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Share-Based Payments | 12 Months Ended
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Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Share-Based Payments | 9. Share-Based Payments Employee Stock Option Plans The Company’s share-based incentive plans offering stock options primarily consists of two plans. Under both plans, one new share is issued for each stock option exercised. The plans are described below. The Company’s 1998 Incentive Plan (the “1998 Plan”) was the Company’s primary plan through November 2007. Under this plan shares of common stock was made available for issuance to employees and directors. Through December 1999, 1,066,000 options were granted that would cliff vest after 9.8 years; however, such vesting was accelerated for 637,089 of these options upon meeting certain earnings per share goals through the fiscal year ended June 30, 2003. Subsequent to December 1999 and through June 2002, 1,248,250 options were granted that would cliff vest after 6.0 years; however, such vesting was accelerated for 300,494 of these options upon meeting certain earnings per share goals through the fiscal year ended June 30, 2005. The Company’s 2007 Equity Incentive Plan (the “2007 Plan”) was restated and approved by the shareholders on December 12, 2015. Provisions of the restated 2007 Plan include the granting of up to 2,000,000 incentive and non-qualified stock options, stock appreciation rights, restricted stock and restricted stock units. Options may be granted to employees, officers, non-employee directors and other service providers and may be granted upon such terms as the Compensation Committee of the Board of Directors determines in their sole discretion. Of the options granted subsequent to June 2002, all vesting schedules are based on 3 or 4-year vesting schedules, with either one-third or one-fourth vesting on the first anniversary and the remaining options vesting ratably over the remainder of the vesting term. Generally, directors and officers have 3-year vesting schedules and all other employees have 4-year vesting schedules. Additionally, in the event of a change in control or the occurrence of a corporate transaction, the Company’s Board of Directors has the authority to elect that all unvested options shall vest and become exercisable immediately prior to the event or closing of the transaction. All options outstanding as of December 31, 2016 had contractual lives of ten years. Under the 1998 Plan, 2,500,000 shares were authorized for grant. As of December 31, 2016, there were 150,000 options outstanding under the 1998 Plan, which includes the cliff vesting and 3 or 4-year vesting options discussed above. As of December 31, 2016, there were 700,232 options outstanding under the 2007 Plan. As of December 31, 2016, the 2007 Plan had 826,268 authorized unissued options, while there were no options remaining that could be granted under the 1998 Plan. The Company uses judgment in determining the fair value of the share-based payments on the date of grant using an option-pricing model with assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the risk-free interest rate of the awards, the expected life of the awards, the expected volatility over the term of the awards, and the expected dividends of the awards. The Company uses the Black-Scholes option pricing model to determine the fair value of share-based payments granted under the guidelines of ASC Topic 718. In applying the Black-Scholes methodology to the options granted, the Company used the following assumptions:
|  | Year ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Risk-free interest rate, average |  |  | 1.52 | % |  |  | 2.00 | % |  |  | 2.20 | %
Expected option life, average |  |  | 6.1 years |  |  |  | 6.1 years |  |  |  | 8.2 years |
Expected price volatility, average |  |  | 43.75 | % |  |  | 44.30 | % |  |  | 47.60 | %
Expected dividend yield |  |  | 1.71 | % |  |  | 1.10 | % |  |  | -% |
The risk-free interest rate is determined using the U.S. Treasury rate in effect as of the date of the grant, based on the expected life of the stock option. The expected life of the stock option is determined using historical data. The expected price volatility is determined using a weighted average of daily historical volatility of the Company’s stock price over the corresponding expected option life. Under guidelines of ASC Topic 718, the Company recognizes compensation cost net of an expected forfeiture rate and recognized the associated compensation cost for only those awards expected to vest on a straight-line basis over the underlying requisite service period. The Company estimated the forfeiture rates based on its historical experience and expectations about future forfeitures. The following table shows the stock option activity:
