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Stock-Based Compensation Plan | 9 Months Ended
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Sep. 30, 2013
Stock-Based Compensation Plan [Abstract] |
Stock-Based Compensation Plan | NOTE 12. STOCK-BASED COMPENSATION PLAN Under the Company’s 2005 Stock Incentive Plan (the “2005 Plan”), the Board of Directors has flexibility to determine the type and amount of awards to be granted to eligible participants, who must be employees, directors, officers or consultants of the Company or its subsidiaries. The 2005 Plan allows for grants of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and restricted units. The aggregate number of shares of common stock that may be granted through awards under the 2005 Plan to any employee in any calendar year may not exceed 500 shares. The 2005 Plan will continue in effect until June 2015 unless terminated sooner. During the nine months ended September 30, 2013, the Company issued 560 stock options under the Company’s 2005 Plan to employees of the Company. Of the 560 options issued, 40 will vest in four equal consecutive quarterly tranches from the date of grant. 35 options granted will vest in three installments as follows: 14 shall vest on December 31, 2014 and the remaining shares shall vest equally on December 31, 2015 and December 31, 2016. 5 options granted will vest in three installments as follows: 2 shall vest on March 31, 2015 and the remaining shares shall vest equally on March 31, 2016 and March 31, 2017. 40 options granted will vest in three installments as follows: 16 shall vest on December 31, 2015 and the remaining shares shall vest equally on December 31, 2016 and December 31, 2017. The remaining 440 vested immediately. For computing the fair value of the stock-based awards, the fair value of each option grant has been estimated as of the date of grant using the Black-Scholes option-pricing model with the following assumptions:
Options Granted During the Nine Months Ended September 30, 2013 |  |  |  |
Number of options |  | 120 |  | 440
Option vesting period |  | 1- 5 Years |  | Immediate
Grant price |  | $8.02 - $10.20 |  | $10.40
Dividend yield |  | 0.00% |  | 0.00%
Expected volatility (a) |  | 52.8% - 55.2% |  | 53.9%
Risk-free interest rate |  | 1.04% - 1.98% |  | 1.62%
Expected life (years) |  | 5.31 - 6.95 (b) |  | 5.00 (c)
Discount for post-vesting restrictions (d) |  | 0.0% |  | 16.0% - 35.0%
Weighted average fair value |  | $4.23 - $5.38 |  | $1.59 - $3.64
(a) | Since the Company’s historical volatility was not representative of the ongoing future business, the Company’s historical volatility was based on a combination of the Company’s volatility and the historical volatility of a peer group of companies within similar industries and similar size as the Company.
(b) | Because the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for these grants, the Company utilized the simplified method in developing an estimate of the expected term of these options.
(c) | The Company considered the applicable employee groups as well as the anticipated exercise behavior over the contractual term of the award in developing an estimate of the expected term of these options.
(d) | Because options with post-vesting restrictions create a lack of marketability, the Company discounted the market price used in the Black-Scholes option-pricing model. The Company utilized the Finnerty model to calculate the discount.
Using these assumptions, the fair value of all stock options granted during the nine months ended September 30, 2013 was $1,906, which will be recognized over the vesting period of the options. The fair value attributable to the 440 stock options immediately vested was $1,357. During the nine months ended September 30, 2013, the Company awarded 3 shares of common stock to an employee. At the date the awards were issued the common stock was valued at $7.85 per share. During the nine months ended September 30, 2013, the Company awarded 90 shares of restricted stock to employees. The vesting of 72 shares is contingent on meeting various service conditions and sales targets, which were deemed probable. The remaining 18 shares vest in two to five years assuming the employees remain employed through the vesting date. The fair value of the restricted stock shares granted during the nine months ended September 30, 2013 was $936, which is equal to the market value of the underlying shares on the date of grant. The fair value will be recognized over the vesting period of two to five years. The total non-cash stock compensation expense related to restricted stock, stock options, and stock awards recorded by the Company during the three and nine months ended September 30, 2013 and 2012, respectively, was as follows:
|  | Three Months Ended
|  | September 30, 2013 |  | September 30, 2012
Restricted stock |  | $ | 20 |  | $ | 208
Stock options |  |  | 1,699 |  |  | 318
Total |  | $ | 1,719 |  | $ | 526
|  | Nine Months Ended
|  | September 30, 2013 |  | September 30, 2012
Restricted stock |  | $ | 20 |  | $ | 617
Stock options |  |  | 2,316 |  |  | 697
Stock awards |  |  | 25 |  |  | -
Total |  | $ | 2,361 |  | $ | 1,314
The fair value of unvested restricted stock awards is determined based on the market price of our shares of common stock on the grant date. As of September 30, 2013, there were 1,184 unvested stock options and unrecognized compensation cost of $3,034 related to unvested stock options, as well as 590 unvested restricted stock awards and unrecognized compensation cost of $916 related to unvested restricted stock awards.

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- Definition Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate. + 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 Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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