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Note 10 - Options | 12 Months Ended
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Dec. 31, 2013
Notes |
Note 10 - Options | Note 10 – Options The Company has stock option plans which authorize the grant of stock options to eligible employees, directors and other individuals to purchase up to an aggregate of 190,978 shares of common stock, of which 90,978 are outstanding as of December 31, 2013. All options granted under the plans are granted at current market value at the date of grant, and may be exercised between six months and ten years following the date of grant. The plans are intended to advance the interest of the Company by attracting and ensuring retention of competent directors, employees and executive personnel, and to provide incentives to those individuals to devote their utmost efforts to the advancement of shareholder value. Changes in stock options were as follows:
|  | Shares |  | Price Range Per Share
2013 |  |  |  |  |  |  |  |
Granted |  | 0 |  | $ | - - - |
Expired or canceled |  | 3,262 |  |  | 17.71 - 33.30 |
Exercised |  | 55,287 |  |  | 17.71 - 33.30 |
Total outstanding at December 31 |  | 90,978 |  |  | 18.00 - 33.30 |
Total exercisable at December 31 |  | 76,948 |  |  | 18.00 - 33.30 |
2012 |  |  |  |  |  |  |  |
Granted |  | 13,000 |  | $ | 33.30 - 33.30 |
Expired or canceled |  | 19,393 |  |  | 24.00 - 28.13 |
Exercised |  | 82,386 |  |  | 15.01 - 31.33 |
Total outstanding at December 31 |  | 149,527 |  |  | 17.71 - 33.30 |
Total exercisable at December 31 |  | 120,420 |  |  | 17.71 - 31.33 |
2011 |  |  |  |  |  |  |  |
Granted |  | 67,200 |  | $ | 26.52 - 26.75 |
Expired or canceled |  | 24,612 |  |  | 24.00 - 31.33 |
Exercised |  | 21,220 |  |  | 9.13 - 25.59 |
Total outstanding at December 31 |  | 238,306 |  |  | 15.01 - 31.33 |
Total exercisable at December 31 |  | 172,027 |  |  | 15.01 - 31.33 |
For the years ended December 31, 2013, 2012 and 2011, the Company reduced current income taxes payable and increased additional paid-in capital by $281, $178 and $34, respectively, for the income tax benefit attributable to sale by optionees of common stock received upon the exercise of stock options. Stock-Based Compensation In 2013, the Company recognized $28 in equity compensation cost, compared to $70 in 2012 and $95 in 2011. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:
|  | Years ended December 31,
|  | 2013 |  |  | 2012 |  |  | 2011
Expected dividend amount per quarter | $ | n/a |  | $ | 0.2571 |  | $ | 0.2449
Expected stock price volatility |  |  |  |  | 22.8% |  |  | 22.8%
Risk-free interest rate |  |  |  |  | 0.54% |  |  | 1.19%
Expected life of options |  |  |  |  | 3.8 years |  |  | 3.6 years
The per share weighted average fair value of options granted during 2012 and 2011, is $3.92 and $3.09 respectively. No options were granted in 2013. All UTMD options vest over a four-year service period. Expected dividend amounts were estimated based on the actual cash dividend rate at the time the options were granted and an estimate of future dividends based on past dividend rate changes as well as management’s expectations of future dividend rates over the expected holding period of the options. Expected volatility is based on UTMD’s historical volatility over recent periods of time and trends in that volatility, giving weight to more recent periods. Risk free interest rates were estimated based on actual U.S. Treasury Securities Interest rates as reported by the Federal Reserve Bank for periods of time equivalent to the holding periods estimated for the options on the dates the options were granted. Expected term of options were estimated based on historical holding periods for similar options previously granted by UTMD to employees and directors. The following table summarizes information about stock options outstanding at December 31, 2013:
|  |  |  |  | Options Outstanding |  |  | Options Exercisable
|  | Range of Exercise Prices |  |  | Number Outstanding |  | Weighted Average Remaining Contractual Life (Years) |  |  | Weighted Average Exercise Price |  |  | Number Exercisable |  |  | Weighted Average Exercise Price
1 | $ | 18.00 | - | 24.00 |  |  | 30,535 |  | 4.33 |  | $ | 23.23 |  |  | 30,535 |  | $ | 23.23
2 |  | 25.59 | - | 25.59 |  |  | 4,199 |  | 0.08 |  |  | 25.59 |  |  | 4,199 |  |  | 25.59
3 |  | 26.52 | - | 33.30 |  |  | 56,244 |  | 5.58 |  |  | 29.78 |  |  | 42,214 |  |  | 29.46
4 | $ | 18.00 | - | 33.30 |  |  | 90,978 |  | 4.91 |  | $ | 27.39 |  |  | 76,948 |  | $ | 26.78

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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