| Stockholders' Equity: | 9. Stockholders' Equity:
Repurchase of Stock:
On September 14, 2015, our board of directors approved a new stock repurchase program authorizing the repurchase of shares of our common stock in the open market or in privately negotiated purchases, or both, at an aggregate purchase price of up to $10 million. The timing and amount of any share repurchases will be determined by our management based on market conditions and other factors. The share repurchase program is expected to be completed by December 31, 2016. Under this program, we may from time to time purchase our outstanding common stock in the open market at management's discretion, subject to share price, market conditions and other factors. The common stock repurchase program does not obligate us to repurchase any dollar amount or number of shares. During 2015, we repurchased 629,000 shares of our common stock at a total purchase price of $4.8 million under this program.
Stock Compensation Plans:
In May 2011, our shareholders approved our 2011 Incentive Compensation Plan ("2011 Plan"). The 2011 plan replaced our existing 2009 Incentive Compensation Plan ("2009 Plan") and 2000 Director Stock Option Plan (the "Director Plan"), each of which terminated upon approval of the 2011 Plan on May 12, 2011. We reserved up to 750,000 initial shares of our common stock for possible issuance under the 2011 Plan and 303,943 shares remaining available for future grants under the 2009 Plan. Awards under the 2011 Plan may consist of options (non-qualified and incentive stock options), stock appreciation rights, or SARs, restricted stock units, performance units, dividend equivalents, annual incentive awards and other share-based awards as determined by our compensation committee. The terms and conditions of each award are set in an award agreement as determined by the compensation committee.
On May 20, 2015, our shareholders approved an amendment to the 2011 Plan (the "2011 Plan") that increased the number of shares of common stock that may be issued pursuant to awards thereunder from 1,553,943 shares to 2,553,943 shares. As of December 31, 2015, there were 1,391,321 shares available for grant under the 2011 Plan.
Time-based Restricted Stock Grants under the Company's 2011 Plan:
Under the 2011 Plan, eligible employees may be awarded shares of restricted stock. These shares generally vest three to four years after issuance, subject to continuous employment and certain other conditions. In 2015, 2014, and 2013, we issued 298,000, 319,900, and 273,500 shares, respectively, of time-based restricted stock to our executive management and certain other employees. Restricted shares are valued at the closing price of our stock on the date of grant and are expensed over the vesting period. Unrecognized compensation expense related to the non-vested stock grants was $3.3 million at December 31, 2015 and is expected to be recognized through February 2019. Compensation expense related to these restricted stock grants was $3.2 million in 2015, $1.9 million in 2014, and $1.9 million in 2013.
Under the Deferred Stock Unit ("DSU") Master Agreements, each member of the board of directors may elect to receive DSUs with a fair value equivalent to a percentage of each quarterly installment of the annual cash retainer for non-employee directors to which that member would otherwise be entitled for service as a Datalink director during 2015. In addition, each member of the board of directors may elect to receive a DSU award equal to a percentage of the award of shares of Restricted Stock to which that member would otherwise have been entitled as the equity component of the 2015 annual retainer. The DSUs and DSU awards vest and become non-forfeitable on each of June 30, 2015, September 30, 2015, December 31, 2015 and March 31, 2016, provided the board member remains in service with us. We will issue one share in payment and settlement of each vested DSU subject to the Master DSU Agreement following a termination of that board member's service with Datalink.
In 2015, 2014, and 2013, we issued 40,684, 40,804, and 36,000 awards of fully vested common stock to members of the Board of Directors, respectively. Of the 40,684 shares of fully vested stock awarded to members of our Board of Directors during the year ended December 31, 2015, 16,684 shares were DSUs. Of the 40,804 shares of fully vested stock awarded to members of our Board of Directors during the year ended December 31, 2014, 15,646 shares were DSUs. Our non-employee directors receive 6,000 shares of restricted stock for their Board service. We issue the annual restricted stock grants on June 30 of each year and they vest one-quarter upon issuance and one-quarter on the following September 30, December 31, and March 31, respectively, provided that the director is still a member of the Board on that date. As of December 31, 2015, 9,000 shares of the 2015 restricted stock grant were not vested. The 2014 and 2013 awards to our directors have all vested. For 2015, 2014, and 2013, total compensation expense for these awards was approximately $347,000, $484,000, and $424,000, respectively.
