Note 11 - Stock-Based Compensation
|6 Months Ended|
Jun. 30, 2017
|Disclosure of Compensation Related Costs, Share-based Payments [Abstract]|
The Company’s stock-based compensation for the three and six months ended June 30, 2017 and 2016 consist primarily of restricted stock awards. The activity of restricted stock awards granted to employees, executives and Board members was as follows:
The Company issued 20,162 shares of restricted stock to its Board members for the three months ended June 30, 2017. The total fair value of restricted stock awards granted to employees and the Board was $0.1 million for the three months ended June 30, 2017. There were no restricted stock awards granted to employees for the three months ended June 30, 2017. The total fair value of restricted stock awards granted to employees and the Board was $0.1 million for the three months ended June 30, 2016, and $0.7 million and $0.4 million for the six months ended June 30, 2017 and 2016, respectively. As of June 30, 2017, the total unrecognized expense for unvested restricted stock awards, net of expected forfeitures, was $0.9 million, which is expected to be amortized over a weighted average period of 1.1 years.
Restricted Stock Awards Issued to Ryan Drexler, Chairman of the Board, Chief Executive Officer and President
In January 2017, the Company issued Mr. Ryan Drexler 350,000 shares of restricted stock pursuant to an Amended and Restated Executive Employment Agreement dated November 18, 2016 (“Employment Agreement”) with a grant date value of $0.7 million based upon the closing price of the Company’s common stock on the date of issuance. These shares of restricted stock vest in full upon the first anniversary of the grant date.
Accelerated Vesting of Restricted Stock Awards Related to Termination of Employment Agreement with Brad Pyatt, Former Chief Executive Officer
In March 2016, Brad Pyatt, the Company’s former Chief Executive Officer, terminated his employment with the Company. Pursuant to the terms of the separation agreement with the Company, in exchange for a release of claims, the Company agreed to pay severance in the amount of $1.1 million, payable over a 12-month period, a lump sum of $250,000 paid during March 2017 and reimbursement of COBRA premiums, which the Company recorded in the six months ended June 30, 2016. In addition, the remaining unvested restricted stock awards held by Brad Pyatt of 500,000 shares vested in full upon his termination in accordance with the original grant terms. In connection with the accelerated vesting of these restricted stock awards, the Company recognized stock compensation expense of $3.9 million, which is included in “Salaries and benefits” in the accompanying Condensed Consolidated Statements of Operations for the six months ended June 30, 2016. All amounts due Mr. Pyatt were paid as of March 31, 2017.
The Company may grant options to purchase shares of the Company’s common stock to certain employees and directors pursuant to the 2015 Plan. Under the 2015 Plan, all stock options are granted with an exercise price equal to or greater than the fair market value of a share of the Company’s common stock on the date of grant. Vesting is generally determined by the Compensation Committee of the Board within limits set forth in the 2015 Plan. No stock option will be exercisable more than ten years after the date it is granted.
In February 2016, the Company issued options to purchase 137,362 shares of its common stock to Mr. Drexler, the Company’s Chairman of the Board, Chief Executive Officer, and President, and 54,945 to Michael Doron, the former Lead Director of the Board. These stock options have an exercise price of $1.89 per share, a contractual term of 10 years and a grant date fair value of $1.72 per share, or $0.3 million, which is amortized on a straight-line basis over the vesting period of two years. The Company determined the fair value of the stock options using the Black-Scholes model. The table below sets forth the assumptions used in valuing such options.
For the three months ended June 30, 2017 and 2016, the Company recorded stock compensation expense related to options of $12,000 and $41,000, respectively. For the six months ended June 30, 2017 and 2016, the Company recorded stock compensation expense related to options of $83,000 and $55,000, respectively.
The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.
Reference 1: http://www.xbrl.org/2003/role/presentationRef