Notes to Consolidated Financial Statements
(CONTINUED)
TYRATECH, INC. • ANNUAL REPORT 2011 • PAGE 40
Non-employees
As of December 31, 2011 the total unrecognized compensation
cost for these unit grants was US$0 (2010: US$975). The
compensation recognized in operating expenses for unit
grants for the year ended December 31, 2011 was US$1,999
(2010: US$2,071). Since inception to December 31, 2010,
111,904 units granted have vested. The initial cost of the unit
grants to the non-employees was forgiven by the Company
and was treated as additional compensation to the non-employee.
The weighted average grant date fair value for all
unit grants during the year ended December 31, 2011 was
US$0.0 million (2010: US$0.0 million), as the Company has not
issued restricted stock to consultants since 2007.
Summary Unit Grant Information
The Company determined the estimated unit price of the
Company at the measurement date by using a combination
of an independent valuation of the Company's units and internal
analysis of milestones of the Company throughout the year.
Effective with the recapitalization from a limited liability company
to a corporation on May 23, 2007 and the IPO the units
granted to employees and nonemployees were converted to
shares based up the IPO conversion of 1 unit to 0.8606 shares.
A summary of unit grant activity under the unit grant plan is
summarized as follows:
Number of shares*
Outstanding at December 31, 2009 1,481,888
Granted -
Forfeited -
Outstanding at December 31, 2010 1,481,888
Granted -
Forfeited -
Outstanding at December 31, 2011 1,481,888
*Units granted under the plan converted to shares
The total shares granted under unit grant agreements included
in the statement of shareholders' equity include both vested
and non-vested shares. The remaining unvested shares
were fully vested on April 20, 2011.
(b) 2007 Equity Compensation Plan
On May 23, 2007, the board of directors approved the
TyraTech, Inc. 2007 Equity Compensation Plan (the Plan), as
amended, which authorizes up to a maximum of ten percent
of the issued share capital of the Company (5,185,621 shares
at December 31, 2011) to be made available for granting of
awards to all employees and non-employee directors. These
share awards can be in the form of options to purchase capital
stock, stock appreciation rights (SARs), restricted shares,
and other option stock based awards the Board of Directors'
Remuneration Committee shall determine. The Remuneration
Committee, which is comprised of all independent directors,
determines the number of shares, the term, the frequency
and date, the type, the exercise periods, any performance
criteria pursuant to which awards may be granted and the
restrictions and other terms of each grant of restricted shares
in accordance with terms of the Plan.
Stock Appreciation Rights (SAR's)
During the year ended December 31, 2011, the Company
granted 690,000 (2010: 3,795,125) SARs. SARs can be granted
with an exercise price less than, equal to or greater than the
stock's fair market value at the date of grant and require the
Company to issue stock to the employee upon exercise of
the SAR. The SARs have ten year terms and vest and become
fully exercisable over varying periods between one to four
years from the date of grant.
The fair value of each SAR was estimated on the grant date
using the Black-Scholes option-pricing model that used the
assumptions in the following table. The fair value is amortized
to compensation expense on a straight-line basis over
the expected term. The Company estimated the expected
