Note 11- Employee Benefit Plans | 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] | ' |
(11) Employee Benefit Plans |
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(a) Retirement Plan |
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The Company has a defined contribution 401(k) plan for all employees. Under the 401(k) plan, employees are permitted to make contributions to the plan in accordance with IRS regulations. The Company may make discretionary contributions as approved by the Board of Directors. The Company contributed $13,000 and $134,000 during 2013 and 2012, respectively. |
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(b) Restricted Stock Units |
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During 2004, the Company adopted the Omnibus Long-Term Incentive Plan (the “Omnibus Plan”) and the Non-Employee Directors Plan (the “Directors Plan”). During 2011, the Company’s stockholders approved an amendment to the Omnibus Plan to increase the number of shares available for grant by 250,000, as adjusted for the 1-for-12 reverse stock split. Under the Omnibus Plan, the Company may grant up to 445,833 stock options, stock appreciation rights, restricted stock awards, performance awards, and other stock awards, as adjusted for the 1-for-12 reverse stock split. Under the Directors Plan, the Company may grant up to 33,333 stock options, stock appreciation rights, restricted stock awards, performance awards, and other stock awards, as adjusted for the 1-for-12 reverse stock split. |
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Under the Directors Plan and the Omnibus Plan, the Company has awarded Restricted Stock Units (“RSUs”). Unearned compensation is measured at fair market value on the date of grant and recognized as compensation expense over the period in which the RSUs vest. All RSUs awarded to employees under the Omnibus Plan vest ratably over three or four years, depending on the terms of each individual award or, on a pro rata basis, upon the employee’s death, disability or termination without cause or, in full, upon a change in control of the Company. RSUs awarded to board members upon their election or re-election to the board under the Directors Plan vest 100% upon the three-year anniversary of the grant date. RSUs awarded to board members upon their election or re-election to the board under the Omnibus Plan vest ratably over three years. RSUs awarded to board members upon their appointment as board chairman or to a board committee vest 100% upon the anniversary of the grant date. All RSUs awarded to board members may vest earlier, on a pro rata basis, upon the director’s death, disability, or retirement or, in full, upon a change in control of the Company. |
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On June 11, 2007, pursuant to the terms of the employment agreement dated May 1, 2007 by and between the Company and Michael D. Heil, Mr. Heil was awarded 83,333, as adjusted for the 1-for-12 reverse stock split, RSUs outside of the Company’s 2004 Directors Plan and 2004 Omnibus Plan as an inducement award without stockholder approval pursuant to NASDAQ Marketplace Rule 5635(c)(4). Pursuant to the terms of Mr. Heil’s agreement, 41,667 of the RSUs vested in increments of 10,417 shares per year effective on June 11, 2008, June 11, 2009, June 11, 2010 and June 11, 2011. On March 19, 2008, the vesting terms for the remaining 41,667 RSUs, as adjusted for the 1-for-12 reverse stock split, granted to Mr. Heil were amended to provide time-based vesting, pursuant to which 10,417 shares vested on each of March 19, 2009, March 19, 2010, March 19, 2011, and March 19, 2012. |
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As part of the acquisition of Adapt, on August 6, 2010, the Company entered into three one-year employment agreements with the three founders and key employees of Adapt. Each of these key employees received grants of 16,667 RSUs, as adjusted for the 1-for-12 reverse stock split, outside of the Company’s 2004 Directors Plan and 2004 Omnibus Plan as an inducement award without stockholder approval pursuant to NASDAQ Marketplace Rule 5635(c)(4) that vested 33% on August 6, 2011, and 33% on August 6, 2012. The remaining 34% vested on August 6, 2013. |
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As part of the acquisition of Aerial7, on October 7, 2010, the Company entered into employment agreements with a three year term with the three founders and key employees of Aerial7. Each of these three key employees received grants of 12,500 RSUs, as adjusted for the 1-for-12 reverse stock split, outside of the Company’s 2004 Directors Plan and 2004 Omnibus Plan as an inducement award without stockholder approval pursuant to NASDAQ Marketplace Rule 5635(c)(4). Each of these RSU grants vest in equal annual installments of 4,167 RSUs, with the first vesting event occurring on October 7, 2011, the second vesting event occurring on October 7, 2012 and the remaining vesting event scheduled to occur on October 7, 2013. On January 15, 2013, one of the three key employees departed the Company, resulting in the acceleration of a pro-rata portion of the RSUs that were unvested at the time of his departure. On August 23, 2013, the remaining key employees departed the Company, resulting in the acceleration of their remaining RSUs that were unvested at the time of their departures. |
