Stock Options

9 Months Ended

Sep. 30, 2013

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

5.	Stock Options

The Company adopted, with stockholder approval, the Innodata Inc. 2013 Stock Plan (the “2013 Plan”). The maximum number of shares of common stock that may be delivered, purchased or used for reference purposes with respect to awards granted under the 2013 Plan is 1,041,096 shares, plus any shares subject to an award or portion of any award under the Innodata Isogen, Inc. 2009 Stock Plan, as amended and restated (the “Prior Plan”) that were outstanding as of June 4, 2013 that expire or terminate unexercised, become unexercisable or are forfeited or otherwise terminated, surrendered or canceled as to any shares without the delivery of shares of stock or other consideration. Shares of stock subject to options or stock appreciation rights (“SARs”) granted under the 2013 Plan count against the share reserve as one share for every one share subject to such option or SAR and shares subject to any other type of award granted under the 2013 Plan count against the share reserve as two shares for every one share subject to such award. If any award, or portion of an award, under the 2013 Plan expires or terminates unexercised, becomes unexercisable or is forfeited or otherwise terminated, surrendered or canceled as to any shares without the delivery of shares of stock or other consideration, the shares subject to such award will thereafter be available for further awards under the 2013 Plan as provided in the next sentence. Shares of stock that again become available for awards pursuant to the expiration, termination, forfeiture or cancellation of any award (other than an option or SAR) granted under the 2013 Plan, or of any award (other than an option or SAR) granted after March 31, 2011 under the Prior Plan, will be added back as two shares for every one share subject to such award or Prior Plan award. All other awards under the 2013 Plan and all other awards under the Prior Plan will be added back as one share for every one share subject to such award or Prior Plan award. The number of shares used for reference purposes in connection with these awards will be considered "delivered" for purposes of computing the maximum number of shares that may be delivered under the Plan.

A summary of option activity under the Company’s stock option plans as of September 30, 2013, and changes during the period then ended, is presented below:

	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value

Outstanding at January 1, 2013	2,986,057	$	2.75
Granted	1,014,022		3.39
Exercised	(201,500)		0.96
Forfeited/Expired	(433,444)		2.99
Outstanding at September 30, 2013	3,365,135	$	3.02	4.49	$	381,872
Exercisable at September 30, 2013	1,100,057	$	3.00	1.87	$	352,722

Vested and expected to vest at
September 30, 2013	3,365,135	$	3.02	4.49	$	381,872

The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The weighted average fair values of the options granted and weighted average assumptions are as follows:

	Nine months ended
	September 30,
	2013			2012

Weighted average fair value of options granted	$	1.89		$	2.37

Risk-free interest rate		0.76	%		0.65	%
Expected life (years)		5-7			5
Expected volatility factor		67.37	%		68.61	%
Expected dividends		-			-

A summary of restricted shares under the Company’s stock option plans as of September 30, 2013, and changes during the period then ended, are presented below:

	Number of Shares	Weighted-Average Grant Date Fair Value

Unvested at January 1, 2013	32,500	$	3.14
Granted	-		-
Vested	(7,500)		2.59
Forfeited/Expired	-		-
Unvested at September 30, 2013	25,000	$	3.31

The total compensation cost related to non-vested stock awards not yet recognized as of September 30, 2013 totaled approximately $2.0 million. The weighted-average period over which these costs will be recognized is twenty-five months.

The stock-based compensation expense related to the Company’s various stock awards was allocated as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012

Direct operating costs	$	76	$	25	$	205	$	70
Selling and administrative expenses		160		212		520		749
Total stock-based compensation	$	236	$	237	$	725	$	819

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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