| NOTE F - STOCKHOLDERS' EQUITY |
The
2013 Stock Incentive Plan ("2013 Plan") provides for the grant of any or all of the following types of awards: (a) stock
options, (b) restricted stock, (c) deferred stock, (d) stock appreciation rights, and (e) other stock-based awards including restricted
stock units. Awards under the 2013 Plan may be granted singly, in combination, or in tandem. Subject to standard anti-dilution
adjustments as provided, the 2013 Plan provides for an aggregate of 2,600,000 shares of the Company's common stock to be available
for distribution. The Company's Compensation Committee generally has the authority to administer the 2013 Plan, determine participants
who will be granted awards, the size and types of awards, the terms and conditions of awards and the form and content of the award
agreements representing awards. Awards under the 2013 Plan may be granted to employees, directors and consultants of the Company
and its subsidiaries. As of December 31, 2018, there are 1,267,197 shares of common stock available for issuance under the 2013
Plan.
| [1] |
Restricted
Stock Units |
| |
|
| |
On
March 8, 2018, the Company granted 15,000 restricted stock units ("RSUs") under the 2013 Plan to each of its three
non-management directors as an annual grant for 2018 for service on the Company's Board of Directors. Each RSU represents
a contingent right to receive one share of the Company's common stock. The RSUs vest in four equal quarterly installments
of 3,750 shares of common stock on each of March 15, 2018, June 15, 2018, September 15, 2018 and December 15, 2018, subject
to continued service on the Board of Directors.
On
November 27, 2018, the Company granted an aggregate of 130,000 RSUs under the 2013 Plan to its Chief Financial Officer
(40,000 RSUs), Executive Vice President (50,000 RSUs) and a consultant (40,000 RSUs). All such RSUs vest 50% on November
27, 2019 and 50% on November 27, 2020.
On
June 9, 2018, an aggregate of 70,000 RSUs vested which were owned by the Company's Chief Financial Officer (25,000 RSUs),
Executive Vice President (25,000 RSUs) and a consultant (20,000 RSUs). With respect to vesting of 50,000 RSUs of such
on June 9, 2018: (i) the Company's Chief Financial Officer delivered 9,171 shares to satisfy withholding taxes and received
15,829 net shares of common stock; and (ii) the Company's Executive Vice President delivered 7,613 shares of common stock
to satisfy withholding taxes and received 17,387 net shares of common stock.
On
July 14, 2018, 375,000 RSUs owned by the Company's Chairman and Chief Executive Officer vested in accordance with his
employment agreement dated July 14, 2016 (see Note I[1] hereof). With respect to such vesting of restricted stock units,
the Company's Chairman and Chief Executive Officer delivered 172,313 shares of common stock to satisfy withholding taxes
and received 202,687 net shares of common stock.
On
February 2, 2017, the Company granted 13,500 RSUs under the 2013 Plan to each of its three non-management directors as
an annual grant for 2017 for service on the Company's Board of Directors. The RSUs vest in four equal quarterly installments
of 3,375 shares of common stock on each of March 15, 2017, June 15, 2017, September 15, 2017 and December 15, 2017.
The
fair value of restricted stock units is determined based on the number of shares granted and the quoted market price of
the Company's common stock on the date of grant for time-based and performance-based awards.
All
the Company's issued and RSUs have divided equivalent rights. As of December 31, 2018, there was $76,000 accrued for dividend
equivalent rights. As of December 31, 2017, there was $84,000 accrued for dividend equivalent rights.
A
summary of restricted stock units granted during the year ended December 31, 2018 is as follows (each restricted stock
unit represents the contingent right to receive one share of the Company's common stock):
|
| |
|
Number
of Shares |
|
|
Weighted-Average
Grant Date Fair Value |
|
| Balance
of restricted stock units outstanding at December 31, 2017 |
|
|
820,000 |
|
|
$ |
2.28 |
|
| Grants
of restricted stock units |
|
|
175,000 |
|
|
|
2.57 |
|
| Vested
restricted stock units |
|
|
(490,000 |
) |
|
|
2.49 |
|
| Balance
of unvested restricted stock units at December 31, 2018 |
|
|
505,000 |
|
|
$ |
2.17 |
|
| |
Restricted stock
unit compensation expense was $687,000 for the year ended December 31, 2018 and $949,000 for the year ended December 31, 2017. |
| |
|
| |
The Company has
an aggregate of $622,000 of unrecognized restricted stock unit compensation expense as of December 31, 2018 to be expensed
over a weighted average period of 1.50 years. |
| [2] |
Stock Options |
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|
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At
December 31, 2018, stock options to purchase an aggregate of 385,000 shares of common stock were outstanding under the
2013 Plan and options to purchase 1,250,000 shares of common stock were outstanding representing option grants outside
of the 2013 Plan (issued prior to the establishment of the 2013 Plan). There were no grants of stock options during the
years ended December 31, 2018 and 2017.