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In connection with the tender offer by Steel Excel Inc. (“Steel”) to acquire up to 1,316,866 of the outstanding shares of the Company’s common stock, representing a 44.7% ownership position in the Company on a fully-diluted basis, at a price of $3.95 per share (the “Offer”), the Company’s Board of Directors (the “Board”) approved the conditional acceleration of full vesting of outstanding RSUs upon the commencement of the Offer. Accordingly, upon the consummation of the Offer, $255,000 unrecognized compensation cost related to stock options and RSUs was recognized on August 23, 2013. The Company determined that there was no additional incremental value to recognize as compensation expense as a result of this award modification. |
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The following table summarizes information regarding restricted stock unit activity for the years ended December 31, 2012, as adjusted for the 1-for-12 reverse stock split, and December 31, 2013: |
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| | Directors Plan | | | Omnibus Plan | | | Inducement Grants | |
| | Number | | | Weighted | | | Number | | | Weighted | | | Number | | | Weighted | |
Average | Average | Average |
Value per Share | Value per Share | Value per Share |
Outstanding, January 1, 2012 | | | - | | | | - | | | | 78,346 | | | | 30.12 | | | | 68,750 | | | | 22.56 | |
Granted | | | - | | | | - | | | | 24,611 | | | | 4.64 | | | | - | | | | - | |
Canceled | | | - | | | | - | | | | (10,448 | ) | | | 34.49 | | | | - | | | | - | |
Released to common stock | | | - | | | | - | | | | (54,222 | ) | | | 17.5 | | | | (30,903 | ) | | | 20.16 | |
Released for settlement of taxes | | | - | | | | - | | | | (8,233 | ) | | | 27.55 | | | | (8,681 | ) | | | 20.16 | |
Outstanding, December 31, 2012 | | | - | | | | - | | | | 30,054 | | | | 31.2 | | | | 29,166 | | | | 25.8 | |
Granted | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
Canceled | | | - | | | | - | | | | (5,792 | ) | | | 30.38 | | | | (5,116 | ) | | | 23.28 | |
Released to common stock | | | - | | | | - | | | | (19,502 | ) | | | 30.61 | | | | (23,593 | ) | | | 21.62 | |
Released for settlement of taxes | | | - | | | | - | | | | (4,760 | ) | | | 33.38 | | | | (457 | ) | | | 21.62 | |
Outstanding, December 31, 2013 | | | - | | | $ | - | | | | - | | | $ | - | | | | - | | | $ | - | |
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For the years ended December 31, 2013 and 2012, the Company recorded in general and administrative expense pre-tax charges of $758,000 and $1,534,000 associated with the expensing of restricted stock unit and option activity. |
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As of December 31, 2013, all RSUs were vested and all compensation expense recognized. |
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(c) Stock Options |
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In 1996, the Company adopted the Incentive Stock Option Plan (the “1996 Plan”). The 1996 Plan terminated on April 30, 2008. The options under the 1996 Plan and the Omnibus Plan were granted at the fair market value of the Company’s stock at the date of grant as determined by the Company’s Board of Directors. Options become exercisable over varying periods up to 3.5 years and expire at the earlier of termination of employment or up to six years after the date of grant. At December 31, 2013, there were no shares available for grant under the 1996 Plan and Director Plan and 232,832 shares available under the Omnibus Plan, as adjusted for the 1-for-12 reverse stock split. |
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The Company did not grant any stock options during the year ended December 31, 2013. The Company granted 153,333 stock options during the year ended December 31, 2012, as adjusted for the 1-for-12 reverse stock split. |
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Upon the consummation of the Offer, referenced in Note 11(b) above, $219,000 unrecognized compensation cost related to stock options was recognized on August 23, 2013. The Company determined that there was no additional incremental value to recognize as compensation expense as a result of this award modification. |
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The following table summarizes information regarding stock option activity for the years ended December 31, 2012, as adjusted for the 1-for-12 reverse stock split, and December 31, 2013: |
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| | Number of Options | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term | | | Aggregate Intrinsic Value (In Thousands) | | | | | | | | | |
Outstanding, January 1, 2011 | | | - | | | $ | - | | | | - | | | | - | | | | | | | | | |
Granted | | | - | | | $ | - | | | | - | | | | - | | | | | | | | | |
Canceled | | | - | | | $ | - | | | | - | | | | - | | | | | | | | | |
Exercised | | | - | | | $ | - | | | | - | | | | - | | | | | | | | | |
Outstanding, January 1, 2012 | | | - | | | $ | - | | | | - | | | | - | | | | | | | | | |
Granted | | | 153,333 | | | $ | 9 | | | | 9.29 | | | | - | | | | | | | | | |
Canceled | | | (65,833 | ) | | $ | 9 | | | | 9.29 | | | | - | | | | | | | | | |
Exercised | | | - | | | $ | - | | | | | | | | - | | | | | | | | | |
Outstanding December 31, 2012 | | | 87,500 | | | $ | 9 | | | | 9.27 | | | | - | | | | | | | | | |
Granted | | | - | | | $ | - | | | | - | | | | - | | | | | | | | | |
Canceled | | | (70,833 | ) | | $ | 9 | | | | - | | | | - | | | | | | | | | |
Exercised | | | - | | | $ | - | | | | | | | | - | | | | | | | | | |
Outstanding, December 31, 2013 | | | 16,667 | | | $ | 9 | | | | 8.29 | | | | - | | | | | | | | | |
Exercisable at December 31, 2013 | | | 16,667 | | | $ | 9 | | | | 8.29 | | | | - | | | | | | | | | |