Performance-based Restricted Stock Grants under the Company's 2011 Plan, 2009 Plan and Director Plan:
Under the 2011 Plan, we are able to grant performance-based awards of restricted stock to our employees. The purpose of the performance-based grants is to retain key employees and to align key management with shareholders' interests.
On March 4, 2015, we awarded 83,403 shares of restricted stock and 83,407 performance stock unit awards pursuant to our 2011 Plan to executive management. These shares vest as follows: the performance stock unit awards one-third, or 27,802 shares, upon achievement of 150% of the non-GAAP operating income target of $40.8 million for 2015 as certified by the compensation committee in 2016; one-third when we publicly announce 2016 earnings in 2017; and one-third when we publicly announce 2017 earnings in 2018. We did not achieve our 2015 non-GAAP operating income target, so these performance stock unit awards did not vest. The 83,403 restricted stock grant remaining, is subject to time-based vesting (one-half on the second anniversary of the grant date, one-quarter on the third anniversary of the grant date, and one-quarter on the fourth anniversary of the grant date), provided that the individual remains employed by us on these vesting dates. The total fair value of the shares that have not vested under this award is $2.0 million, comprised of $987,000 for the time-based awards and $988,000 for the performance-based awards. We are amortizing the $987,000 value of the time-based shares that have not vested as follows: (1) $493,500 through the second anniversary of the grant date (2) $246,750 over the three-year vesting period and (3) $246,750 over the four-year vesting period. For the performance-based shares, since the non-GAAP operating income target was not met no compensation expense related to these performance stock units will be amortized. Unrecognized compensation expense related to the time-based restricted stock grants in this award was $662,000 at December 31, 2015 and is expected to be recognized through February 2019. Compensation expense related to these restricted stock grants was $326,000 for the year ended December 31, 2015.
On February 11, 2015, we awarded 426,000 shares of restricted stock pursuant to our 2011 Plan to certain managers. These shares vest as follows: 95,500 shares vest in full upon each individual manager's achievement of gross profit or operating income objectives for 2015 and upon publicly announcing our 2015 results. The remaining 330,500 shares are subject to time-based vesting (one-third of this subtotal on the first anniversary of the grant date, one-third of this subtotal on the second anniversary of the grant date, and one-third of this subtotal on the third anniversary of the grant date), provided that the individual remains employed by us on these vesting dates. We are amortizing the $3.9 million fair value of the time-based awards as follows: (1) $1.3 million through the first anniversary of the grant date (2) $1.3 million over the two-year vesting period and (3) $1.3 million over the three-year vesting period. For the performance-based shares, the individual managers did not achieve their gross profit or operating income objectives for 2015 so these restricted stock grants did not vest. The total fair value of the shares that did not vest under this award was $1.1 million for the performance-based awards. For these performance-based shares, since the gross profit or operating income targets were not met, no compensation expense related to these performance-based restricted stock grants will be amortized. Unrecognized compensation expense related to the time-based restricted stock grants in this award was $1.7 million at December 31, 2015 and is expected to be recognized through February 2018. Compensation expense related to these restricted stock grants was $2.0 million for the year ended December 31, 2015.
