NOTE 8: STOCK BASED COMPENSATION

The Company has a shareholder approved long-term incentive plan (the "LTIP") to assist the Company and its affiliates in attracting, motivating and retaining selected individuals to serve as employees, directors, consultants and advisors of the Company and its affiliates by providing incentives to such individuals through the ownership and performance of the Company's common stock. There are 1.1 million shares of common stock authorized for issuance under the LTIP. Shares available for grant under the LTIP may be either authorized, but unissued shares or shares that have been reacquired by the Company and designated as treasury shares. As of June 30, 2015 and December 31, 2014, 382,198 and 420,392 shares of the Company's common stock were available for grant under the LTIP. The LTIP permits the issuance by the Company of awards in the form of stock options, stock appreciation rights, restricted stock and restricted stock units and performance shares. The exercise price per share of the Company's common stock purchasable under any stock option or stock appreciation right may not be less than 100% of the fair market value of one share of common stock on the date of grant. The term of any stock option or stock appreciation right may not exceed ten years. The LTIP also provides plan participants with a cashless mechanism to exercise their stock options. Issued restricted stock, stock options and restricted stock units are subject to vesting restrictions.

Restricted Stock Awards

Stock-based compensation expense for restricted stock awards was $0.3 million and $0.5 million for the six months ended June 30, 2015 and 2014, respectively, and was recorded within selling, general, and administrative expenses. Restricted stock awards are amortized over their respective vesting periods of two or three years. The Company records stock-based compensation for grants of restricted stock awards on a straight-line basis.

The following table summarizes the restricted common stock activity for the six months ended June 30, 2015:


	For the six months ended
	June 30, 2015
				Weighted
				Average Fair
	Shares			Value

Balance - nonvested at December 31, 2014	124,578		$	9.84
Granted	80,701			7.37
Vested	(59,594	)		10.02
Forfeited	(3,365	)		9.94
Balance - nonvested at June 30, 2015	142,320		$	8.37

The total grant-date fair value of restricted stock vested for the six months ended June 30, 2015 was $0.6 million. As of June 30, 2015, $0.9 million of total unrecognized compensation expense related to restricted common stock is expected to be recognized over a weighted average period of approximately 2.4 years.

Stock Options

The following tables summarize stock option activity for the six months ended June 30, 2015, along with stock options exercisable at the end of the period:


	For the six months ended
	June 30, 2015

					Weighted
				Weighted	Average
				Average	Contractual
Options	Shares			Exercise Price	Life (Years)

Outstanding - Beginning of period	327,003		$	12.18
Forfeited or expired	(22,655	)		11.02
Outstanding - End of period	304,348		$	12.26	6.34

Vested and Expected to Vest at June 30, 2015	289,131
Exercisable at June 30, 2015	214,295

The fair value of the stock-based awards was estimated using the Black-Scholes model. No options were granted during the six months ended June 30, 2015.

As of June 30, 2015, the amount of unrecognized compensation expense related to stock options awards is expected to be de minimis.

Stock-based compensation expense resulting from stock options granted to employees was de minimis for the six months ended June 30, 2015 and 2014 and was recorded within selling, general, and administrative expenses.

Shareholder Rights Plan

On September 2, 2014, in connection with an unsolicited, non-binding acquisition proposal, the Company's Board of Directors (the "Alteva Board") adopted a Stockholder Rights Plan that provides for the distribution of one right for each share of common stock outstanding. Each right entitles the holder to purchase one one-thousandth (1/1000^th) of a share of Series A Junior Participating Preferred Stock, par value of $0.01 per share, of the Company (the "Preferred Stock") at a price of $22.20 per one-thousandth of a share of Preferred Stock, subject to adjustment. The rights generally become distributed and exercisable at the discretion of the Alteva Board following a public announcement that 20% or more of the Company's common stock has been acquired or an intent to acquire has become apparent. The rights will expire on September 1, 2015, unless the final expiration date is advanced or extended or unless the rights are earlier redeemed or exchanged by the Company. Further description and terms of the rights are set forth in the Rights Agreement between the Company and American Stock Transfer & Trust Company, LLC. As of June 30, 2015, the Company is not aware of the occurrence of any events that would trigger the rights under the plan.

Share Repurchase Program

On August 25, 2014, the Alteva Board authorized a repurchase program for up to $3.0 million of its common stock. Share purchases may take place in open market transactions or in privately negotiated transaction and may be made from time to time depending on market conditions, share price, trading volume and other factors. The repurchase program authorized by the Alteva Board does not require the Company to acquire a specific number of shares, and may be terminated, suspended, or modified at any time. The timing and actual number of shares repurchased, if any, will depend on a variety of factors including the market price of the Company's common stock, regulatory, legal and contractual requirements, and other market factors. The share repurchase is expected to be funded from available cash on hand.

On May 14, 2015, the stock repurchase program that was authorized in August 2014 was terminated by the Company's Board of Directors in connection with approving the special cash dividend (see Note 10).

As of June 30, 2015, the Company repurchased 11,057 shares under the repurchase program at a value of $0.1 million. Shares were purchased on the open market at the prevailing days' stock price, plus transaction costs.