NOTE 12.  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, directors, officers or consultants of the Company or its subsidiaries.  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.  As of December 31, 2012, the number of shares authorized and reserved for issuance under the 2005 Plan is 5,015, subject to automatic annual increase equal to 4% of the total number of shares of the Company’s outstanding common stock.

 

Options Granted:

 

During the year ended December 31, 2012, the Company issued 770 stock options, under the Company’s 2005 Plan, to employees of the Company.  Of the 770 options issued, 40 will vest in four equal consecutive quarterly tranches from the date of grant.  500 options will vest in four equal consecutive yearly tranches on April 1, 2015, 2016, 2017 and 2018.  45 options will vest in three installments as follows: 17 shall vest on March 31, 2015 and the remaining shares shall vest equally on March 31, 2016 and March 31, 2017.  The remaining 185 options granted will vest in four installments as follows: 43 shares shall vest on December 31, 2014, 64 shares shall vest on December 31, 2015, 55 shares shall vest on December 31, 2016, and 23 shares shall vest on December 31, 2017. 

 

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 years ended December 31, 2012, 2011, and 2010 was $3,011, $987, and $2,315, respectively, which will be amortized over the vesting period of the options.

 

 

 

 

Restricted Stock Granted:

 

On May 28, 2010, the Company entered into a restricted stock award agreement with Mr. Warren B. Kanders.  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 awards granted during the years ended December 31, 2011 and 2010 was $1,567 and $2,990, respectively, which is being 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 and the Predecessor, was as follows: 

 

 

 

 

 

 

 

 

 

 

 

 

 

A summary of changes in outstanding options during the year ended December 31, 2012 is as follows:

 

 

 

The following table summarizes the exercise price range, weighted average exercise price, and remaining contractual lives by significant ranges for options outstanding and exercisable as of December 31, 2012:

 

 

 

The fair value of unvested restricted stock awards is determined based on the market price of our shares of common stock on the grant date.  As of December 31, 2012, there were 1,155 unvested stock options and unrecognized compensation cost of $3,709 related to unvested stock options, as well as 750 unvested restricted stock awards for which the compensation cost has been fully recognized.