| 17. |
OPTION INCENTIVE PLAN |
On January 16, 2011, the Board adopted the 2010 Equity Incentive Plan (the “2010 Plan”) and reserved 1,500,000 shares of common stock for issuance under the 2010 Plan. On March 9, 2011, the 2010 Plan was approved by the Company’s stockholders at the 2010 Annual Meeting of Stockholders.
On January 16, 2011, the Company granted to the directors and officers an option to purchase 910,000 shares of common stock under the 2010 Plan. The options have exercise price of $14.81 per share, an expiration date of five to ten years from the date of grant, and vest over 48 consecutive months: 20% in the first 12-month period; 20% in the second 12-month period; 30% in the third 12-month period; and 30% in the forth 12-month period. The Company determined the fair value of the options on the date of grant was $9,477,024 using the Black-Scholes-Merton option pricing model with the following assumptions: expected volatility, 76%; risk-free interest rate, 1.95%; expected weighted average life, five to ten years; and expected dividend yield, 0%. As of March 31, 2012 and 2011, the total vested options were 165,000 shares and 45,500 shares, respectively.
During June 2011, two candidates resigned from their position and terminated their services to the Company. They also did not exercise their vesting options within three months from the date of their termination. According to the option agreement, their options were forfeited and cancelled; the total number of forfeited and cancelled options was 250,000.
During the years ended March 31, 2012 and 2011, no vested options were exercised.
At March 31, 2012 and 2011, outstanding options were as follows:
| |
|
Number of
Shares under
Options |
|
|
Weighted
Average
Exercise Price |
|
| |
|
|
|
|
|
|
| Options outstanding at April 1, 2010 |
|
|
- |
|
|
$ |
- |
|
| Options granted |
|
|
910,000 |
|
|
|
14.81 |
|
| Options expired or forfeited |
|
|
- |
|
|
|
- |
|
| Options exercised |
|
|
- |
|
|
|
- |
|
| Options outstanding at March 31, 2011 |
|
|
910,000 |
|
|
|
14.81 |
|
| Options granted |
|
|
- |
|
|
|
- |
|
| Options expired or
forfeited |
|
|
(250,000 |
) |
|
|
14.81 |
|
| Options exercised |
|
|
- |
|
|
|
- |
|
| Options outstanding at March 31, 2012 |
|
|
660,000 |
|
|
$ |
14.81 |
|
| |
|
|
|
|
|
|
|
|
The following table summarizes information about options outstanding at March 31, 2012:
| |
|
|
Options Outstanding |
|
|
Options Exercisable |
|
Exercise
price |
|
|
Number of
shares
under Option |
|
|
Weighted average
remaining contractual life
(years) |
|
|
Weighted
Average
Exercise Price |
|
|
Number of
shares
under Option |
|
|
Weighted
Average
Exercise Price |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
14.81 |
|
|
|
660,000 |
|
|
|
7.15 |
|
|
$ |
14.81 |
|
|
|
165,000 |
|
|
$ |
14.81 |
|
At March 31, 2012 and 2011, the options outstanding and exercisable had no
intrinsic value.
For the years ended March 31, 2012 and 2011, the Company has recorded $1,484,690 and $473,852, respectively, as the fair value of the vested options.
As of March 31, 2012, total compensation cost related to non-vested stock options and restricted stock not yet recognized was approximately $5,054,193, which is expected to be recognized over the next 33 months |
