Note 9 – Stock Compensation Plans

In June 2009, our stockholders approved and in June 2014 our stockholders reapproved the VASCO Data Security International, Inc. 2009 Equity Incentive Plan (the “2009 Equity Plan”). The 2009 Equity Plan permits the issuance of awards in a variety of forms, including (1) shares of our common stock, (2) nonqualified and incentive stock options for the purchase of our common stock, (3) stock appreciation rights, (4) deferred stock, (5) other stock-based awards (including restricted shares, performance shares, performance units and other stock unit awards), and (6) cash incentive awards.

Upon approval of the 2009 Equity Plan, our 1997 Stock Compensation Plan, as amended and restated (the “1997 Compensation Plan”) was suspended. No additional awards will be issued under the 1997 Compensation Plan, however, all outstanding awards under the 1997 Compensation Plan were unaffected by the approval of the 2009 Equity Plan. The 1997 Compensation Plan permitted the award of stock compensation in various forms.

The 2009 Equity Plan and the 1997 Compensation Plan were designed and intended to provide performance incentives to employees and non-employee directors, consultants and other key persons of the company. Both plans are administered by the Compensation Committee as appointed by the Board of Directors and are intended to be non-qualified plans.

As of December 31, 2015, the number of shares allowed to be issued under the 2009 Equity Plan was 6,149 shares of the company’s common stock, representing 15.3% of the issued and outstanding shares of the company as of such date.

The following table summarizes compensation expense recorded under the two plans.


	2015		2014		2013
Restricted stock	$	3,835	$	2,399	$	2,472
Long-term Cash Incentives		1,815		851		115

Total expense	$	5,650	$	3,250	$	2,587

Stock Options

We have not granted stock options since 2005. There is no stock option expense for the three years ended December 31, 2015, and no stock option activity for the year ended December 31, 2015. There were no options outstanding at December 31, 2015 or 2014.

Time-Based Restricted Stock

Time-based restricted stock awards granted to non-employee directors in 2015 vest on the first anniversary date of the grant. Awards granted to an executive officer in 2015 vest in equal semi-annual installments over four years. Awards granted to employees in 2015 vest in 3 to 4 years. Shares are subject to forfeiture if the service period requirement is not met. Compensation expense equal to the market value of the stock on the grant date is recorded on a straight-line basis over the vesting period as required by ASC 718 Compensation-Stock Compensation. Compensation expense was $1,356, $1,316, and $1,871 for 2015, 2014, and 2013, respectively. The following table summarizes the time-based restricted stock activity for the year ended December 31, 2015:


	Shares			Weighted average remaining term (years)		Aggregate intrinsic value
Outstanding at January 1, 2015		240			1.53	$	6,771
Shares vested		(157	)			$	4,075
Shares awarded and issued		331				$	6,570

Outstanding at December 31, 2015		414			2.56	$	6,926

The unamortized future compensation expense for time-based restricted stock awards was $5,930 at December 31, 2015.

Performance-Based Restricted Stock

Performance-based restricted stock awards granted to executive officers in 2015 were subject to achievement of one-year and three year performance targets established by the Board of Directors. Earned shares related to one-year performance targets vest annually over four years. Earned shares related to three-year targets vest upon completion of the three-year period. Shares are subject to forfeiture if the service period requirement is not met.

The number of shares to be earned from awards granted in 2015 was 110. The number of shares earned in 2014 was 152. No shares were earned in 2013. Compensation expense, equal to the market value of the stock on the grant date, is recorded on a straight-line basis over the vesting period at the performance level deemed probable, as required by ASC 718. Compensation expense in 2015, 2014, and 2013 was $2,479, $1,083, and $600. Unamortized future compensation expense for performance-based restricted stock was $3,864 at December 31, 2015.

The following table summarizes activity related to unvested performance restricted stock shares during 2015:


	Total Unvested Shares			Weighted average remaining term (years)		Aggregate intrinsic value
Outstanding at January 1, 2015		316			2.11	$	8,927
Shares vested		(100	)			$	2,479
Shares awarded		150				$	4,689

Outstanding at December 31, 2015		366			1.64	$	6,123

At December 31, 2015, total unvested shares consists of 114 earned shares and 252 unearned shares.