Stock-Based Compensation

9 Months Ended

Sep. 30, 2014

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

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

11. Stock-Based Compensation

        The Clean Diesel Technologies, Inc. Stock Incentive Plan, as amended (the “Plan”), provides for the awarding of incentive stock options, non-qualified stock options, stock appreciation rights, restricted shares, performance awards, bonuses or other forms of share-based awards, or combinations of these to the Company’s directors, officers, employees, consultants and advisors (except consultants or advisors in capital-raising transactions) as determined by the Board of Directors. As of September 30, 2014, there were 152,211 shares available for future grants under the Plan.

        Total stock-based compensation expense for the three months ended September 30, 2014 and 2013 was $0.2 million. Total stock-based compensation expense for the nine months ended September 30, 2014 and 2013 was $0.5 million. Compensation expense is recognized on a straight-line basis over the requisite service period for all stock-based awards made to employees and directors in the unaudited condensed consolidated statements of comprehensive loss.

Stock Options              

        Stock option activity is summarized as follows: 

		Weighted Average  Exercise  Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (thousands)
	Options
Outstanding at December 31, 2013	714,712	$	7.17
Exercised	(97,172)	$	2.83
Cancelled	(82,921)	$	5.04
Outstanding at September 30, 2014	534,619	$	8.29	5.4	$	-
Exercisable at September 30, 2014	482,987	$	8.86	5.2	$	-

        The aggregate intrinsic value represents the difference between the exercise price and the Company’s closing stock price on the last trading day of the quarter. As of September 30, 2014, the Company had $0.1 million of unrecognized compensation cost related to stock option grants which will be recognized over a weighted average estimated period of 0.4 years.

        Restricted Stock Units (“RSUs”)

        RSU activity is as follows: 

	Shares	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2013 (1)	285,558	$	2.35
Granted	406,603	$	2.82
Vested	(149,793)	$	2.62
Forfeited	(150,046)	$	2.12
Nonvested units at September 30, 2014 (2)	392,322	$	2.83
(1) Excludes 26,638 RSUs vested and unissued
(2) Excludes 58,703 RSUs vested and unissued

       As of September 30, 2014, the Company had $1.0 million of unrecognized compensation cost related to RSUs, which will be recognized over a weighted average estimated period of 2.0 years. The RSUs vested and unissued noted in the table above represent awards granted to employees who are subject to the terms of the Company’s black out policy from time to time due to their knowledge of non-public information and who were unable to sell shares on the open market to cover their tax obligations for their vested RSUs by the dates noted above.

        Modification

       On July 31, 2014, the Compensation Committee approved the modification of the Company’s former chief financial officer’s  unvested equity awards to accelerate the vesting upon his termination, effective August 30, 2014, and extend the expiration of his stock options from 90 days to 180 days following the date of his termination. This was considered a Type III modification in accordance with the authoritative guidance for share-based compensation, and, as a result, the Company reversed all expense previously recorded for his unvested awards and recorded the fair value of the modified awards. The total compensation expense resulting from this modification was not significant.