• Filing Date: 2018-08-20
  • Form Type: 10-Q
  • Description: Quarterly report
v3.10.0.1
Stock-based Compensation
6 Months Ended
Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-based Compensation
Stock-based Compensation

On June 27, 2017, the shareholders of the Company voted to amend, and the Company amended, the Amended and Restated 2010 Omnibus Incentive Plan (as amended, the "Omnibus Plan") to increase the number of shares authorized for issuance thereunder by 9,900,000 shares. Awards under the Omnibus Plan may consist of incentive awards, stock options, stock appreciation rights, performance shares, performance units, and shares of common stock, restricted stock, restricted stock units or other stock-based awards as determined by the compensation committee of the Company's board of directors. The Omnibus Plan has an aggregate of 12,600,000 shares of common stock authorized for issuance thereunder, subject to adjustment as provided therein.


Options

As of December 31, 2017, all options to purchase shares of common stock issued by the Company were fully vested. There was no stock-based compensation expense relating to stock options granted under the Omnibus Plan during the three months and six months ended June 30, 2018 and 2017, respectively.

As of June 30, 2018, options to purchase 85,000 shares of common stock were outstanding under the Omnibus Plan at a weighted average exercise price of $6.94 per share. The following table presents the activity of the Company’s outstanding stock options of common stock for the six months ended June 30, 2018:
Common Stock Options
 
Number of
Shares
 
Weighted
Average Exercise Price
per Share
 
Weighted
Average
Remaining
Contractual
Term
 
Aggregate
Intrinsic
Value
Options outstanding, January 1, 2018
 
542,102

 
$
8.75

 
1.33

 
$

Options granted
 

 

 

 


Options exercised
 

 

 

 


Options forfeited
 
(457,102
)
 
$
9.09

 

 


Options expired
 

 

 

 


Options outstanding, June 30, 2018
 
85,000

 
$
6.94

 
1.94

 
$

Exercisable at June 30, 2018
 
85,000

 
$
6.94

 
1.94

 


Unvested at June 30, 2018
 

 

 

 
$



As of June 30, 2018, all outstanding stock options had an exercise price above the fair market value of the common stock on that date. There are no remaining unamortized amounts to be recognized on these options.

Restricted Stock

The Company incurred additional stock-based compensation expense of approximately $138,000 and $125,000 relating to restricted stock granted to its board of directors and certain employees during the three months ended June 30, 2018 and 2017, respectively, and approximately $211,000 and $264,000 during the six months ended June 30, 2018 and 2017, respectively.

During the year ended December 31, 2016, the Company granted 65,212 shares of restricted stock to its directors under the Omnibus Plan, which were subject to a one year vesting period that commenced on the date of grant. The fair value of the restricted stock was valued at approximately $255,000 based on the closing price of the Company’s shares on the date prior to the grant date. The Company incurred stock-based compensation expense related to these 65,212 shares of restricted stock of approximately $47,000 and $106,000 during the three months and six months ended June 30, 2017, respectively. The 65,212 shares of restricted stock vested during the year ended December 31, 2017.

During the year ended December 31, 2016, the Company granted 200,000 shares of restricted stock units to certain employees under the Omnibus Plan, which are subject to a two year vesting period that commenced on the date of grant. The fair value of the unvested restricted stock was valued at approximately $674,000 based on the closing price of the Company’s shares on the day prior to the grant date. The Company incurred stock-based compensation expense of approximately $41,000 and $79,000 related to these 200,000 shares of restricted stock during the three months ended June 30, 2018 and 2017, respectively and $23,000 and $158,000 during the six months ended June 30, 2018 and 2017, respectively. Approximately 20,000 shares of restricted stock were forfeited during the six months ended June 30, 2018 with the balance of 74,000 shares of restricted stock vested during the three months and six months ended June 30, 2018.

