Stock Options and Warrants | 6 Months Ended |
Jun. 30, 2014 |
Stock Options and Warrants [Abstract] | ' |
Stock Options and Warrants | ' |
STOCK OPTIONS AND WARRANTS |
Stock options - Stock option activity for the six month periods ended June 30, 2014 and June 30, 2013 follows (prices in Canadian dollars designated with "C$"): |
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| Six Month Periods Ended |
| 30-Jun-14 | 30-Jun-13 |
| Number | | Avg. Price | Number | | Avg. Price |
Outstanding, beginning of period | 224,623 | | C$ | $6.05 | 133,955 | | C$ | $5.76 |
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Granted | 175,000 | | | $13.26 | 91,668 | | C$ | $6.45 |
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Exercised | — | | | | — | | | |
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Outstanding, end of period | 399,623 | | | * | 225,623 | | C$ | $6.05 |
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* - Avg. Price not computed due to currency differences. |
Information about options outstanding at June 30, 2014 is as follows: |
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Grant Date | Expiration Date | Number Outstanding | Number Exercisable | | | |
March 18, 2010 | March 15, 2020 | 9,700 | | 9,700 | | | | |
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January 18, 2011 | January 18, 2021 | 123,255 | | 123,255 | | | | |
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January 11, 2013 | January 11, 2023 | 91,668 | | 30,557 | | | | |
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March 6, 2014 | March 6, 2024 | 175,000 | | — | | | | |
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Total | | 399,623 | | 163,512 | | | | |
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The options granted on March 18, 2010 have an exercise price of C$3.00 per share. These options were granted to directors of Atlas' predecessor company, JJR VI. |
On January 18, 2011, Atlas granted options to purchase 123,255 ordinary voting common shares of Atlas stock to officers and directors at an exercise price of C$6.00 per share. The options vest 25% at date of grant and 25% on each of the next three anniversary dates and expire on January 18, 2021. Using the Black-Scholes option pricing model, the weighted average grant date fair value of these options is C$3.72 per share. |
On January 11, 2013, Atlas granted options to purchase 91,668 ordinary voting common shares under the Company’s stock option plan, all of which were granted to the Company’s officers. The granted options have an exercise price of C$6.45 and vest equally on the first, second and third anniversaries of the grant date. The options expire on January 11, 2023. Using the Black-Scholes option pricing model, the weighted average grant date fair value of these options is C$4.54 per share. |
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On March 6, 2014, Atlas granted options to purchase 175,000 ordinary voting common shares under the Company’s Equity Incentive Plan, all of which were granted to the Company’s officers. The granted options have an exercise price of $13.26 and vest equally on the first, second and third anniversaries of the grant date. The options expire on March 6, 2024 . Using the Black-Scholes option pricing model, the weighted average grant date fair value of these options is $7.03 per share. |
The Black-Scholes option pricing model was used to estimate the fair value of compensation expense using the following assumptions – risk-free interest rate 1.88% to 3.18%; dividend yield 0.0%; expected volatility 38% to 100%; expected life of 6 to 10 years. |
In accordance with Accounting Standard Codification 718 (Stock-Based Compensation), Atlas has recognized stock compensation expense on a straight-line basis over the requisite service period of the last separately vesting portion of the award. In the six month period ended June 30, 2014, Atlas recognized $262,000 in expense compared to $122,000 in the six month period ended June 30, 2013. Stock compensation expense is a component of other underwriting expenses on the income statement. Total unrecognized stock compensation expense related to all option grants is $1.4 million as of the six months ended June 30, 2014, which will be recognized over the next 32 months. |
The weighted average exercise price of all the shares exercisable at June 30, 2014 is C$6.05 on outstanding options granted prior to December 31, 2013 and $13.26 on outstanding options granted after January 1, 2014 versus C$6.05 at December 31, 2013. The grants have a weighted average remaining life of 8.4 years and the stock options outstanding have an intrinsic value of $2.5 million as of June 30, 2014. |
In the second quarter of 2013, a new Equity Incentive Plan was approved by Shareholders at the Annual General Meeting. Atlas will cease to grant new stock options under the preceding Stock Option Plan. The Equity Incentive Plan is a new securities based compensation plan, pursuant to which Atlas may issue restricted stock grants for ordinary voting common shares, restricted units, stock grants for ordinary voting common shares, stock options and other forms of equity incentives to eligible persons as part of their compensation. The Equity Incentive Plan is considered an amendment and restatement of the Stock Option Plan, although outstanding stock options issued pursuant to the Stock Option Plan will continue to be governed by the terms of the Stock Option Plan. |
Under the Equity Incentive Plan, a director who either directly or indirectly purchases up to $100,000 of Atlas ordinary voting common stock on the open market, through the employee stock purchase plan, or via other means acceptable under this plan (see note 13) will receive a 3 to 1 matching grant of restricted stock grants for ordinary voting common shares (or for Canadian taxpayers, restricted stock units) based on the aggregate purchase price of ordinary voting common shares the director purchased during the six-month period beginning on June 18, 2013 and ending on December 31, 2013, or for new directors within 6 months of their initial appointment date (the “Purchase Period”). Matching share grants of 148,152 restricted stock grants for ordinary voting common shares and 37,038 restricted stock units were made on February 28, 2014 (the “Grant Date”). The number of ordinary voting common shares issued on the Grant Date were determined by dividing (A) the dollar amount of the Company matching contribution due based on purchases during the Purchase Period by (B) the closing common share price of one share of Company ordinary voting common stock at close of market on June 17, 2013 (the “Closing Price”) which was $8.10 per share. The restricted stock grants for ordinary voting common shares will vest 20% on each anniversary of the Grant Date, subject to the terms of the Guidelines. The matching grant will be subject to all of the terms and conditions of the Equity Incentive Plan and applicable grant agreements. The Company will incur $25,000 of compensation expense per month relating to these restricted grants for ordinary voting common shares. As of the six month period ended June 30, 2014, the Company has expensed $100,000. |
Warrants - On November 1, 2010, 1,327,840 subscription receipts were issued in a private placement for ordinary voting common shares of Atlas as well as warrants to purchase 1,327,840 ordinary voting common shares of Atlas for C$6.00 per share. The subscription receipts were converted to Atlas ordinary voting common shares at Atlas' formation. During 2013, all outstanding warrants were exercised prior to their expiration on December 31, 2013. |