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Stock-Based Incentive Plan
 3 Months Ended
Sep. 30, 2012
Stock-Based Incentive Plan  
Stock-Based Incentive Plan

Note 6 — Stock-Based Incentive Plan

 

We may grant option awards to purchase common stock (the “Stock Options”), restricted common stock awards (“Restricted Stock”), and unrestricted fully vested common stock, to employees, directors, and consultants of the Company and its subsidiaries under the Natural Gas Systems Inc. 2003 Stock Plan (the “2003 Stock Plan”) and the Evolution Petroleum Corporation Amended and Restated 2004 Stock Plan (the “2004 Stock Plan” or together, the “EPM Stock Plans”).  Option awards for the purchase of 600,000 shares of common stock were issued under the 2003 Stock Plan.  The 2004 Stock Plan authorized the issuance of 6,500,000 shares of common stock.  No shares are available for grant under the 2003 Stock Plan and 857,884 shares remain available for grant under the 2004 Stock Plan as of October 31, 2012.

 

We have also granted common stock warrants, as authorized by the Board of Directors, to employees in lieu of cash bonuses or as incentive awards to reward previous service or provide incentives to individuals to acquire a proprietary interest in the Company’s success and to remain in the service of the Company (the “Incentive Warrants”).  These Incentive Warrants have similar characteristics of the Stock Options.  A total of 1,037,500 Incentive Warrants have been issued, with Board of Directors approval, outside of the EPM Stock Plans.  We have not issued Incentive Warrants since the listing of our shares on the NYSE MKT (formerly, the American Stock Exchange) in July 2006.

 

Stock Options and Incentive Warrants

 

Non-cash stock-based compensation expense related to Stock Options and Incentive Warrants for the three months ended September 30, 2012 and 2011 was $26,274 and $172,729, respectively.

 

There were no Stock Options granted during the three months ended September 30, 2012 and 2011.

 

The following summary presents information regarding outstanding Stock Options and Incentive Warrants as of September 30, 2012, and the changes during the fiscal year:

 

 

 

Number of Stock
Options
and Incentive
Warrants

 

Weighted Average
Exercise Price

 

Aggregate
Intrinsic Value
(1)

 

Weighted
Average
Remaining
Contractual
Term (in
years)

 

 

 

 

 

 

 

 

 

 

 

Stock Options and Incentive Warrants outstanding at July 1, 2012

 

5,372,820

 

$

1.83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Granted

 

—

 

—

 

 

 

 

 

Exercised

 

(30,000

)

$

4.10

 

 

 

 

 

Cancelled or forfeited

 

—

 

—

 

 

 

 

 

Expired

 

—

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock Options and Incentive Warrants outstanding at September 30, 2012

 

5,342,820

 

$

1.82

 

$

33,440,689

 

3.2

 

 

 

 

 

 

 

 

 

 

 

Vested or expected to vest at September 30, 2012

 

5,342,820

 

$

1.82

 

$

33,440,689

 

3.2

 

 

 

 

 

 

 

 

 

 

 

Exercisable at September 30, 2012

 

5,342,820

 

$

1.82

 

$

33,440,689

 

3.2

 

 

 

(1) Based upon the difference between the market price of our common stock on the last trading date of the period ($8.08 as of September 30, 2012) and the Stock Option or Incentive Warrant exercise price of in-the-money Stock Options and Incentive Warrants.

 

There were 30,000 Stock Options exercised during the three months ended September 30, 2012 with an aggregate intrinsic value of $131,700.

 

A summary of the status of our unvested Stock Options and Incentive Warrants as of September 30, 2012 and the changes during the three months ended September 30, 2012, is presented below:

 

 

 

Number of
Stock
Options
and Incentive
Warrants

 

Weighted
Average Grant-
Date Fair Value

 

 

 

 

 

 

 

Unvested at July 1, 2012

 

18,922

 

$

2.45

 

 

 

 

 

 

 

Granted

 

—

 

—

 

 

 

 

 

 

 

Vested

 

(18,922

)

$

2.45

 

 

 

 

 

 

 

Forfeited

 

—

 

—

 

 

 

 

 

 

 

Unvested at September 30, 2012

 

—

 

$

—

 

 

During the three months ended September 30, 2012 and 2011, there were 18,922 and 86,083 Stock Options and Incentive Warrants that vested with a total grant date fair value of $46,359 and $162,697, respectively.

 

As of August 31, 2012 all compensation costs attributable to Stock Options and Incentive Warrants had been recognized.

 

Restricted Stock

 

Stock-based compensation expense related to Restricted Stock grants for the three months ended September 30, 2012 and 2011 was $327,516 and $249,966, respectively.

 

The following table sets forth the Restricted Stock transactions for the three months ended September 30, 2012:

 

 

 

Number of
Restricted
Shares

 

Weighted
Average
Grant-Date
Fair Value

 

 

 

 

 

 

 

Unvested at July 1, 2012

 

452,600

 

$

5.60

 

 

 

 

 

 

 

Granted

 

154,227

 

$

7.93

 

 

 

 

 

 

 

Vested

 

(55,321

)

$

4.41

 

 

 

 

 

 

 

Forfeited

 

—

 

—

 

 

 

 

 

 

 

Unvested at September 30, 2012

 

551,506

 

$

6.01

 

 

For the 154,227 shares awarded above, the grant date fair value reflects the stock’s closing price on the first trading day before the grant date.  See Note 5.   At September 30, 2012, unrecognized stock compensation expense related to Restricted Stock grants totaled $3,014,246.  Such unrecognized expense will be recognized over a weighted average period of 2.9 years.