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Stock-Based Compensation
 6 Months Ended
Jun. 30, 2015
Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]  
Stock-Based Compensation
E) Stock-Based Compensation. The following table presents stock-based employee compensation expenses included in our unaudited consolidated statements of comprehensive income (in thousands):
                           
    Three Months Ended
June 30,		   Six Months Ended
June 30,		  
    2015   2014   2015   2014  
                           
Cost of services   $ 12   $ 14   $ 13   $ 15  
Research and development     26     34     27     37  
Selling and marketing     4     6     5     6  
General and administrative     179     239     197     264  
Stock-based compensation expense   $ 221   $ 293   $ 242   $ 322  

 

Stock Option Grants. We may grant stock options under our 2001 Nonqualified Stock Plan although we have not granted any stock options since the first quarter of 2012. When we grant stock options, we estimate their fair value using the Black-Scholes valuation model. This valuation model takes into account the exercise price of the award, as well as a variety of significant assumptions. The assumptions used to estimate the fair value of stock options include the expected term, the expected volatility of our stock over the expected term, the risk-free interest rate over the expected term, and our expected annual dividend yield. We believe that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of our stock options. Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards.

 

Unrestricted Stock Grants. We also grant unrestricted shares of stock under our 2001 Nonqualified Stock Plan. Stock-based compensation expense for stock grants is determined based on the fair market value of our stock on the date of grant, provided the number of shares in the grant is fixed on the grant date.

 

We granted shares of unrestricted stock in 2015 and 2014 that affected financial results for the three and six month periods ended June 30, 2015 and 2014. These grants are described below.

 

2015 Grant. On March 26, 2015, we granted 152,000 shares of unrestricted stock to directors, officers and employees. Half of those shares were issued on July 1, 2015 and the remaining 76,000 shares will be issued shortly after December 31, 2015, provided each grantee is serving as a director, officer or employee on that date. The total stock-based compensation expense related to this grant is $682,000, of which $221,000 and $236,000 was charged to expense in the three and six months ended June 30, 2015, respectively. We anticipate the remaining $446,000 will be charged to expense ratably over the remaining two quarters of 2015.

 

2014 Grant. In March 2014, we granted 152,000 shares of unrestricted stock to directors, officers and employees. The shares were issued in two equal installments shortly after June 30, 2014 and December 31, 2014. We expensed the entire $876,000 stock-based compensation expense related to this grant in 2014. We issued shares of common stock related to this grant as follows: i) 58,769 net shares of common stock were issued in early July 2014 after employees surrendered 17,231 shares for which we paid $113,000 of withholding taxes on their behalf; and ii) 56,804 net shares of common stock were issued in early January 2015 after employees surrendered 19,196 shares for which we paid $87,000 of withholding taxes on their behalf.