XML 60 R15.htm IDEA: XBRL DOCUMENT v2.4.1.9
Note 8. Stock Options and Restricted Stock Units
 12 Months Ended
Dec. 31, 2014
Notes to Financial Statements  
Stock Options and Restricted Stock Units

On May 23, 2014, the shareholder’s of the Company approved the 2014 Equity Incentive Plan (the “2014 Plan”).  Under the terms of the 2014 Plan, the Company is authorized to issue incentive awards for up to 200,000 shares of common stock to employees and other personnel.  The awards may be in the form of incentive stock options, nonqualified stock options, restricted stock, restricted stock units and performance awards.  The 2014 Plan is effective through March 31, 2024.  As of December 31, 2014, 40,000 awards had been issued under the 2014 Plan.

 

On August 9, 2010, the shareholders of the Company approved the 2010 Equity Incentive Plan (the “2010 Plan”).  Under the terms of the 2010 Plan, 150,000 shares of the Company’s common stock were authorized for the issuance of stock options and restricted stock.  The 2010 Plan also provides for an automatic annual increase in the number of authorized shares of common stock issuable beginning in fiscal 2011 equal to the lesser of (a) 2% of shares outstanding on the last day of the immediate preceding fiscal year, (b) 50,000 shares, or (c) such lesser number of shares as the Company’s board of directors shall determine, provided, however, in no event shall the maximum number of shares that may be issued under the Plan pursuant to stock awards be greater than 15% of the aggregate shares outstanding on the last day of the immediately preceding fiscal year.  With the automatic increases, there were 220,416 shares of common stock on January 1, 2012.  On January 20, 2012, the Company’s Board of Directors approved an increase in the number of shares authorized under the 2010 Plan from 220,416 to 420,416.This increase was ratified by the shareholders of the Company on June 29, 2012. On December 31, 2014, there were no shares remaining for awards to be issued under the 2010 Plan.

 

The following is a summary of stock options issued during the year ended December 31, 2014 and 2013:

 

    Number of Options Outstanding     Range of Exercise Price     Weighted Average Exercise Price     Aggregate Intrinsic Value  
Balance at December 31, 2012     220,596     $ 0.01 - $3.33     $ 2.09     $ 257,835  
    Options granted     140,000     $ 7.76 - $8.25     $ 7.90       -  
    Options exercised     (74,360 )   $ 0.01 - $3.33     $ 2.14       405,738  
    Options forfeited     (5,400 )   $ 0.01 - $3.33     $ 1.39       15,256  
Balance at December 31, 2013     280,836     $ 0.01 - $8.25     $ 4.97       1,340,684  
    Options granted     54,000     $ 9.26 - $13.49     $ 12.39       -  
    Options exercised     (76,665 )   $ 0.01 - $7.76     $ 2.23       646,266  
Balance at December 31, 2014     258,171     $ 0.01 - $13.49     $ 7.32       608,570  

 

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e. the aggregate difference between the closing price of our common stock on December 31, 2014 and 2013 of $8.96 and $9.74, respectively, and the exercise price for in-the-money options) that would have been received by the holders if all instruments had been exercised on December 31, 2014 and 2013. As of December 31, 2014, there was $1,103,988 of unrecognized compensation cost related to our unvested stock options, which will be recognized through 2018.

 

The following table summarizes information about stock options outstanding and exercisable at December 31, 2014:

 

      Options Outstanding   Options Exercisable  
Exercise Price     Number     Weighted Average Exercise Price    

Weighted Average Remaining Contractual Life

(in Years)

     Number  
$ 0.01 - $1.00       19,700     $ 0.01       7.05       19,700  
$ 1.01 - $2.00       4,550     $ 1.70       6.40       4,550  
$ 2.01 - $3.00       27,171     $ 2.57       3.90       12,171  
$ 3.01 - $4.00       14,000     $ 3.33       7.25       14,000  
$ 4.01 - $8.00       98,750     $ 7.76       6.31       30,001  
$ 8.00 - $9.00       40,000     $ 8.25       3.64       15,000  
$ 9.01 - $10.00       14,000     $ 9.26       9.99       -  
$ 10.01-$13.49       40,000     $ 13.49       4.19       7,500  
Total       258,171     $ 7.32       5.62       102,922  

 

Of the 258,171 stock options outstanding, 154,700 are non-qualified stock options.  Of the outstanding options, 244,171 issued under the 2010 Plan have been registered with the SEC, and 14,000 issued under the 2014 Plan have not yet been registered with the SEC.

 

The fair value of common stock options issued during the year ended December 31, 2014 and 2013 were estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used:

 

   

Year ended

 December 31,

2014

    

Year ended

 December 31,

2013

  
Expected dividend yield     0.33 %     1.16 %
Expected stock price volatility     161 %     125 %
Weighted-average risk-free interest rate     1.32 %     1.77 %
Weighted-average expected life of options (in years)     4.5       6.0  

 

During the year ended 2014, the Company also issued 26,000 shares of restricted stock units with an intrinsic value of $9.26 per share on the date of issuance and a three-year vesting period. These awards have not yet been registered with the SEC.  As of December 31, 2014, there was $237,245 of unrecognized compensation cost related to our unvested restricted stock units, which will be recognized through 2017.

 

During the year ended December 31, 2014 and 2013, we recorded expense of $360,865 and $144,002, respectively, related to stock options and restricted stock units.