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SHARE-BASED COMPENSATION
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Dec. 31, 2011
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| SHARE-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHARE-BASED COMPENSATION |
NOTE 14 - SHARE-BASED COMPENSATION
Common Stock – In November 2010 the Company issued 232,170 shares of common stock to its President/CEO in connection with the purchase of STTC (see Note 1).
In January 2010 the Company issued 14,000 shares of common stock to non-employee directors for services rendered during 2009. Compensation expense recognized in connection with this issuance was $30,940.
In September 2009 the Company issued 12,000 shares of restricted common stock to non-employee Board members for services rendered. Compensation expense recognized in connection with this issuance was $40,800.
Stock Options – On April 7, 2008, the Board of Directors of the Company adopted the Stock Option Plan for Key Employees, as well as, the Non-Employee Director Stock Option Plan (hereinafter collectively referred to as the “Stock Option Plans”), subject to the approval of Company's shareholders. Shareholders approved the Stock Option Plans at the 2008 Annual Meeting of Shareholders on July 10, 2008. The Company filed Form S-8 to register the 1,000,000 shares allocated to the Stock Option Plans on October 23, 2008.
A summary of all 2011 issuances is as follows:
On May 20, 2011, the Company awarded 10 year options to Director Joseph Palm for 19,333 shares with the intent to increase the aggregate grant to 100,000 shares as they become available. The initial grant of 19,333 options has an exercise price equal to the closing price of the stock on May 20, 2011, which was $3.90 and vest after 1 year. Options to purchase the balance (80,667 shares) will have an exercise price equal to the closing price of the stock on the actual grant date or dates and be subject to a vesting schedule similar to that currently in effect for other non-employee directors as determined by the Compensation Committee of the Board of Directors. Compensation expense recognized during 2011 in connection with this award was approximately $33,000. On September 25, 2011, additional shares became available under the plan; therefore, the Company awarded 10 year options to Mr. Palm for 80,000 shares with an exercise price equal to the closing price of the stock on September 23, 2011, (the latest closing date available) which was $3.52. These options vest over 4.67 years with the first 20,000 vesting on May 19, 2013, and subsequent 20,000 share lots vesting each anniversary of that date subsequent until entirely vested. No compensation expense was recognized in connection with this award during 2011 due to the unvested nature of the options. Expense will be recognized during the vesting period beginning in May 2012. The fair value of the options granted was calculated using the Black-Scholes option valuation model with the following range of assumptions:
On May 2, 2011, the Company awarded 10 year options to Director John Townsend for 100,000 shares. These options have an exercise price equal to the closing price of the stock on May 2, 2011, which was $4.09 and vest in 20% increments over a 5 year period. Compensation expense recognized during 2011 in connection with this award was approximately $54,000. The fair value of the options granted was calculated using the Black-Scholes option valuation model with the following range of assumptions:
On January 12, 2011, the Company awarded 10 year options to key employees for 391,000 shares. These options have an exercise price equal to the closing price of the stock on January 12, 2011, which was $4.86 and vest in 25% increments over a 4 year period. Compensation expense recognized during 2011 in connection with this award was approximately $475,000. The fair value of the options granted was calculated using the Black-Scholes option valuation model with the following range of assumptions:
A summary of all 2010 issuances is as follows:
In January 2010 the Company awarded fully vested options to its non-employee directors for 32,667 shares in total for their service during 2009. The exercise price of the options is $2.21 per share based upon the closing price on January 28, 2010. The options have a remaining life of 8.1 years as of December 31, 2011. Compensation expense recognized during 2011 and 2010 in connection with this award was approximately $0 and $72,000, respectively. In January 2010 the Company also awarded 95,000 options to officers and key employees for their service during 2009. The exercise price of the options was also $2.21. These options vest over a 2 year period. Compensation expense recognized during 2011 and 2010 in connection with this award was approximately $97,000 and $96,000, respectively.
In February 2010 the Company awarded 500,000 options to non-employee directors for their service during 2010 subject to attendance and service requirements. These options vest over a 5 year period. The exercise price of these options is $2.82 based upon the closing price on February 23, 2010. Directors' fee expense recognized during 2011 and 2010 in connection with this award was approximately $103,000 and $221,000, respectively.
