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Note 12: Stock Compensation Plans
 12 Months Ended
Dec. 31, 2013
Notes  
Note 12: Stock Compensation Plans

 

12)     Stock Compensation Plans

 

The Company has three fixed option plans (the “2003 Plan”, the “2006 Plan” and the “2013 Plan”). Compensation expense for options issued of $88,369, $251,031 and $253,934 has been recognized under these plans for 2013, 2012 and 2011, respectively. As of December 31, 2013, the total unrecognized compensation expense related to the options issued in 2013 was $240,021, which is expected to be recognized over the vesting period of one year.

 

The weighted-average fair value of each option granted in 2013 under the 2013 Plan and the 2006 Plan, is estimated at $1.96 for the December 6, 2013 and December 7, 2013 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 67.93%, risk-free interest rate of 1.68%, and an expected term of 5.31 years.

 

The weighted-average fair value of each option granted in 2012 under the 2006 Plan, is estimated at $3.18 for the December 7, 2012 options as of the grant date using the Black Scholes Option Pricing Model with the following weighted-average assumptions: dividend yield of 5%, volatility of 73.89%, risk-free interest rate of 0.70%, and an expected term of 5.31 years.

 

The weighted-average fair value of each option granted in 2012 under the 2003 Plan and the 2006 Plan, is estimated at $0.64 and $0.66, respectively for the April 13, 2012 options as of the grant date using the Black Scholes Option Pricing Model with the following weighted-average assumptions: dividend yield of 5% and 5%, volatility of 70.26% and 72.58%, risk-free interest rate of 0.84% and 1.04%, and an expected term of 4.53 to 5.32 years, respectively.

The weighted-average fair value of each option granted in 2011 under the 2003 Plan and the 2006 Plan, is estimated at $0.52 and $0.71 for the December 2, 2012 options as of the grant date using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 5%, volatility of 59%, risk-free interest rate of 3.4%, and an expected life of five to ten years.

 

The Company generally estimates the expected life of the options based upon the contractual term of the options adjusted for actual experience. Future volatility is estimated based upon the weighted historical volatility of the Company’s Class A common stock and three per company stocks over a period equal to the estimated life of the options. Common stock issued upon exercise of stock options are generally new share issuances rather than from treasury shares.

 

 

 

Activity of the stock option plans is summarized as follows:

 

 

 

 

 

 

 

 

 Number of Class A Shares

 

Weighted Average Exercise Price

 

 Number of Class C Shares(1)

 

Weighted Average Exercise Price(1)

 Outstanding at December 31, 2010

 

   1,596,095

 

  $    2.61

 

   3,438,355

 

  $   2.38

 Adjustment for the effect of stock dividends

 

       95,073

 

 

 

      171,920

 

 

 Granted

 

      346,500

 

 

 

                -

 

 

 Exercised

 

                -

 

 

 

                -

 

 

 Cancelled

 

      (41,125)

 

 

 

                -

 

 

 

 

 

 

 

 

 

 

 

 Outstanding at December 31, 2011

 

   1,996,543

 

  $    2.40

 

   3,610,275

 

  $   2.20

 Adjustment for the effect of stock dividends

 

       43,928

 

 

 

      245,145

 

 

 Granted

 

      347,000

 

 

 

                -

 

 

 Exercised

 

  (1,041,276)

 

 

 

    (525,000)

 

 

 Cancelled

 

    (123,134)

 

 

 

                -

 

 

 Reclass from A to C

 

    (250,808)

 

 

 

   2,508,085

 

 

 

 

 

 

 

 

 

 

 

 Outstanding at December 31, 2012

 

      972,253

 

  $    2.07

 

   5,838,505

 

  $   2.18

 Adjustment for the effect of stock dividends

 

       17,962

 

 

 

      242,217

 

 

 Granted

 

       81,960

 

 

 

      500,000

 

 

 Exercised

 

    (485,366)

 

 

 

  (1,906,022)

 

 

 Cancelled

 

      (76,676)

 

 

 

    (638,138)

 

 

 Reclass from A to C

 

    (105,000)

 

 

 

   1,050,000

 

 

 

 

 

 

 

 

 

 

 

 Outstanding at December 31, 2013

 

      405,133

 

  $    2.41

 

   5,086,562

 

  $   2.00

 

 

 

 

 

 

 

 

 

 Exercisable at end of year

 

      319,009

 

$    1.82

 

   4,561,562

 

$   1.65

 

 

 

 

 

 

 

 

 

 Available options for future grant

 

      312,642

 

 

 

   1,050,000

 

 

 

 

 

 

 

 

 

 

 

Weighted average contractual term of options

 

 

 

 

 

 

 

 

 outstanding at December 31, 2013

 

7.23 years

 

 

 

2.61 years

 

 

 

 

 

 

 

 

 

 

 

Weighted average contractual term of options

 

 

 

 

 

 

 

 

 exercisable at December 31, 2013

 

6.51 years

 

 

 

2.34 years

 

 

 

 

 

 

 

 

 

 

 

Aggregated intrinsic value of options outstanding

 

 

 

 

 

 

 

 at December 31, 2013

 

$893,398

 

 

 

$1,340,147

 

 

 

 

 

 

 

 

 

 

 

Aggregated intrinsic value of options exercisable

 

 

 

 

 

 

 

 at December 31, 2013

 

$893,172

 

 

 

$1,340,147

 

 

 

 

 

 

 

 

 

 

 

(1) Class “C” shares are converted to Class “A” shares on a 10 to 1 ratio. The Weighted Average Exercise Price is based on Class A Common shares.

 

 

 

 

The total intrinsic value (which is the amount by which the fair value of the underlying stock exceeds the exercise price of an option on the exercise date) of stock options exercised during the years ended December 31, 2013 and 2012 was $2,179,393 and $3,340,460, respectively.