Note 9 - Long Term Incentive Plan

12 Months Ended

Dec. 31, 2013

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

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

9.           LONG-TERM INCENTIVE PLAN

Pursuant to the 2008 Long-term Incentive Plan (the "Plan"), the Company may grant stock options (non-qualified or incentive), stock appreciation rights, restricted stock and other share-based awards to employees, directors and other persons who serve the Company. The Plan is overseen by the Compensation Committee of the Board of Directors, which approves the timing and circumstances under which share-based awards may be granted. At December 31, 2013 there were 1.4 million shares available to be granted under the Plan. The Company issues new shares to satisfy the exercise or release of share-based awards. Under the provisions of Accounting Standards Codification Topic 718, Stock Compensation, all share-based payments are required to be recognized in the statement of operations based on their fair values at the date of grant.

The fair value of each option award is estimated using a Black-Scholes option valuation model. Expected volatility is based on the historical volatility of the price of the Company's stock. The risk-free interest rate is based on U.S. Treasury issues with a term equal to the expected life of the option. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. Options generally have a life of 10 years and have either time-based or performance-based vesting features. Time-based awards generally vest over a three year period, while the performance-based awards vest upon the achievement of specific performance targets. At December 31, 2013, there were no performance based awards outstanding. The fair values of the options granted during the years ended December 31, 2013 and 2012, were estimated based on the following weighted average assumptions:

	2013			2012
Expected volatility		76.87	%		71.46	%
Risk-free interest rate		1.78	%		0.58	%
Expected dividend yield		0.00	%		0.00	%
Expected life (in years)		6.00			6.00
Estimated fair value per option granted	$	1.08		$	0.67

The following table presents a summary of the Company's stock options for the year ended December 31, 2013:

						Weighted
				Weighted		average
	Number			average		remaining		Aggregate
	of			exercise		contractual		intrinsic
	options			price		life (years)		value
Outstanding at January 1, 2013		4,294,273		$	2.08
Granted		1,989,000			1.61
Exercised		(73,230	)		0.72
Forfeited and cancelled		(215,255	)		1.57
Outstanding at December 31, 2013		5,994,788			1.96		7.0	$	2,904,515
Exercisable at December 31, 2013		4,056,572			2.13		5.6	$	1,929,051

The aggregate intrinsic value of options exercised during the year ended December 31, 2013 and 2012 was approximately $38 thousand and $1 thousand, respectively.

The Company also grants restricted stock units, or RSUs, that entitle the holder to a share of Company common stock. The fair value of an RSU is equal to the market value of a share of common stock on the date of grant.

The following table presents a summary of the Company's RSU activity for the year ended December 31, 2013:

				Weighted average
	Shares			grant date fair value
Nonvested at January 1, 2013		343,161		$	1.76
Granted		329,164			0.81
Vested		(672,325	)		1.30
Nonvested at December 31, 2013		-			0.00

On May 22, 2013, the Business Combination of Chyron and Hego, as discussed in Note 8 to these consolidated financial statements, constituted a change in control under the Company's long-term incentive plans. As a result, at the closing of the Business Combination, all outstanding awards became immediately exercisable and fully vested, without regard to any time and/or performance vesting conditions. As a result, the Company recorded a charge in 2013 of $1.3 million, representing the unamortized expense related to the vesting of such equity awards.

On May 2, 2013 the Company implemented a restructuring plan to reduce operating costs that resulted in the reduction of its workforce by 20 employees. All affected employees were provided with an adjustment in the terms of their stock options and/or RSUs that were outstanding on their termination date. Subject to a properly executed release by the affected employees, the stock option and RSU awards were amended to permit those awards to vest at their termination date regardless of performance conditions if any in the original award, and the expiration date for exercise of the stock options was extended through the end of the original term of the stock option, usually ten years from date of grant, rather than expiring ninety days after the employee's termination date as stated in the original awards. As a result, the Company recorded a charge in 2013 of approximately $0.4 million associated with the modifications of these awards.

In addition, each year the Company adopts a Management Incentive Compensation Plan (the "Incentive Plan") that entitles recipients to a combination of cash and equity awards based on achievement of certain performance and service criteria in the fiscal years for which the Incentive Plan is adopted. During the year ended December 31, 2013 the Company recorded an expense of $1.3 million associated with the awards under the Incentive Plan of which approximately 65% is payable in common stock. During 2012 no expense was recorded because no amounts were earned under the Plan.

The impact on the Company's results of operations of recording share-based compensation expense for the years ended December 31, 2013 and 2012 is as follows (in thousands):

	2013		2012
Cost of sales	$	35	$	75
Research and development		243		323
Selling, general and administrative		2,715		540
	$	2,993	$	938

As of December 31, 2013, there was approximately $1.7 million of total unrecognized share-based compensation cost related to stock options granted under the Company's plans to employees or for services performed by non-employees that will be recognized over the next three years.