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Stock-Based Compensation
9 Months Ended
Sep. 30, 2018
Stock-Based Compensation [Abstract]  
Stock-Based Compensation

Note 12 – Stock-Based Compensation

 

On January 12, 2018, the Company granted non-qualified stock options to purchase 146,590 shares of our common stock to executives of the Company.  The award features a performance earning vesting schedule whereby the stock options will vest if the average closing price per share of the Company’s stock over the trailing 90 calendar days (the “Threshold Stock Price”) exceeds the closing price per share of the Company’s stock on January 12, 2018 (the “Reference Stock Price”) as follows: 34% of the stock options will vest if the Threshold Stock Price exceeds the Reference Stock Price by $5.00; another 33% of the stock options will vest if the Threshold Stock Price exceeds the Reference Stock Price by $10.00; and the remaining 33% of the stock options will vest if the Threshold Stock Price exceeds the Reference Stock Price by $15.00. Such stock price appreciation goals can be achieved at any point during the options’ ten-year contractual term. When vesting of an award of stock-based compensation is dependent upon the attainment of a target stock price, the award is considered to be subject to a market condition.  The Company recognizes stock-based compensation cost for stock options with market conditions over the derived service period of the stock options.  The estimated fair value and derived service period for the stock options were calculated using a Monte Carlo simulation. Assumptions used in valuing the January 12, 2018 stock options include the expected stock option life, expected volatility, expected dividend yield and risk-free rate.  The stock options were assumed to have an expected life equal to the midpoint of (a) the date the performance goal is attained and (b) the date the stock options expire. The expected volatility assumption of 49.33% was based on the Company’s historical stock price volatility over the ten-year period ended on the grant date.  The expected dividend yield assumption of 0% was based on the Company’s suspension of its quarterly dividend payment in November 2017.  The risk-free rate assumption of 2.55% was based on the yields on U.S. Treasury STRIPS with a remaining term that approximates the life assumed at the date of the grant.  The estimated fair value of the three vesting tranches for the stock options ranged from $8.51 to $9.12 with derived service periods from 1.0 year to 2.43 years. 



Total stock-based compensation was $760 and $195 for the three months ended September 30, 2018 and 2017, respectively and $2,511 and $566 for the nine months ended September 30, 2018 and 2017, respectively.  As of September 30, 2018, there was $1,245 of unearned compensation expense related to restricted stock awards, which will be recognized over the remaining weighed average service period of 22 months. As of September 30, 2018, there was $1,390 of unearned compensation related to performance stock options, which will be recognized over the remaining weighted average derived service period of 13 months. As of September 30, 2018, there was $499 of unearned compensation related to time-vested stock options, which will be recognized over the remaining service period of 27 months.