Annual report pursuant to Section 13 and 15(d)

Stock Compensation Plans

Stock Compensation Plans

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Employee Stock Purchase Plan

Under the Company’s amended and restated Qualified Employee Stock Purchase Plan, a total of 10,000,000 shares of common stock are available for issuance. As currently administered by the Company’s compensation committee, all full-time employees may use a portion of their salary to acquire shares of LTS common stock under this purchase plan at a 5% discount from the market price of LTS’ common stock at the end of each option period. Option periods have been set at three month periods and commence on January 1, April 1, July 1 and October 1 of each year and end on March 31, June 30, September 30 and December 31 of each year. The plan is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. During 2018, 161,968 shares of LTS common stock were issued to employees under this plan, at prices ranging from $2.21 to $3.23; during 2017, 167,016 shares of LTS common stock were issued to employees under this plan, at prices ranging from $2.32 to $3.00 and during 2016, 210,330 shares of LTS common stock were issued to employees under this plan, at prices ranging from $2.19 to $2.38. These share issuances resulted in a capital contribution of $453, $420 and, $481 for 2018, 2017 and 2016, respectively.

Amended and Restated 1999 Performance Equity Plan and 2009 Incentive Compensation Plan

In 1999, the Company adopted the 1999 Performance Equity Plan (as amended and restated, the “1999 Plan”) and in 2009 the Company adopted the 2009 Incentive Compensation Plan (the “2009 Plan”), which provide for the grant of stock options and other awards to designated employees, officers and directors and certain other persons performing services for the Company and its subsidiaries, as designated by the board of directors. The 1999 Plan provides for the granting of up to 25,000,000 awards with an annual limit on grants to any individual of 1,500,000. In 2014, the 2009 Plan was amended to provide for the granting of up to 45,000,000 awards with an annual limit on grants to any individual of 1,500,000. Awards under the plans include stock options, stock appreciation rights, restricted stock, deferred stock, stock reload options and/or other stock-based awards. The compensation committee of the Company’s board of directors administers the plans. Stock options granted under the 2009 Plan may be incentive stock options and non-qualified stock options. An incentive stock option may be granted only through August 27, 2019 under the 2009 Plan and may only be exercised within ten years of the date of grant (or five years in the case of an incentive stock option granted to an optionee who at the time of the grant possesses more than 10% of the total combined voting power of all classes of stock of LTS (“10% Shareholder”)). Incentive stock options may no longer be granted under the 1999 Plan. The exercise price of both incentive and non-qualified options may not be less than 100% of the fair market value of LTS’ common stock at the date of grant, provided that the exercise price of an incentive stock option granted to a 10% Shareholder shall not be less than 110% of the fair market value of LTS’ common stock at the date of grant. As of December 31, 2018, 16,721,103 and 7,412,868 shares of common stock were available for issuance under the 2009 Plan and the 1999 Plan, respectively.

A summary of the status of the 1999 Plan at December 31, 2018 and changes during the year ended December 31, 2018 are presented below:



	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Options outstanding, December 31, 2017	8,632,000		$	1.36
Exercised	(3,127,000	)	1.70
Forfeited	(1,620,000	)	1.04
Expired	(30,000	)	2.69
Options outstanding, December 31, 2018	3,855,000		$	1.20	1.52	$	4,551
Options exercisable, December 31, 2018	3,855,000		$	1.20	1.52	$	4,551

A summary of the status of the 2009 Plan at December 31, 2018 and changes during the year ended December 31, 2018 are presented below:



	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Options outstanding, December 31, 2017	20,488,860		$	2.28
Exercised	(1,266,837	)	1.63
Forfeited	(2,229,983	)	2.75
Options outstanding, December 31, 2018	16,992,040		$	2.26	3.94	$	7,749
Options exercisable, December 31, 2018	16,338,290		$	2.22	3.83	$	7,749

Restricted Stock Awards

A summary of the restricted stock awards at December 31, 2018 and changes during the year ended December 31, 2018 is presented below:



	Restricted Stock		Weighted-Average Grant Date Fair Value Per Share
Nonvested at December 31, 2017	3,380,145		$	2.60
Issued during 2018	2,172,000		3.24
Vested during 2018	(1,185,770	)	2.75
Forfeited during 2018	(106,250	)	3.11
Nonvested at December 31, 2018	4,260,125		$	2.87

Restricted stock awards issued in 2018 vest in four equal annual installments.

As of December 31, 2018, there was $7,931 of total unrecognized compensation cost related to non-vested share-based compensation arrangements. This cost is expected to be recognized over the vesting periods of the options and restricted stock, which on a weighted-average basis is approximately 2.46 years.

The total intrinsic value of options exercised during the years ended December 31, 2018, 2017 and 2016 amounted to $6,171, $3,992 and $6,556, respectively. The fair value of restricted stock vesting in 2018 and 2017 was $3,256 and $1,944, respectively.

Non-cash compensation expense relating to stock options was calculated using the Black-Scholes option pricing model, amortizing the value calculated over the vesting period. The Company has elected to recognize compensation cost for option awards that have graded vesting schedules on a straight line basis over the requisite service period for the entire award.

For the years ended December 31, 2018, 2017 and 2016, non-cash compensation expense relating to share-based awards granted to employees, consultants and advisors amounted to $5,882, $5,539 and $5,311, respectively.