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value |
As of December 31, 2013 |  |  | 1,111,274 |  |  | $ | 5.15 |  |  |  |  |  |  |  |  |
Granted |  |  | 193,500 |  |  |  | 8.83 |  |  |  |  |  |  |  |  |
Expired and canceled |  |  | (29,532 | ) |  |  | 6.87 |  |  |  |  |  |  |  |  |
Forfeited prior to vesting |  |  | (729 | ) |  |  | 8.88 |  |  |  |  |  |  |  |  |
Exercised |  |  | (234,432 | ) |  |  | 5.72 |  |  |  |  |  |  |  |  |
As of December 31, 2014 |  |  | 1,040,081 |  |  | $ | 5.65 |  |  |  | 5.60 |  |  | $ | 4,286 |
Granted |  |  | 56,666 |  |  |  | 13.03 |  |  |  |  |  |  |  |  |
Reinstated |  |  | 4,583 |  |  |  | 4.47 |  |  |  |  |  |  |  |  |
Expired and canceled |  |  | (1,000 | ) |  |  | 3.42 |  |  |  |  |  |  |  |  |
Forfeited prior to vesting |  |  | (15,252 | ) |  |  | 7.85 |  |  |  |  |  |  |  |  |
Exercised |  |  | (56,143 | ) |  |  | 5.51 |  |  |  |  |  |  |  |  |
As of December 31, 2015 |  |  | 1,028,935 |  |  | $ | 6.03 |  |  |  | 4.73 |  |  | $ | 7,104 |
Granted |  |  | 217,700 |  |  |  | 11.73 |  |  |  |  |  |  |  |  |
Expired and canceled |  |  | (4,186 | ) |  |  | 12.03 |  |  |  |  |  |  |  |  |
Forfeited prior to vesting |  |  | (17,360 | ) |  |  | 10.67 |  |  |  |  |  |  |  |  |
Exercised |  |  | (374,857 | ) |  |  | 4.46 |  |  |  |  |  |  |  |  |
As of December 31, 2016 |  |  | 850,232 |  |  | $ | 8.06 |  |  |  | 5.78 |  |  | $ | 3,001 |
Vested and Expected to Vest at December 31, 2014 |  |  | 1,040,081 |  |  | $ | 5.65 |  |  |  | 5.60 |  |  | $ | 4,286 |
Vested at December 31, 2014 |  |  | 730,016 |  |  | $ | 4.67 |  |  |  | 4.15 |  |  | $ | 3,271 |
Vested and Expected to Vest at December 31, 2015 |  |  | 1,028,935 |  |  | $ | 6.03 |  |  |  | 4.73 |  |  | $ | 7,104 |
Vested at December 31, 2015 |  |  | 820,022 |  |  | $ | 5.10 |  |  |  | 3.74 |  |  | $ | 6,419 |
Vested and Expected to Vest at December 31, 2016 |  |  | 850,232 |  |  | $ | 8.06 |  |  |  | 5.78 |  |  | $ | 3,001 |
Vested at December 31, 2016 |  |  | 552,097 |  |  | $ | 6.33 |  |  |  | 4.09 |  |  | $ | 2,843 |
The weighted average per share fair value of options granted during the years ending December 31, 2016, 2015 and 2014 was $4.27, $5.27, and $ 4.85 respectively. The total intrinsic value of options exercised during the years ended December 31, 2016, 2015 and 2014 was $2,824, $404, and $1,337 respectively. The total pre-tax compensation cost related to stock options recognized during the years ended December 31, 2016, 2015, and 2014 was $628, $552 and $401, respectively. Tax benefit from compensation cost related to stock options during the years ended December 31, 2016, 2015 and 2014 was $107, $41 and $211, respectively. As of December 31, 2016, the total compensation cost related to stock options not yet recognized and before the effect of any forfeitures was $1,127, which is expected to be recognized over approximately the next 2.19 years on a straight-line basis. Employee Stock Purchase Plan During 2016, the Company issued shares to employees under the Company’s 2015 Employee Stock Purchase Plan (the “ESPP”). The ESPP was approved by the Company’s shareholders on December 12, 2015. As of December 31, 2016, 475,893 of the originally approved 500,000 shares were available for offerings under the ESPP. Offering periods under the ESPP commence on each Jan 1 and July 1, and continue for a duration of six months. The ESPP is available to all employees who do not own, or are deemed to own, shares of stock making up an excess of 5% of the combined voting power of the Company, its parent or subsidiary. During each offering period, each eligible employee may purchase shares under the ESPP after authorizing payroll deductions. Under the ESPP, each employee may purchase up to the lesser of 2,500 shares or $25 of fair market value (based on the established purchase price) of the Company’s stock for each offering period. Unless the employee has previously withdrawn from the offering, his or her accumulated payroll deductions will be used to purchase common stock on the last business day of the period at a price equal to 85% (or a 15% discount) of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. Shares purchased and compensation expense associated Employee Stock Purchase Plans were as follows:
