Stock incentive plan and share-based compensation

6 Months Ended

Jun. 30, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 11: Stock incentive plan and share-based compensation

Stock incentive plan

The Company’s board of directors established the 2012 Stock Incentive Plan (the “Plan”) on April 15, 2012, and the Company’s shareholders ratified the Plan at the annual meeting of the Company’s stockholders on May 30, 2012. 415,000 shares of Common Stock were reserved to grant Options, Stock Awards and Performance Shares (collectively the “Awards”) to “Participants” under the Plan. The Plan is administered by the board of directors or the Compensation Committee of the board of directors, which determines the individuals to whom awards shall be granted as well as the type, terms and conditions of each award, the option price and the duration of each award. 

Options granted under the Plan vest as determined by the Company’s Compensation and Nominations Committee and expire over varying terms, but not more than seven (7) years from date of grant. In the case of an Incentive Stock Option that is granted to a 10% shareholder on the date of grant, such Option shall not be exercisable after the expiration of five (5) years from the date of grant.

Issuance of restricted shares

At the June 25, 2012 board meeting, the members of the Compensation and Nominations Committee approved the grant of 232,000 restricted shares of MGT common stock under the Plan, with each current independent director of the board receiving 21,000 restricted shares and 190,000 shares awarded to officers and certain employees. The restricted shares vest one-third each six months from date of issue. The unvested shares are subject to forfeiture if the applicable recipient is not a director, officer and/or employee of the Company at the time the restricted shares are to vest. The restricted shares were valued at their fair market value on date of grant, of which the share-based compensation expense will be recognized over their vesting period.

At June 30, 2012 the Company accrued $12 share-based compensation expense relating to the issuance of the restricted shares. The shares were issued on August 9, 2012. No option grants were issued during the six months ended June 30, 2012.

Issuance of shares to former directors

At the June 25, 2012 board meeting, the members of the Compensation and Nominations Committee approved the issuance of 33,000 shares of common stock to certain of our former directors for past service on the Company’s board of directors. These shares were subsequently issued on August 10, 2012.

The stock was valued at $185, using the closing market price on the date of grant. Stock-based compensation of $185 was recorded and accrued for at June 30, 2012 and the shares were issued on August 9, 2012.

Unrecognized compensation cost

As of June 30, 2012 there was $1,281 of total unrecognized compensation costs related to non-vested share-based compensation arrangements. That cost is expected to be recognized over a weighted average period of 1.50 years.

Medicsight equity plan

Following Medicsight’s general meeting on March 26, 2012 (Note 1), a shareholder resolution approving the Reverse Split of 1-for-325,000 of the Company’s existing ordinary shares of £0.05 par value into one new ordinary share was duly passed. As a result of the reverse split, option holders under certain existing share option plans are no longer entitled to options under those plans as option holders’ share entitlement is now less than one as a result of the Reverse Split. Following the share reversal, the Company cancelled with immediate effect all redundant option plans with the exception of Plan J. All previously unrecognized stock based compensation expense was accelerated.

Medicsight has the following Stock Option Plan:

Plan J — on May 14, 2009, we approved and subsequently granted options for 24 shares under stock option plan “J”. Options under this plan vest in equal one-sixths for each six months that employees have been employed for 6, 12, 18, 24, 30 and 36 months from the grant date. At June 30, 2012, there were 6 options outstanding and exercisable.

No grants were issued in the six months ended June 30, 2012.

The following table summarizes stock option activity for the six months ended June 30, 2012, under all option plans:

	Outstanding						Exercisable
	Number of shares			Weighted-average exercise price			Number of shares		Weighted-average exercise price
Outstanding at December 31, 2011		11			£35,700 ($58,500	)		10		£35,700 ($58,500	)
Granted		—			—
Exercised		—			—
Forfeited/Cancelled		(5	)		£19,500 ($30,917	)
Outstanding at June 30, 2012		6			£29,250 ($46,326	)		6		£$29,250 ($46,326	)

The following is a summary of the status of stock options outstanding at June 30, 2012:

	Outstanding options							Exercisable options
	Number		Remaining contractual life (years)		Average exercise price			Number		Average exercise price
Medicsight Plan J		6		6.9		£29,250 ($46,326	)		6		£29,250 ($46,326	)

On November 30, 2010, David Sumner, Chairman of Medicsight Limited, resigned from his position within the group. Immediately after his resignation, a two-year consultancy agreement was signed whereby Mr. Sumner would continue to assist the group in its commercial needs. As part of this agreement, Mr. Sumner was to continue to vest in his existing Medicsight Plan J options throughout the consultancy period. A modification of the 6 existing options has been accounted for, and is not considered to be material to the overall financial statements. The Company is no longer receiving services under this consulting agreement. As such, all expenses and related Stock-based compensation were accelerated at December 31, 2011.

The Company has recorded the following amounts related to its share-based compensation expense in the accompanying Condensed Consolidated Statements of Operations:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Selling, general and administrative	$	197	$	126	$	222	$	167
Research and development		—		21		7		24
Total	$	197	$	147	$	229	$	191

Of the Stock-based expense for the six months ended June 30, 2012 and 2011, $15 and $74 was allocated to non-controlling interest.

The aggregate intrinsic value for options outstanding and exercisable at June 30, 2012 and 2011, was $nil.