In June 2010 the Company awarded a 7 year option to purchase 10,000 shares of restricted stock to a key employee with a vesting period of 2 years. The exercise price of the options is $2.47 per share based upon the closing price on June 22, 2010. The options have a remaining life of 5.5 years as of December 31, 2011. Compensation expense recognized in connection with this award during 2011 and 2010 was approximately $12,000 and $6,200, respectively.
The fair value of the 2010 options granted was calculated using the Black-Scholes option valuation model with the following range of assumptions:
A summary of all 2009 issuances is as follows:
On January 2, 2009, the Company awarded fully vested options to its non-employee directors in the amount of 7,000 shares each for a total of 35,000 shares for their service during 2008. The exercise price of the options is $1.39 per share based upon the closing price on January 2, 2009. Compensation expense recognized in connection with this award was approximately $49,000 for the year ended December 31, 2009.
On January 26, 2009, the Company awarded fully vested options to two of its key employees in the amount of 2,000 shares each for a total of 4,000 shares for their continuing service. The exercise price of the options is $1.11 per share based upon the closing price on January 26, 2009. Compensation expense recognized in connection with this award was approximately $4,000 for the year ended December 31, 2009.
On July 2, 2009, the Company's Board terminated Mr. El Khalidi's option to purchase 400,000 shares of Company common stock with an exercise price of $1.00 per share (the “Option”) as had been authorized by a board resolution, dated October 10, 1995, (the “1995 Resolution”) and resolved that the Option granted by the Company to Hatem El Khalidi pursuant to the 1995 Resolution was officially terminated in all respects and should be removed from the Company's books and records. The Board next considered Mr. El Khalidi's efforts related to the mining project in southwestern Saudi Arabia in conjunction with his retirement as Chief Executive Officer of the Company on June 30, 2009, and after discussion, the Board documented its sincere appreciation of Mr. El Khalidi's efforts related to the mining project and issued two stock options to Mr. El Khalidi and his wife, Ingrid El Khalidi, tied to the performance of AMAK as follows: (1) an option to purchase 200,000 shares of the Company's common stock with an exercise price of $3.40 per share, equal to the closing sale price of such a share as reported on the Nasdaq National Market System on July 2, 2009, provided that said option may not be exercised until such time as the first shipment of ore from the Al Masane mining project is transported for commercial sale by AMAK, and further that said option shall terminate and be immediately forfeited if not exercised on or before June 30, 2012; and (2) an option to purchase 200,000 shares of the Company's common stock with an exercise price equal to the closing sale price of such a share as reported on the Nasdaq Stock Market on July 2, 2009, provided that said option may not be exercised until such time as the Company receives its first cash dividend distribution from AMAK, and further that said option shall terminate and be immediately forfeited if not exercised on or before June 30, 2019. Compensation expense of approximately $97,000, $373,000 and $186,000 was recognized during the years ended December 31, 2011, 2010, and 2009, respectively, related to the options awarded to Mr. El Khalidi. On May 9, 2010, the Board of Directors determined that Mr. El Khalidi forfeited these options and other retirement benefits when he made various demands against the Company and other AMAK Saudi shareholders which would benefit him personally and were not in the best interests of the Company and its shareholders. As discussed in Note 13 the Company is currently in certain disputes with Mr. El Khalidi and in connection therewith, the Company is currently reviewing its legal right to withdraw the options and benefits. However, as of December 31, 2011, these options and benefits continue to be shown as outstanding.
The fair value of the 2009 options granted was calculated using the Black-Scholes option valuation model with the following range of assumptions:
A summary of the status of the Company's stock option awards is presented below:
The aggregate intrinsic value of options was calculated as the difference between the exercise price of the underlying awards and the quoted price of our common stock. At December 31, 2011, options to purchase approximately 1.3 million shares of common stock were in-the-money.
The weighted average grant-date fair value per share of options granted during the years 2011, 2010, and 2009 was $4.43, $2.69 and $3.22, respectively. During 2011 the aggregate intrinsic value of options exercised was approximately $267,000 determined as of the date of option exercise. No options were exercised during 2010 or 2009.
The Company received $107,906 in cash from the exercise of options. The tax benefit realized from the exercise was insignificant.
A summary of the status of the Company's non-vested options is presented below:
Total fair value of options that vested during 2011 was approximately $343,000.
As of December 31, 2011, there was approximately $3.1 million of unrecognized compensation costs related to non-vested share-based compensation that is expected to be recognized over a weighted average period of 3.6 years.
The Company expects to issue shares upon exercise of options from its authorized but unissued common stock.
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