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Employee Stock Compensation Plans

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Employee Stock Compensation Plans

9. Employee Stock Compensation Plans:

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 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. The 2006 Plan terminated on June 26, 2016 and in accordance with the terms of the 2006 Plan, no additional awards may be made pursuant to the 2006 Plan. There are no outstanding options under the 2006 Plan as of December 31, 2017 or 2016.

a.) 2006 Plan stock option grants

The following table shows the grant date fair value of Solitario’s only option grant during 2016 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

b.) 2006 Plan stock option activity

During 2017 and 2016 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:

	2016
		Weighted
		Average	Aggregate
		Exercise	Intrinsic
	Options	Price (Cdn$)	Value(1)
2006 Plan
Outstanding, beginning of year	40,000	$1.66
Granted	350,000	$0.72
Exercised	-	-
Cancelled/expired (2)	(390,000)	$0.82
Forfeited	-	-
Outstanding, end of year	-	-	$ -
Exercisable, end of year	-	-	$ -

(1) There were no options outstanding from the 2006 Plan at December 31, 2017 and 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. No consideration was given or received by the holders of the options to cancel the awards.

During the years ended December 31, 2016, Solitario recorded $120,000, of stock option expense under the 2006 Plan 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.

The 2013 Plan

On June 18, 2013, Solitario’s shareholders approved the Solitario Resources Corporation Omnibus Stock Incentive Plan (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. On June 29, 2017, Solitario shareholders approved an amendment to the 2013 Plan, which increased the number of shares of common stock available for issuance under the 2013 Plan from 1,750,000 to 5,750,000. Awards granted under the 2013 Plan 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.

a.) 2013 Plan stock option grants

The following table shows the grant date fair value of Solitario’s awards during 2017 and 2016 pursuant to the 2013 Plan as of the date of grant.

Grant date fair value

Grant Date	7/28/16 (2)(3)	7/12/17 (1)	7/12/17 (1)	7/12/17 (1)	7/12/17 (1)	9/01/17 (2)
Option – grant date price	$0.72	$1.74	$1.52	$1.30	$0.54	$0.77
Options granted	1,699,000	357,200	425,068	785,840	214,320	200,000
Expected life years	5.0	0.84	1.35	1.50	1.50	5.0
Expected volatility	63%	67%	67%	67%	67%	64%
Risk free interest rate	0.9%	1.0%	1.0%	1.0%	1.0%	1.7%
Weighted average fair value	$0.50	$0.02	$0.08	$0.12	$0.36	$0.42
Grant date fair value	$850,000	$7,000	$26,000	$72,000	$59,000	$126,000

(1)

Replacement options, discussed above in Note 1 under “Recent Developments.” Options had terms of May, 15, 2018, November 15, 2018, January 12, 2019 and January 12, 2019. The Replacement Options were fully vested on the date of grant. Replacement Options were priced in Canadian Dollars, the grant day prices reflect the US Dollar price exchange rate of .07749 Cdn$/US$ on the date of grant.

(2)

Options grants have a five-year term, and vest 25% on date of grant and 25% on each of the next three anniversary dates.

(3)

Options were cancelled on August 24, 2016, as discussed below.

b.) Stock option activity

During 2017 and 2016 no options granted from the 2013 Plan were exercised. The following table summarizes the activity for stock options outstanding under the 2013 Plan as of December 31, 2017 and 2016:

	2017			2016
		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	-	-		-	-
Granted	1,982,428	$1.29		1,699,000	$0.72
Exercised	-	-		-	-
Cancelled/expired (2)	-	-		(1,699,000)	0.94
Forfeited	-	-		-	-
Outstanding, end of year	1,982,428	$1.29	$9,000	-	-	$ -
Exercisable, end of year	1,832,428	$1.33	$9,000	-	-	$ -

(1)Intrinsic value based upon December 31, 2017 price of a share of Solitario common stock as quoted on the NYSE American exchange of $0.60 per share, with an exchange ratio (for Canadian priced options) of 0.79659 Cdn$/US$. There were no options outstanding at December 31, 2016.

(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.

During the years ended December 31, 2017 and 2016, Solitario recorded $50,000 and $850,000, respectively, of stock option expense under the 2013 Plan 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.

On September 1, 2017, the Board of Directors granted, subject to shareholder approval at the next meeting of shareholders, an additional 2,300,000 stock options under the 2013 Plan to officers and members of the Board of Directors. These options have a five-year life, and exercise price of $0.77 per share, and a grant date fair value of $970,000, based upon a Black-Scholes model with a volatility of 64%, and a risk free interest rate of 1.70%. Although the options will vest on the schedule of 25% on date of grant and 25% on each of the next three anniversary dates of the date of grant, the options will not become exercisable in whole or in part unless Solitario shareholders approve the grants, and the option grants will be void if Solitario shareholders do not approve the grants. Solitario will not record any stock option expense related to these options until the shareholder approval is received.