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Employee Stock Compensation Plans
 12 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Employee Stock Compensation Plans

9. Employee Stock Compensation Plans:

 

On August 24, 2016, the holders of options to acquire Solitario common stock voluntarily surrendered for cancellation all options previously granted to such persons pursuant to the 2013 Solitario Exploration and Royalty Corp Omnibus Stock and Incentive Plan (the “2013 Plan”) and the 2006 Stock Option Incentive Plan (the “2006 Plan”). Solitario cancelled the options upon surrender. As a result, there are no outstanding options under either the 2006 Plan or the 2013 Plan as of December 31, 2016.

 

Historically, stock option awards at the time of grant had a five year term and vested 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. During the years ended December 31, 2016 and 2015, Solitario recorded $970,000 and $516,000, respectively, of stock option expense for the amortization of the grant date fair value through the date of cancellation and for any unrecognized grant date fair value on the date of cancellation of each of its outstanding options with a credit to additional paid-in-capital. Solitario classifies its stock options under the 2006 Plan and the 2013 Plan as equity options in accordance with the provisions of ASC 718, “Compensation – Stock Compensation.”

 

a.)     The 2006 Plan

 

On June 27, 2006, Solitario's shareholders approved the 2006 Plan. Under the terms of the 2006 Plan, the Board of Directors reserved a total of 2,800,000 shares of Solitario common stock for the potential awards to directors, officers and employees with exercise prices equal to the market price of Solitario's common stock at the date of grant. As of June 26, 2016, the 2006 Plan terminated, and in accordance with the terms of the 2006 Plan, no additional awards may be made pursuant to the 2006 Plan.

 

b.)     2006 Plan stock option grants

 

The following table shows the grant date fair value of Solitario’s only option grant during either 2016 or 2015 from the 2006 Plan as of the date of grant.

 

Grant date fair value

Grant Date 6/22/16
Option – grant date price (Cdn$) $0.72
Options granted 350,000
Expected life years 5.0
Expected volatility 63%
Risk free interest rate 1.0%
Weighted average fair value $0.30
Grant date fair value $105,000

 

e.)     2013 Plan stock option grants

 

The following table shows the grant date fair value of Solitario’s only award during either 2016 or 2015 from the 2013 Plan as of the date of grant.

 

Grant date fair value

Grant Date 7/28/16
Option – grant date price $0.72
Options granted 1,699,000
Expected life years 5.0
Expected volatility 63%
Risk free interest rate 0.9%
Weighted average fair value $0.50
Grant date fair value $850,000

 

 

c.)     2006 Plan stock option activity

 

During 2016 and 2015 there were no shares issued from the exercise of options. The following table summarizes the activity for stock options outstanding under the 2006 Plan as of December 31, 2016 and 2015:

 

  2016 2015
    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 40,000  $1.66    2,348,000  $1.66  
Granted 350,000  $0.72    -   -    
Exercised -   -     -   -    
Cancelled/expired (2) (390,000) $0.82    (2,188,000) 1.66  
Forfeited -   -     (120,000) 1.60  
Outstanding, end of year -   -   $   -    40,000  $1.60 $   -   
Exercisable, end of year -   -   $   -    20,000  $1.60 $   -   

 

(1)The intrinsic value at December 31, 2015 based upon the quoted market price of Cdn$0.70, respectively, per share for our common stock on the TSX and an exchange ratio of 0.72120, United States dollars per Canadian dollar. There were no options outstanding from the 2006 Plan at December 31, 2016.

(2)On August 24, 2016, holders of option awards from the 2006 Plan voluntarily cancelled awards for 350,000 options with an option price of Cdn$.072 with an expiration date of June 21, 2021 and 40,000 options with an option price of Cdn$1.66 with an expiration date of August 14, 2019 to allow Solitario to have additional financial flexibility. No consideration was given or received by the holders of the options to cancel the awards.

 

d.)     The 2013 Plan

 

On June 18, 2013, Solitario’s shareholders approved the 2013 Plan. Under the terms of the 2013 Plan, a total of 1,750,000 shares of Solitario common stock are reserved for awards 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 made no grants of awards during 2015 from the 2013 Plan. Options grants from the 2013 Plan 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 and for any unrecognized grant date fair value on the date of cancellation of each of its outstanding options.

 

f.)     Stock option activity

 

During 2016 and 2015 no options granted from the 2013 Plan were exercised. The following table summarizes the activity for stock options and RSUs outstanding under the 2013 Plan as of December 31, 2016 and 2015:

 

  2016 2015
    Weighted     Weighted  
    Average Aggregate   Average Aggregate
  RSUs/ Exercise Intrinsic RSUs/ Exercise Intrinsic
  Options Price Value(1) Options Price Value(1)
2013 Plan            
Outstanding, beginning of year -   -     1,400,000  $0.96   
Granted 1,699,000  $0.72    -   -    
Exercised -   -     -   -    
Cancelled/expired(2) (1,699,000) 0.94    (1,250,000) 0.94   
Forfeited -   1.10    (150,000) 1.10   
Outstanding, end of year -   -   $   -    -   -   $   -   
Exercisable, end of year -   -   $   -    -   -   $   -   

 

(1)There were no options outstanding from the 2013 Plan at December 31, 2016 and 2015.

(2) On August 24, 2016, holders of option awards from the 2013 Plan voluntarily cancelled awards for 1,699,000 options with an option price of $.072 with an expiration date of July 27, 2021 to allow Solitario to have additional financial flexibility. No consideration was given or received by the holders of the options to cancel the awards.