|  | 2016 |  |  | 2015 |  |  | 2014 |
Shares purchased under ESPP plans |  |  | 9,140 |  |  |  | 14,982 |  |  |  | 82 |
Plan compensation expense |  | $ | 18 |  |  | $ | 31 |  |  | $ | - |
Stock Repurchase Program and Cash Dividends In May 2012, our Board of Directors authorized a stock repurchase program to purchase the Company’s common stock in the open market. A total of 272,767 shares costing $2,598 were purchased under this program during the year ended December 31, 2014. The cost of shares purchased were recorded as a reduction to shareholders’ equity. On December 2, 2015, the Company announced the discontinuance of the stock repurchase program along with the initiation of a cash dividend plan. On January 31, 2017, the Company declared its most recent dividend under this plan of $0.05 per share of ClearOne common stock, payable on March 1, 2017 to shareholders of record on February 15, 2017. In addition, on March 1, 2017, our Board of Directors authorized an increase in our quarterly dividend from $0.05 per share to $0.07 per share beginning with the second quarter dividend in 2017 expected to be paid on or about June 1, 2017. On March 9, 2016, the Board of Directors of the Company authorized the repurchase of up to $10,000 of the Company’s outstanding shares of common stock under a new stock repurchase program. In connection with the repurchase authorization, the Company was authorized to complete the repurchase through open market transactions or through an accelerated share repurchase program, in each case to be executed at management’s discretion based on business and market conditions, stock price, trading restrictions, acquisition activity and other factors. The repurchase program may be suspended or discontinued at any time without prior notice. The transactions effectuated to date occurred in open market purchases. On March 1, 2017, the Board of Directors of the Company renewed and extended the repurchase program for up to an additional $10 million of common stock over the next twelve months. In connection with the repurchase extension authorization, the Company was authorized to complete the repurchase through open market transactions or through an accelerated share repurchase program, in each case to be executed at management’s discretion based on business and market conditions, stock price, trading restrictions, acquisition activity and other factors. The repurchase program may be suspended or discontinued at any time without prior notice. The transactions effectuated to date occurred in open market purchases. During the twelve months ended December 31, 2016, we acquired the following shares of common stock under the current stock repurchase program:
$ in thousands except per share price |  | Total Number of Shares Purchased (a) |  |  | Average Price Paid per Share (b) |  |  | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (c) |  |  | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs ($ thousands) (d) |
March 9 to March 31 |  |  | 33,600 |  |  | $ | 12.02 |  |  |  | 33,600 |  |  | $ | 9,596 |
April 1 to June 30 |  |  | 330,515 |  |  |  | 11.25 |  |  |  | 330,515 |  |  |  | 5,885 |
July 1 to September 30 |  |  | 91,965 |  |  |  | 11.16 |  |  |  | 91,965 |  |  |  | 4,861 |
October 1 to December 31 |  |  | 86,179 |  |  |  | 11.00 |  |  |  | 86,179 |  |  |  | 3,914 |
Total |  |  | 542,259 |  |  | $ | 11.25 |  |  |  | 542,259 |  |  |  |  |
From March 11, 2016 to March 17, 2016, the Company offered to repurchase eligible vested options to purchase shares under the 1998 Plan and the 2007 Plan from employees and directors. The Company repurchased delivered options at a repurchase price equal to the difference between the closing market price on the date of the employee’s communication of accepting the repurchase offer and the exercise price of such employee’s delivered options, subject to applicable withholding taxes and charges. The Company repurchased 225,542 stock options from employees and directors at an average purchase price of $7.77.

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- Definition The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income, and compensation-related costs for equity-based compensation. Includes, but is not limited to, disclosure of policies, compensation plan details, equity-based arrangements to obtain goods and services, deferred compensation arrangements, and employee stock purchase plan details. + References No definition available. + Details
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