On August 15, 2014, we awarded 15,000 shares of restricted stock pursuant to our 2011 Plan to one executive manager. These shares vest as follows: two-thirds, or 10,000 shares, upon achievement of 150% of the non-GAAP operating income target of $32.3 million for 2014. We achieved 90% of the 2014 non-GAAP operating income target, which equated to a final 4,000 performance-based shares, which vest as follows: one-third vested upon announcement of the non-GAAP operating income target, one-third vested on the first anniversary of the announcement, and the last third of this subtotal will vest on the second anniversary of the announcement. The remaining one-third of this grant, or 5,000 shares, is subject to time-based vesting (one-third of this subtotal on the first anniversary of the grant date, one-third of this subtotal on the second anniversary of the grant date, and the last third of this subtotal on the third anniversary of the grant date), provided that the individual remains employed by us on these vesting dates. We are amortizing the $175,050 fair value of the shares that have not vested as follows: $58,350 for the time-based awards and $116,700 for the performance-based awards. We are amortizing the $58,350 fair value of the time-based shares that have not vested as follows: (1) $19,450 through the first anniversary of the grant date (2) $19,450 over the two-year vesting period and (3) $19,450 over the three-year vesting period. For the performance-based shares, we are only subjecting to amortization the portion that was attained based on its achievement of 90% of non-GAAP operating income during 2014. The corresponding fair value of the 4,000 performance-based shares the executive manager attained is $46,680 and will vest as follows: (1) $15,560 over the 14-month period for the achievement of the performance objectives and remaining employed by us through the announcement of 2014 financial results, (2) $15,560 over the two-year vesting period (3) $15,560 over the three-year vesting period. Unrecognized compensation expense related to both the performance-based and time-based restricted stock grants in this award was $24,900 at December 31, 2015 and is expected to be recognized through August 2017. Compensation expense related to these restricted stock grants was $48,900 and $31,000 for the year ended December 31, 2015 and 2014, respectively.
On August 12, 2014, we awarded 140,000 shares of restricted stock pursuant to our 2011 Plan to certain managers. One-half of these awards, or 70,000 shares, vest upon each individual manager's achievement of revenue or gross profit objectives for 2014 and remaining employed by us through December 31, 2015. The remaining one-half of these awards, or 70,000 shares, is subject to time-based vesting (50% upon the second grant anniversary date, 25% upon the third grant anniversary date and 25% upon the fourth grant anniversary date), provided that the individual remains employed by us on these vesting dates. The total fair value of the shares that have not vested under these awards is $1.6 million, comprised of $809,200 for the time-based awards and $809,200 for the performance-based awards. We are amortizing the $809,200 fair value of the time-based shares that have not vested as follows: (1) $404,600 through the second anniversary of the grant date (2) $202,300 over the three-year vesting period and (3) $202,300 over the four-year vesting period. For the performance-based shares, we are only subjecting to amortization the portion that was attained based on each individual manager's achievement of revenue and gross profit objectives during 2014. The corresponding fair value of the 17,500 performance-based shares these managers attained is $202,000, which will vest ratably over the 17-month period for the achievement of the performance objectives and remaining employed by us through December 31, 2015. Unrecognized compensation expense related to both the performance-based and time-based restricted stock grants in this award was $342,000 at December 31, 2015 and is expected to be recognized through August 2018. Compensation expense related to these restricted stock grants was $378,000 and $175,000 for the year ended December 31, 2015 and 2014, respectively.
On December 23, 2013, we awarded 171,408 shares of restricted stock pursuant to our 2011 Plan to executive management. These shares vest as follows: two-thirds, or 114,272 shares, upon achievement of 150% of the non-GAAP operating income target of $32.3 million for 2014, with such percentages adjusted according to the matrix approved by our compensation committee during the December 23, 2013 meeting. We achieved 90% of the 2014 non-GAAP operating income target, which equated to a final 45,708 performance-based shares, which vest as follows: one-third vested upon announcement of the non-GAAP operating income target, one-third vested on the first anniversary of the announcement, and the last third of this subtotal will vest on the second anniversary of the announcement. The remaining one-third of this grant, or 57,136 shares, is subject to time-based vesting (one-third of this subtotal on the first anniversary of the grant date, one-third of this subtotal on the second anniversary of the grant date, and the last third of this subtotal on the third anniversary of the grant date), provided that the individual remains employed by us on these vesting dates. We are amortizing the $1.9 million fair value of the shares that have not vested as follows: $633,000 for the time-based awards and $1.3 million for the performance-based awards. We are amortizing the $633,000 fair value of the time-based shares that have not vested as follows: (1) $211,000 through the first anniversary of the grant date (2) $211,000 over the two-year vesting period and (3) $211,000 over the three-year vesting period. For the performance-based shares, we are only subjecting to amortization the portion that was attained based on its achievement of 90% of non-GAAP operating income during 2014. The corresponding fair value of the 45,658 performance-based shares executive management attained is $507,000 and will vest as follows: (1) $169,000 over the 14-month period for the achievement of the performance objectives and remaining employed by us through the announcement of 2014 financial results, (2) $169,000 over the two-year vesting period (3) $169,000 over the three-year vesting period. Unrecognized compensation expense related to both the performance-based and time-based restricted stock grants in this award was $141,000 at December 31, 2015 and is expected to be recognized through February 2017. Compensation expense related to these restricted stock grants was $326,000, $656,000 and $15,000 for the years ended December 31, 2015, 2014 and 2013, respectively.