During the year ended December 31, 2017, the Company granted 51,132 shares of restricted stock to its directors under the Omnibus Plan, which are subject to a one year vesting period that commenced on the date of grant. The fair value of the unvested restricted stock was valued at approximately $17,000 based on the closing price of the Company’s shares on the date prior to the grant date. The Company incurred stock-based compensation expense related to these 51,132 shares of restricted stock of approximately $0 during the three months and six months ended June 30, 2018. Approximately 42,610 shares of restricted stock vested during the year ended December 31, 2017, with 8,522 pending vesting at June 30, 2018. These shares of restricted stocks did not exist at June 30, 2017.
During the year ended December 31, 2017, the Company granted 2,000,000 shares of restricted stock units to certain employees under the Omnibus Plan, which are subject to a two year vesting period that commenced on the date of grant. The fair value of the unvested restricted stock was valued at approximately $745,000 based on the closing price of the Company's shares on the day prior to the grant date. The Company incurred stock-based compensation expense of approximately $88,000 and $178,000 related to these 2,000,000 shares of restricted stock during the three months and six months ended June 30, 2018. All 2,000,000 shares remained unvested at June 30, 2018.These shares of restricted stocks did not exist at June 30, 2017.
During the three months and six months ended June 30, 2018, the Company granted 50,000 and 150,000 shares of restricted stock units to certain employees under the Omnibus Plan, with 100,000 shares and 50,000 subject to a two and three year vesting period, respectively, that commenced on the date of grant. The fair value of the unvested restricted stock was valued at approximately $58,000 based on the closing price of the Company's shares on the day prior to the grant date. The Company incurred stock-based compensation expense of approximately $6,000 and $7,000 related to these 150,000 shares of restricted stock during the three months and six months ended June 30, 2018. All 150,000 shares remained unvested at June 30, 2018.

During the three months and six months ended June 30, 2018, the Company established an ad hoc Capital Structure Committee, (the "Committee") consisting of members of the board of directors, to undertake a review of the Company's capital structure. As compensation to the sole non-employee member of the Committee, the Company granted 400,000 restricted stock units under the Omnibus Plan, which will vest on the later of (i) September 30, 2018 and (ii) termination of the director's service on the Committee. The fair value of the restricted stock was valued at approximately $128,000 based on the closing price of the Company’s shares on the date prior to the grant date. The Company incurred stock-based compensation expense related to these 400,000 restricted stock units of approximately $3,000 during the three months and six months ended June 30, 2018. The 400,000 restricted stock units remained unvested at June 30, 2018.

The following table presents the activity of the Company’s unvested shares of restricted stock for the six months ended June 30, 2018:
Common Unvested Shares
Number of
Shares
Outstanding January 1, 2018
2,102,522

Granted
550,000

Vested
(74,000
)
Forfeited
(20,000
)
Outstanding June 30, 2018
2,558,522



The aggregate intrinsic value of the awards of 8,522, 150,000, 400,000 and 2,000,000 shares is $3,000, $48,000, $128,000 and $640,000, respectively and the remaining weighted average life of these awards is 0.08 years, 2.08 years, 0.25 years and 1.38 years respectively as of June 30, 2018. As of June 30, 2018, a total of $651,000 in stock based compensation remained unrecognized.

Stock Appreciation Rights (SARs)

During the three months and six months ended June 30, 2018, the Company issued 100,000 SARs to the sole non-employee member of the Committee, which will expire 10 years after the date the SARs were granted. The SARs will vest on the later of (i) September 30, 2018 and (ii) termination of the director's service on the Committee and have a fair value of $16,800 on the grant date. Each SAR entitles the holder to receive, upon exercise, an amount equal to the excess of (a) the fair market value per share of stock on the exercise date, over (b) the exercise price, which is $1.00, being not less than the fair market value per share of stock on the grant date. Upon exercise of the SARs, the stock appreciation amount shall be paid, as determined solely at the discretion of the Company, in (a) whole shares, (b) cash, or (c) a combination of both cash and shares. The Company incurred no stock-based compensation expense related to these 100,000 SARs during the three months and six months ended June 30, 2018. The 100,000 SARs remained unvested at June 30, 2018.