’s common stock shall have equaled or exceeded $15.00 per share for twenty consecutive trading days (such 20th day being the “Price Trigger Date”); and (B) once the Price Trigger Date occurs, (i) 117 shares of the Company’s common stock shall vest on each of the first and second anniversary of the Price Trigger Date; and (ii) 116 shares of the Company’s common stock shall vest on the third anniversary of the Price Trigger Date. For computing the fair value of the 350 restricted shares with a market condition, 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 assumptions below.



On January 7, 2019, the Company issued and granted to an employee a restricted stock award of 150 restricted shares under the 2015 Plan, that will vest as follows: (A) the stock award will vest and become nonforfeitable if, on or before January 7, 2024, the closing price of the Company’s common stock shall have equaled or exceeded $15.00 per share for twenty consecutive trading days (such 20th day being the Price Trigger Date); and (B) once the Price Trigger Date occurs, the shares shall equally vest on each of the first, second, third and fourth anniversary of the Price Trigger Date.  For computing the fair value of the 150 restricted shares with a market condition, 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 assumptions below.





 

 



 

January 7, 2019



 

 

Number issued

 

500

Vesting period

 

$15.00 stock price target

Grant price

 

$10.21

Expected volatility

 

42.4%

Risk-free interest rate

 

2.53%

Expected term (years)

 

4.28 - 5.28

Weighted average fair value

 

$7.92



Using these assumptions, the fair value of the market condition restricted stock awards granted on January 7, 2019 was approximately $3,962.



The total non-cash stock compensation expense related to restricted stock, stock options and stock awards recorded by the Company for the three months ended March 31, 2019 and 2018 was $785 and $499, respectively.  For the three months ended March 31, 2019 and 2018, the majority of stock-based compensation costs were classified as selling, general and administrative expenses.



As of March 31, 2019, there were 1,598 unvested stock options and unrecognized compensation cost of $4,714 related to unvested stock options, as well as 850 unvested restricted stock awards and unrecognized compensation costs of $3,873 related to unvested restricted stock awards.