On March 11, 2013, we awarded 36,000 shares of restricted stock pursuant to its 2011 Plan to certain managers. The restricted stock vests as follows: (1) 50% upon the achievement of our income or gross profit objectives for 2013 and remaining employed by Datalink through December 31, 2014, (2) 25% upon the second grant anniversary date (3) 12.5% upon the third grant anniversary date and (4) 12.5% upon the fourth grant anniversary date. We are amortizing the $382,000 fair value of the shares that have not vested as follows: (1) $191,000 over the 22-month period for the achievement of the performance objectives and remaining employed by Datalink through December 31, 2014, (2) $95,000 over the two-year vesting period (3) $48,000 over the three-year vesting period and (4) $48,000 over the four-year vesting period. Unrecognized compensation expense related to the restricted stock grants was $13,000 at December 31, 2015 and is expected to be recognized through March 2017. Compensation expense related to these restricted stock grants was $27,000, $78,000 and $144,000 for the years ended December 31, 2015, 2014 and 2013, respectively.
On December 4, 2012, we awarded approximately 163,000 shares of restricted stock pursuant to our 2011 Plan to executive management. The restricted stock vests as follows: (1) 50% upon the achievement of our predetermined earnings from operations objective for 2013 as approved by our Board of Directors and assuming the individual employee remained employed by Datalink through December 31, 2014, (2) 25% upon the second grant anniversary date, (3) 12.5% upon the third grant anniversary date and (4) 12.5% upon the fourth grant anniversary date. We are amortizing the $1.4 million fair value of the shares that have not vested as follows: (1) $680,000 over a 25-month period for the achievement of the performance objectives and assuming the individual employee remained employed by Datalink through December 31, 2014, (2) $340,000 over the two-year vesting period, (3) $170,000 over the three-year vesting period and (4) $170,000 over the four-year vesting period. Unrecognized compensation expense related to the non-vested stock grants was $34,000 at December 31, 2015 and is expected to be recognized through November 2016. Compensation expense related to these restricted stock grants was $83,000, $514,000 and $519,000 for the years ended December 31, 2015, 2014, and 2013, respectively.
On October 4, 2012, we awarded 45,000 shares of restricted stock pursuant to our 2011 Plan to certain managers. The restricted stock vests as follows: (1) 50% upon the achievement of our income or gross profit objectives for 2012 and having remained employed by Datalink through the announcement of the 2012 financial results, (2) 25% upon the second grant anniversary date and (3) 25% upon the third grant anniversary date. We are amortizing the $386,000 fair value of the shares that have not vested as follows: (1) $193,000 over the 4.5-month period for the achievement of the performance objectives and having remained employed by Datalink through the announcement of 2012 financial results, (2) $96,500 over the two-year vesting period and (3) $96,500 over the three-year vesting period. There was no unrecognized compensation expense related to the restricted stock grants as it was fully recognized in September 2015. Compensation expense related to these restricted stock grants was $24,000, $68,000 and $80,000 for the years ended December 31, 2015, 2014 and 2013, respectively.
On February 22, 2012, we awarded approximately 173,000 shares of restricted stock pursuant to our 2011 Plan to certain members of its executive management team. The restricted stock vests as follows: (1) 50% upon the achievement of our predetermined earnings from operations objective for 2012 as approved by its Board of Directors and assuming the individual employee remained employed by Datalink through December 31, 2013, (2) 25% upon the second grant anniversary date and (3) 25% upon the third grant anniversary date, provided in each case the individual is employed by Datalink on each vesting date. We are amortizing the $1.5 million fair value of the shares that have not vested as follows: (1) $750,000 over the 22.5-month period for the achievement of the performance objectives and assuming the individual employee remained employed by Datalink through December 31, 2013, (2) $375,000 over the two-year vesting period and (3) $375,000 over the three-year vesting period. There was no unrecognized compensation expense related to the restricted stock grants as it was fully recognized in February 2015. Compensation expense related to these restricted stock grants was $13,000, $115,000 and $191,000 for the years ended December 31, 2015, 2014 and 2013, respectively.