The
following table summarizes stock option activity for the years ended December 31:
|
| |
|
2018 |
|
|
2017 |
|
| |
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
| |
|
|
|
|
Average |
|
|
|
|
|
Average |
|
| |
|
Options |
|
|
Exercise |
|
|
Options |
|
|
Exercise |
|
| |
|
Outstanding |
|
|
Price |
|
|
Outstanding |
|
|
Price |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Options
outstanding at beginning of year |
|
|
2,010,000 |
|
|
$ |
1.28 |
|
|
|
2,310,000 |
|
|
$ |
1.29 |
|
| Granted |
|
|
― |
|
|
|
― |
|
|
|
― |
|
|
|
― |
|
| Expired |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
― |
|
| Exercised |
|
|
(375,000 |
) |
|
$ |
1.74 |
|
|
|
(300,000 |
) |
|
$ |
1.31 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Options
outstanding at end of year |
|
|
1,635,000 |
|
|
$ |
1.18 |
|
|
|
2,010,000 |
|
|
$ |
1.28 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Options
exercisable at end of year |
|
|
1,635,000 |
|
|
$ |
1.18 |
|
|
|
2,010,000 |
|
|
$ |
1.28 |
|
During
the year ended December 31, 2018 and 2017, the Company did not recognize any stock-based compensation related to the vesting of
prior issued stock options to employees and directors. The Company at December 31, 2018 and 2017 had no remaining unrecognized
expenses related to unvested stock options to employees and directors. The aggregate intrinsic value of all stock options exercisable
at December 31, 2018 was $1,732,000.
During
the year ended December 31, 2018, stock options to purchase an aggregate of 375,000 shares of the Company's common stock were
exercised (350,000 shares of which were exercised on a net exercise (cashless basis)), by a director of the Company (325,000 shares)
and one other director of the Company (25,000 shares) at exercise prices ranging from $1.19 to $1.88 per share. With respect to
the options to purchase 350,000 shares on a net exercise (cashless) basis, aggregate net shares of 144,954 were delivered to the
directors.
During
the year ended December 31, 2017, stock options to purchase an aggregate of 300,000 shares of the Company's common stock were
exercised (50,000 shares of which were exercised on a net exercise (cashless) basis), by a former director of the Company (125,000
shares), the Company's Chief Financial Officer and his three children (an aggregate of 75,000 shares), and two directors of the
Company (each 50,000 shares) at exercise prices ranging from $1.14 to $1.40 per share. With respect to the aforementioned stock
option to purchase 50,000 shares exercised on a net exercise (cashless) basis by a director of the Company, net shares of 26,734
were delivered to the director.
The
following table presents information relating to all stock options outstanding and exercisable at December 31, 2018:
| |
|
|
|
|
|
|
|
Weighted |
|
|
|
|
| |
|
|
|
|
Weighted |
|
|
Average |
|
|
|
|
| Range of |
|
|
|
|
Average |
|
|
Remaining |
|
|
|
|
| Exercise |
|
Options |
|
|
Exercise |
|
|
Life
in |
|
|
Options |
|
| Price |
|
Outstanding |
|
|
Price |
|
|
Years |
|
|
Exercisable |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| $0.83
- $2.34 |
|
|
1,635,000 |
|
|
$ |
1.18 |
|
|
|
1.49 |
|
|
|
1,635,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
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|
| [3] |
Warrants |
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|
| |
As of December 31,
2018, there were no outstanding warrants to purchase shares of the Company's common stock. |
|