Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation Plan

Stock-Based Compensation Plan
6 Months Ended
Jun. 30, 2014
Stock-Based Compensation Plan [Abstract]  
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 will continue in effect until June 2015 unless terminated sooner.


During the six months ended June 30, 2014, the Company issued 181 stock options under the 2005 Plan to employees of the Company.  Of the 181 options issued,  30 will vest in four equal consecutive quarterly tranches from the date of grant.  The remaining 151 options will vest in three installments as follows: 60 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:






Options Granted During the Six Months Ended June 30, 2014






Number of options



Option vesting period


1-5 Years

Grant price


$10.95 - $14.02

Dividend yield



Expected volatility (a)


45.7% - 55.1%

Risk-free interest rate


1.63% - 2.31%

Expected life (years) (b)


5.31 - 6.95

Weighted average fair value


$4.68 - $7.82



Since the Company’s historical volatility was not representative of the ongoing future business, the Company’s historical volatility was based on a combination of the Company’s volatility and the historical volatility of a peer group of companies within similar industries and similar size as the Company.



Because the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for these grants, the Company utilized the simplified method in developing an estimate of the expected term of these options.


Using these assumptions, the fair value of all stock options granted during the six months ended June 30, 2014 was $1,116, 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, 2014 and 2013 was $318 and $272, respectively, and for the six months ended June 30, 2014 and 2013 was $537 and $642, 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.  As of June 30, 2014, there were 1,024 unvested stock options and unrecognized compensation cost of $2,901 related to unvested stock options, as well as 310 unvested restricted stock awards and unrecognized compensation cost of $98 related to unvested restricted stock awards.