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As of December 31, 2013, there was no unrecognized compensation cost related to non-vested stock options. |
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The aggregate intrinsic value of stock options exercised during the years ended December 31, 2013 and December 31, 2012 was zero. |
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The Company did not grant any stock options during the years ended December 31, 2013. The weighted average fair value of options granted in the year ended December 31, 2012 was $0.51. The fair value of the stock options was determined using the Black-Scholes option valuation model, which relied on the following key assumptions with respect to the options granted during the respective periods: |
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| | Year Ended | | | | | | | | | | | | | | | | | | | | | |
December 31, | | | | | | | | | | | | | | | | | | | | |
2012 | | | | | | | | | | | | | | | | | | | | |
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Weighted average risk-free interest rate | | | 1.21 | % | | | | | | | | | | | | | | | | | | | | |
Expected life of the options (in years) | | | 6.41 | | | | | | | | | | | | | | | | | | | | | |
Expected stock price volatility | | | 76.01 | % | | | | | | | | | | | | | | | | | | | | |
Expected dividend yield | | | - | | | | | | | | | | | | | | | | | | | | | |
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The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. The risk-free interest rate is based on the U.S. Treasury security rate in effect as of the date of grant. The expected term of the options and stock price volatility are based on historical data of the Company. |
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(d) Preferred Stock and Dividends |
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On June 20, 2013, the Company entered into an Amended and Restated Rights Agreement with its transfer agent, which amended and restated the Company’s previous Rights Agreement dated as of June 11, 2003, as amended, scheduled to expire on June 23, 2013. In connection with the Company’s entering into the Amended and Restated Rights Agreement, the Board declared a dividend of one preferred share purchase right (a “ Right” and collectively, the “Rights” ) for each outstanding share of common stock, par value $0.01 per share, of the Company to stockholders of record at the close of business on June 30, 2013. |
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The Rights granted under the Amended and Restated Rights Agreement are intended to establish a deterrent to any person acquiring 4.9% or more of the outstanding shares of the Company’s common stock, or any existing 4.9% or greater holder from acquiring any additional shares representing 1.0% or more of the then outstanding common stock, in each case, without the approval of the Board, in an effort to preserve the Company’s net operating losses and other similar tax attributes against potential limitations presented by stock ownership changes. |
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Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series H Junior Participating Preferred Stock (“Preferred Stock”), par value $0.01 per share, of the Company’s preferred stock at a price of $6.75 per one one-thousandth of a share. The Rights become exercisable only, however, after any person acquires, or announces intention to acquire via a tender or exchange offer, 4.9% or more of the Company's outstanding shares of common stock. Prior to such time, the Board may redeem the Rights in whole, but not in part, at a redemption price of $0.01 per Right payable in cash, shares of the Company’s common stock or another form of consideration at the option of the Company. Immediately upon the redemption of any Rights, the holder’s right to exercise such Rights will terminate and the holder will be entitled only to receive the redemption price. |
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Until a Right is exercised or exchanged, the holder thereof, as such, will have no additional rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends. |
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Shares of Preferred Stock issued upon exercise of the Rights will not be redeemable. Each share of Preferred Stock will be entitled, when, as and if declared, to a minimum preferential quarterly dividend payment of the greater of (a) $10 per share, and (b) an amount equal to 1,000 times the dividend declared per share of common stock. In the event of liquidation, dissolution or winding up of the Company, the holders of the Preferred Stock will be entitled to a minimum preferential payment of the greater of (a) $1,000 per share (plus any accrued but unpaid dividends), and (b) an amount equal to 1,000 times the payment made per share of common stock. Each share of Preferred Stock will have 1,000 votes, voting together with the common stock. Finally, in the event of any merger, consolidation or other transaction in which outstanding shares of common stock are converted or exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the amount received per share of common stock. These rights are protected by customary anti-dilution provisions. |
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At December 31, 2013 and December 31, 2012, 15,000,000 shares of Preferred Stock were authorized. There were no shares of Preferred Stock issued and outstanding at December 31, 2013 and December 31, 2012. |