NOTE 12.  STOCK-BASED COMPENSATION PLAN

 

Under the Company’s 2005 Stock Incentive Plan (the “2005 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 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 continued in effect until June 2015.

 

During the six months ended June 30, 2015, the Company issued 10 stock options under the 2005 Plan to employees of the Company, which options granted will vest in three installments as follows: 4 shall vest on December 31, 2016, and the remaining shares shall vest equally on December 31, 2017 and December 31, 2018.

 

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 all stock options granted during the six months ended June 30, 2015 was $35, which will be recognized over the vesting period of the options.

 

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 June 30, 2015 and 2014 was $575 and $318, respectively, and for the six months ended June 30, 2015 and 2014 was $1,038 and $537, respectively.  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 or using the Monte-Carlo pricing model.  As of June 30, 2015, there were 648 unvested stock options and unrecognized compensation cost of $1,596 related to unvested stock options, as well as 310 unvested restricted stock awards and unrecognized compensation cost of $65 related to unvested restricted stock awards.  As of June 30, 2015, the Company has unvested restricted stock awards which vest based upon satisfaction of a performance condition.  Achievement of the performance condition is currently not considered probable.  Consequently, the Company has not recorded compensation costs associated with the performance condition awards.