Note 9 - Accounting for Equity-Based Compensation | 6 Months Ended |
Jun. 30, 2014 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' |
NOTE I—ACCOUNTING FOR EQUITY-BASED COMPENSATION |
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Grants for Three Months Ended June 30, 2014 and June 30, 2013: |
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No employee stock options, stock appreciation rights (“SARs”) or restricted stock units (“RSU”) were granted during the three months ended June 30, 2014. The weighted average estimated fair value of employee stock options granted during the three months ended June 30, 2013 was $4.12, using the binomial model, with the following weighted average assumptions (annualized percentages): |
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| Three months ended | | | | | | | | | | | | | | | | | | | | | | | |
30-Jun-13 | | | | | | | | | | | | | | | | | | | | | | | |
Volatility | 46.06% | | | | | | | | | | | | | | | | | | | | | | | |
Risk-free interest rate | 1.45% | | | | | | | | | | | | | | | | | | | | | | | |
Dividend yield | 0% | | | | | | | | | | | | | | | | | | | | | | | |
Pre-vest cancellation rate | 2.79% | | | | | | | | | | | | | | | | | | | | | | | |
Post-vest cancellation rate | 1.10% | | | | | | | | | | | | | | | | | | | | | | | |
Suboptimal exercise factor | 2.14 | | | | | | | | | | | | | | | | | | | | | | | |
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The expected life of employee stock options is impacted by all of the underlying assumptions used in the Company’s model. The binomial model assumes that employees’ exercise behavior is a function of the remaining contractual life of the stock option and the extent to which the stock option is in-the-money (i.e., the average stock price during the period is above the exercise price of the stock option). The binomial model estimates the probability of exercise as a function of these two variables based on the history of exercises and cancellations of past option grants made by the Company. The expected life for options granted during the three months ended June 30, 2013 derived from the binomial model was 5.29 years. |
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Employee Stock Benefit Plans |
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As of June 30, 2014, the Company had two equity incentive plans from which the Company may grant future equity awards and three expired equity incentive plans from which no future equity awards may be granted but had outstanding equity awards granted prior to expiration. The Company also had one employee stock purchase plan. As of June 30, 2014, approximately 529,000 shares of common stock remain available for grant under the Company’s employee stock purchase plan and approximately 571,000 shares of common stock remain available for grant under the Company’s equity incentive plans. |
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The table below presents a summary of information relating to the Company’s stock option, SAR and RSU grants pursuant to its equity incentive plans: |
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| | Number of Options/SARs/RSUs | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term (years) (3) | | | Aggregate Value (*) | | | | | | | | | |
| | in thousands | | | | | | | | | | | in thousands | | | | | | | | | |
Outstanding at March 31, 2014 | | | 6,229 | | | $ | 7.18 | | | | - | | | | - | | | | | | | | | |
Options granted | | | - | | | | - | | | | - | | | | - | | | | | | | | | |
Options / SARs/RSUs cancelled/forfeited/expired | | | (19 | ) | | $ | 10.7 | | | | - | | | | - | | | | | | | | | |
Options / SARs / RSUs exercised | | | (37 | ) | | $ | 2.71 | | | | - | | | | - | | | | | | | | | |
Outstanding at June 30, 2014 (1) | | | 6,173 | | | $ | 7.2 | | | | 3.21 | | | $ | 12,675 | | | | | | | | | |
Exercisable at June 30, 2014 (2) | | | 4,303 | | | $ | 8.48 | | | | 2.51 | | | $ | 4,571 | | | | | | | | | |
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(*) Calculation of aggregate intrinsic value is based on the share price of the Company’s common stock on June 30, 2014 ($8.49 per share). |
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(1) Due to the ceiling imposed on the SAR grants, the outstanding amount equals a maximum of 4,591 shares of the Company’s common stock issuable upon exercise. SAR grants made prior to January 1, 2009 are convertible for a maximum number of shares of the Company’s common stock equal to 50% of the SAR units subject to the grant. SAR grants made on or after January 1, 2009 and before January 1, 2010 are convertible for a maximum number of shares of the Company’s common stock equal to 75% of the SAR units subject to the grant. SAR grants made on or after January 1, 2010 and before January 1, 2012 are convertible for a maximum number of shares of the Company’s common stock equal to 66.67% of the SAR units subject to the grant. SAR grants made on or after January 1, 2012 are convertible for a maximum number of shares of the Company’s common stock equal to 50% of the SAR units subject to the grant. |
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(2) Due to the ceiling imposed on the SAR grants, the currently exercisable amount equals to a maximum of 2,955 shares of the Company’s common stock exercisable. |
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(3) Calculation of weighted average remaining contractual term does not include the RSUs that were granted, which have indefinite contractual term. |
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Additional information about stock options, SARs and RSUs outstanding and exercisable at June 30, 2014 with exercise prices above $8.49 per share (the closing price of the Company’s common stock on June 30, 2014) is as follows (in thousands, except per share amounts): |
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| | Exercisable | | | Unexercisable | | | Total | |
Exercise Prices | | Number of Options/ SARs/RSUs (in thousands) | | | Weighted Average Exercise Price | | | Number of Options/ SARs/RSUs (in thousands) | | | Weighted Average Exercise Price | | | Number of Options/ SARs/RSUs (in thousands) | | | Weighted Average Exercise Price | |
Above $8.49 | | | 1,461 | | | $ | 11.6 | | | | 232 | | | $ | 9.15 | | | | 1,693 | | | $ | 11.26 | |
Less than $8.49 | | | 2,842 | | | $ | 6.88 | | | | 1,638 | | | $ | 3.54 | | | | 4,480 | | | $ | 5.66 | |
Total | | | 4,303 | | | $ | 8.48 | | | | 1,870 | | | $ | 4.24 | | | | 6,173 | | | $ | 7.2 | |
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The Company’s aggregate equity-based compensation expense for the three months ended June 30, 2014 and 2013 totaled $1,461 and $1,045, respectively. |
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The Company’s aggregate equity-based compensation expense for the six months ended June 30, 2014 and 2013 totaled $2,904 and $2,088, respectively. The Company did not recognize any income tax benefit relating to its equity-based compensation expense for the three and six months ended June 30, 2014 and 2013. |
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As of June 30, 2014, there was $4,491 of total unrecognized equity-based compensation expense related to unvested equity-based compensation awards granted under the Company’s equity incentive plans. This amount is expected to be recognized during the period from 2014 through 2018. |