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Employee Stock Compensation Plans
 12 Months Ended
Dec. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Employee Stock Compensation Plans

10. Employee stock compensation plans:

 

a.)     The 2006 Plan

 

On June 27, 2006, Solitario's shareholders approved the 2006 Stock Option Incentive Plan (the "2006 Plan"). Under the terms of the 2006 Plan, the Board of Directors may grant up to 2,800,000 options to Directors, officers and employees with exercise prices equal to the market price of Solitario's common stock at the date of grant. Solitario classifies its stock options under the 2006 Plan as equity options in accordance with the provisions of ASC 718 “Compensation – Stock Compensation.”

 

b.)     2006 Plan stock option compensation

 

Solitario’s outstanding options from the 2006 Plan on the date of grant have a five-year term, and vest 25% on date of grant and 25% on each of the next three anniversary dates. Solitario recognizes stock option compensation expense on the date of grant for 25% of the grant date fair value, and subsequently, based upon a straight line amortization of the unvested grant date fair value of each of its outstanding options. The following table shows the grant date fair value of Solitario’s options grants from the 2006 Plan as of the date of grant.

 

Grant date fair value

Grant Date 12/17/12 5/5/10 5/19/09
Option – grant date price (Cdn$) $1.49 $2.40 $1.55
Options granted 165,000 2,065,000 519,000
Expected life yrs. 5.0 5.0 5.0
Expected volatility 68% 56% 56%
Risk free interest rate 0.7% 2.2% 1.9%
Weighted average fair value $0.84 $1.19 $0.65
Grant date fair value $139,000 $2,449,000 $339,000

 

Solitario recorded $189,000 and $732,000, respectively, of stock option expense from the 2006 Plan during 2013 and 2012 included in general and administrative expense, for the amortization of grant date fair value with a credit to additional paid-in capital.

 

c.)     2006 Plan Stock option activity

 

During the year ended December 31, 2013, options for 117,500 shares were exercised for cash proceeds of $184,000. During 2012 there were no shares exercised from the 2006 Plan. The following table summarizes the activity for stock options outstanding under the 2006 Plan as of December 31, 2013 and2012:

 

  2013 2012
    Weighted     Weighted  
    Average Aggregate   Average Aggregate
    Exercise Intrinsic   Exercise intrinsic
  Options Price (Cdn$) value(1) Options Price (Cdn)$ Value(1)
2006 Plan            
Outstanding, beginning of year 2,598,400  $2.22   2,433,400 $2.27  
Granted -   -     165,000 $1.49  
Exercised (117,500) 1.55   -   -    
Cancelled -   -     -   -    
Forfeited (61,900) 2.40   -   -    
Outstanding, end of year 2,419,000  $2.25 $   -    2,598,400 $2.22 $1,650
Exercisable, end of year 2,336,500  $2.27 $   -    1,958,400 $2.22 $   413

 

(1)The intrinsic value at December 31, 2013 and 2012 based upon the quoted market price of Cdn$0.87 and Cdn$1.50, respectively, per share for our common stock on the TSX and an exchange ratio of 0.93485 and 1.0031, respectively, United States dollars per Canadian dollar.

 

a.)     The 2013 Plan

 

On June 18, 2013 Solitario’s shareholders approved the 2013 Solitario Exploration and Royalty Corp. Omnibus Stock and Incentive Plan (the “2013 Plan”). Under the terms of the 2013 Plan, the Board of Directors may grant awards for up to 1,750,000 shares to Directors, officers, employees and consultants. Such awards may take the form of stock options, stock appreciation rights, restricted stock, and restricted stock units. The terms and conditions of the awards are pursuant to the 2013 Plan and are granted by the Board of Directors or a committee appointed by the Board of Directors. Solitario classifies its awards from the 2013 Plan as equity awards under the provisions of ASC 718 “Compensation – Stock Compensation.”

 

b.)     Stock option compensation

 

Solitario’s made two grants of options during 2013 from the 2013 Plan which on the date of grant have a five-year term, and vest 25% on date of grant and 25% on each of the next three anniversary dates. Solitario recognizes stock option compensation expense on the date of grant for 25% of the grant date fair value, and subsequently, based upon a straight line amortization of the unvested grant date fair value of each of its outstanding options. The following table shows the grant date fair value of Solitario’s options grants from the 2013 Plan as of the date of grant.

 

Grant date fair value

Grant Date 6/18/13 10/21/13
Option – grant date price $1.14 $0.94
Options outstanding 120,000 1,280,000
Expected life yrs. 5.0 5.0
Expected volatility 68% 67%
Risk free interest rate 1.24% 1.39%
Weighted average fair value $0.65 $0.53
Grant date fair value $78,000 $674,000

 

Solitario recorded $231,000 of stock option expense from the 2013 Plan during 2013included in general and administrative expense, for the amortization of grant date fair value with a credit to additional paid-in capital.

 

c.)     Stock option activity

 

The following table summarizes the activity for stock options outstanding under the 2013 Plan as of December 31, 2013:

 

  2013
    Weighted  
    Average Aggregate
    Exercise Intrinsic
  Options Price value(1)
20013 Plan      
Outstanding, beginning of year -   -    
Granted 1,400,000  0.96   
Exercised -   -    
Cancelled -   -    
Forfeited -   -    
Outstanding, end of year 1,400,000  $0.96 $   -   
Exercisable, end of year 350,000  $0.96 $   -   

 

(1)The intrinsic value at December 31, 2013 based upon the quoted market price of $0.85, per share for our common stock on the NYSE-MKT.