Annual report pursuant to Section 13 and 15(d)

Stock Based Compensation

v3.7.0.1
Stock Based Compensation
12 Months Ended
Oct. 02, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Based Compensation

Note 12 — Stock Based Compensation

 

The Optex Systems Holdings 2009 Stock Option Plan provides for the issuance of up to 75,000 shares to Optex Systems Holdings officers, directors, employees and to independent contractors who provide services to Optex Systems Holdings as either incentive or nonstatutory stock options determined at the time of grant. As of October 2, 2016, Optex Systems Holdings has granted stock options to officers and employees as follows (as adjusted for the 1000:1 reverse stock split on common shares effective October 7, 2015):

 

Date of   Shares     Exercise     Shares Outstanding     Expiration   Vesting
Grant   Granted     Price     As of 10/02/16     Date   Period
12/09/11     46,070     $ 10.00       35,340     12/08/2018   4 years
12/19/13     25,000     $ 10.00       25,000     12/18/2020   4 years
Total     71,070               60,340          

 

The following table summarizes the status of Optex Systems Holdings’ aggregate stock options granted under the incentive stock option plan (as adjusted for the 1000:1 reverse stock split on common shares effective October 7, 2015):

 

    Number     Weighted              
    of Shares     Average     Weighted     Aggregate  
    Remaining     Fair     Average     Value  
Subject to Exercise   Options     Value     Life (Years)     (Thousands)  
Outstanding as of September 28, 2014     62,912     $       3.41     $  
Granted – 2015                              
Forfeited – 2015     (54 )                      
Exercised – 2015                            
Outstanding as of September 27, 2015     62,858     $       2.32     $  
Granted – 2016                              
Forfeited – 2016     (2,518 )                      
Exercised – 2016                            
Outstanding as of October 2, 2016     60,340     $       1.40     $  
                                 
Exercisable as of September 27, 2015     40,266     $       1.45     $  
                                 
Exercisable as of October 2, 2016     52,840     $       1.07     $  

 

There were no options granted in the twelve months ended October 2, 2016 and September 27, 2015.

 

The following table summarizes the status of Optex Systems Holdings’ aggregate non-vested shares granted under the 2009 Stock Option Plan:

 

    Number of
Non-vested 
Shares
Subject to
Options
    Weighted-
Average 
Grant- 
Date 
Fair Value
 
Non-vested as of September 28, 2014     42,710     $ 7.58  
Non-vested granted — year ended September 27, 2015         $  
Vested — year ended September 27, 2015     (20,064 )   $ 7.50  
Forfeited — year ended September 27, 2015     (54 )   $  
Non-vested as of September 27, 2015     22,592     $ 7.66  
Non-vested granted — year ended October 2, 2016            
Vested — year ended October 2, 2016     (12,575 )     7.33  
Forfeited — year ended October 2, 2016     (2,518 )      
Non-vested as of October 2, 2016     7,500     $ 8.00  

  

Restricted Stock Units issued to Officers and Employees

 

On June 14, 2016, the Compensation Committee (“Committee”) of the Board of Directors of Optex Systems Holdings, Inc. approved the Company’s 2016 Restricted Stock Unit Plan (the “Plan”). The Plan provides for the issuance of stock units (“RSU”) for up to 1,000,000 shares of the Company’s common stock to Optex Systems Holdings officers and employees. Each RSU constitutes a right to receive one share of the Company’s common stock, subject to vesting, which unless otherwise stated in an RSU agreement, shall vest in equal amounts on the first, second and third anniversary of the grant date. Shares of the Company’s common stock underlying the number of vested RSUs will be delivered as soon as practicable after vesting. During the period between grant and vesting, the RSUs may not be transferred, and the grantee has no rights as a shareholder until vesting has occurred. If the grantee’s employment is terminated for any reason (other than following a change in control of the Company or a termination of an officer other than for cause), then any unvested RSUs under the award will automatically terminate and be forfeited. If an officer grantee’s employment is terminated by the Company without cause or by the grantee for good reason, then, provided that the RSUs have not been previously forfeited, the remaining unvested portion of the RSUs will immediately vest as of the officer grantee’s termination date. In the event of a change in control, the Company’s obligations regarding outstanding RSUs shall, on such terms as may be approved by the Committee prior to such event, immediately vest, be assumed by the surviving or continuing company or cancelled in exchange for property (including cash).

 

On June 15, 2016, the Company issued 150,000 RSUs to its Chief Executive Officer, Danny Schoening, and 50,000 RSUs to its Chief Financial Officer, Karen Hawkins. The RSUs issued to Mr. Schoening and Ms. Hawkins vest as follows: 34% on January 1, 2017, 33% on January 1, 2018 and 33% on January 1, 2019. The total market value of the restricted stock units based on the shares price of $1.85 as of June 15, 2016 is $372 thousand. The cost of the shares is amortized on a straight line basis across the vesting periods.

 

As of October 2, 2016, none of the restricted stock units had vested.

 

Consulting and Vendor Equity Issues

 

On April 29, 2016, Optex Systems Holdings, Inc. issued 40,000 common “restricted” shares at a market price of $2.35 per share ($94,000) in support of the IRTH Communications agreement (See note 6). The cost of the shares is amortized on a straight line basis through April 2017. There were no other equity instruments issued to consultants and vendors during the twelve months ended October 2, 2016.

 

Stock Based Compensation Expense

 

Equity compensation is amortized based on a straight line basis across the vesting or service period as applicable. The recorded compensation costs for options and shares granted and restricted stock units awarded as well as the unrecognized compensation costs are summarized in the table below:

 

    Stock Compensation  
    (thousands)  
    Recognized Compensation Expense     Unrecognized Compensation Expense  
    Twelve months ended     As of period ending  
    October 2, 2016     September 27, 2015     October 2, 2016     September 27, 2015  
                         
Stock Options   $ 52     $ 140     $ 48     $ 100  
Restricted Stock Units     93       -       279       -  
Consultant Shares (IRTH)     47       -       47       -  
Total Stock Compensation   $ 192     $ 140     $ 374     $ 100