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10. CAPITAL STOCK
 12 Months Ended
May 31, 2014
Capital Stock  
CAPITAL STOCK

10. CAPITAL STOCK:

 

STOCK OPTIONS:

 

    In October 1996, the Company’s Board of Directors approved the 1996 Stock Option Plan (the “Stock Plan”), which provided for granting of incentive and non-qualified stock options to our employees and directors.  The Stock Plan provides that qualified options be granted at an exercise price equal to the fair market value at the date of grant, as determined by the Board of Directors (85% of fair market value in the case of non-statutory options and purchase rights and 110% of fair market value in certain circumstances).  Options generally expire within five years from date of grant.  Most options become exercisable in increments over a four-year period from the date of grant.

 

    In October 2006, the Company’s 2006 Equity Incentive Plan and 2006 Employee Stock Purchase Plan (“2006 Plans”) were approved by the shareholders.  A total of 3,900,000 shares of common stock have been reserved for issuance under the Company’s 2006 Equity Incentive Plan.  Options granted under the 2006 Equity Incentive Plan are generally for periods not to exceed ten years (five years if the option is granted to a 10% stockholder) and are granted at the fair market value of the stock at the date of grant as determined by the Board of Directors.  The 2006 Plans respectively replace the Company’s Amended and Restated 1996 Stock Option Plan, which would otherwise have expired in 2006; and the Company’s 1997 Employee Stock Purchase Plan, which would have otherwise expired in 2007.  The Amended and Restated 1996 Stock Option Plan will continue to govern awards previously granted under that plan.

 

    As of May 31, 2014, out of the 4,147,000 shares authorized for grant under the 1996 Stock Option Plan and 2006 Equity Incentive Plan, approximately 3,002,000 shares were outstanding.

 

      The following table summarizes the Company’s stock option transactions during fiscal 2014, 2013 and 2012 (in thousands, except per share data):

 

        Outstanding Options  
            Weighted      
        Number   Average   Aggregate  
    Available   of   Exercise   Intrinsic  
    Shares   Shares   Price   Value  
Balances, May 31, 2011     687     2,083   $ 3.40   $ 298  
                           
Additional shares reserved     1,199     --              
Options granted     (1,141 )   1,141   $ 0.92        
Options terminated     258     (258 ) $ 3.72        
Plan shares expired     (164 )   --              
Options exercised     --     (9 ) $ 0.85        
                           
Balances, May 31, 2012     839     2,957   $ 2.40   $ 587  
                           
Additional shares reserved     1,223     --              
Options granted     (670 )   670   $ 1.13        
Options terminated     569     (569 ) $ 4.37        
Plan shares expired     (224 )   --              
Options exercised     --     (102 ) $ 0.67        
                           
Balances, May 31, 2013     1,737     2,956   $ 1.79   $ 964  
                           
Options granted     (908 )   908   $ 1.64        
Options terminated     420     (420 ) $ 5.51        
Plan shares expired     (104 )   --              
Options exercised     --     (442 ) $ 1.17        
                           
Balances, May 31, 2014     1,145     3,002   $ 1.31   $ 2,913  
                           
Options exercisable and expected to be                          
exercisable at May 31, 2014           2,942   $ 1.31   $ 2,855  


 

    The options outstanding and exercisable at May 31, 2014 were in the following exercise price ranges (in thousands, except per share data):

 

 

      Options Outstanding     Options Exercisable  
      at May 31, 2014     at May 31, 2014    
 

Range of Exercise

Prices

   Number Outstanding Shares   Weighted Average Remaining Contractual Life (Years)     Weighted Average Exercise Price  

Number Exercisable

Shares

     Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (Years)      Aggregate Intrinsic Value  
$ 0.59-$0.97   871   4.01   $ 0.73   702   $ 0.77   3.87        
$ 1.09-$1.42   1,432   4.87   $ 1.28   661   $ 1.28   4.26        
$ 1.73-$1.95   460   2.80   $ 1.88   384   $ 1.91   2.22        
$ 2.15-$2.68   239   5.32   $ 2.54   145   $ 1.33   4.44        
                                       
$ 0.59-$2.68   3,002   4.34   $ 1.31   1,892   $ 1.22   3.72   $ 1,835  

 

    The total intrinsic values of options exercised were $520,000, $43,000 and $6,000 during fiscal 2014, 2013 and 2012, respectively.  The weighted average contractual life of the options exercisable and expected to be exercisable at May 31, 2014 was 4.34 years.

 

    Options to purchase 1,892,000, 1,948,000 and 1,850,000 shares were exercisable at May 31, 2014, 2013 and 2012, respectively.  These exercisable options had weighted average exercise prices of $1.22, $2.12 and $3.13 as of May 31, 2014, 2013 and 2012, respectively.