On July 17, 2011, we awarded 215,000 shares of restricted stock pursuant to our 2011 Plan to certain managers. The restricted stock vests as follows: (1) 39,000 upon the achievement of our income or gross profit objectives for 2011, (2) 88,000 upon the second grant anniversary date and (3) 88,000 upon the third grant anniversary date. We are amortizing the $1.6 million fair value of the restricted shares that have not vested as follows: (1) $292,000 over a 6-month vesting period for the achievement of the performance objectives, (2) $658,000 over the two-year vesting period and (3) $658,000 over the three-year vesting period. There was no unrecognized compensation expense related to these restricted stock grants at December 31, 2015. Compensation expense related to these restricted stock grants was $55,000 and $297,000 for the years ended December 31, 2014 and 2013, respectively.
On January 17, 2011, we awarded 209,000 shares of restricted stock pursuant to our 2011 Plan to executive management. The restricted stock vests as follows: (1) 104,500 shares upon the achievement of our predetermined earnings from operations objective for 2011 as approved by its Board of Directors and assuming the individual employee remained employed by Datalink through December 31, 2013, (2) 52,250 upon the second grant anniversary date and (3) 52,250 upon the third grant anniversary date. We are amortizing the $1.2 million fair value of the restricted stock as follows: (1) $612,000 over a 12 month vesting period for the achievement of the performance objectives, (2) $306,000 over the two-year vesting period and (3) $306,000 over the three-year vesting period. There was no unrecognized compensation expense related to these restricted stock grants at December 31, 2015. Compensation expense related to these restricted stock grants was $13,000 and $313,000 for the years ended December 31, 2014 and 2013, respectively.
The following table summarizes our restricted stock activity for the periods indicated below:
Number of Shares
Weighted Average Grant-Date Fair Value
Restricted stock at January 1, 2013
$
Granted
$
Shares vested
)
$
Shares cancelled
)
$
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​
​
​
​
​
​
​
Restricted stock at December 31, 2013
$
Granted
$
Shares vested
)
$
Shares cancelled
)
$
​
​
​
​
​
​
​
​
Restricted stock at December 31, 2014
$
Granted
$
Shares vested
)
$
Shares cancelled
)
$
​
​
​
​
​
​
​
​
Restricted stock at December 31, 2015
$
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​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Stock Options:
We had no stock option grants in 2015, 2014, or 2013.
Total stock-based compensation expense related to stock options was $0, $0 and $134,000 for the years ended December 31, 2015, 2014, and 2013, respectively. At December 31, 2015 there were no unrecognized stock-based compensation expense related to stock options.
The following table summarizes activity under our stock option plans:
Outstanding Options
Number of Shares
Range of Exercise Prices
Weighted Average Exercise Price
Balance, December 31, 2012
$1.80 - $5.21
$
Options granted
—
—
$
—
Options exercised
)
$1.80 - $5.00
$
Options cancelled
)
$3.32 - $3.85
$
​
​
​
​
​
​
​
​
​
​
Balance, December 31, 2013
$3.32 - $5.21
$
Options granted
—
—
$
—
Options exercised
)
$3.32 - $4.30
$
Options cancelled
—
—
$
—
​
​
​
​
​
​
​
​
​
​
Balance, December 31, 2014
$3.50 - $5.21
$
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
Options granted
—
—
$
—
Options exercised
)
$3.88 - $5.21
$
Options cancelled
—
—
$
—
​
​
​
​
​
​
​
​
​
​
Balance, December 31, 2015
$3.50 - $5.21
$
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​
​
​
​
​
​
​
​
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Options exercisable as of December 31, 2015
$3.50 - $5.21
$
The weighted average remaining contractual life of options outstanding at December 31, 2015 was 3.53 years. At December 31, 2015, the aggregate intrinsic value of options outstanding and exercisable was $1,497,023. Total intrinsic value of options exercised was $41,235, $202,670, and $568,335 for 2015, 2014, and 2013, respectively. |
