Quarterly report pursuant to sections 13 or 15(d)

Description of Stock Plans

v2.4.0.6
Description of Stock Plans
9 Months Ended
Dec. 31, 2012
Description of Stock Plans
  8. Description of Stock Plans

On May 26, 2011, our board of directors adopted the 2011 Equity Incentive Plan of NeuMedia, Inc. and on April 27, 2012, our board of directors amended and restated the plan and the related plan documents to change references to the name of our company from “NeuMedia, Inc.” to “Mandalay Digital Group, Inc.” and further directed that they be submitted to stockholders for their consideration and approval. On May 23, 2012, our stockholders approved and adopted by written consent the Amended and Restated 2011 Equity Incentive Plan of Mandalay Digital Group, Inc. (the “Plan”) and the Mandalay Digital Group, Inc. Amended and Restated 2011 Equity Incentive Plan Notice of Grant and Restricted Stock Agreement and the Mandalay Digital Group, Inc. Amended and Restated 2011 Equity Incentive Plan Notice of Grant and Stock Option Agreement (collectively, the “Related Documents”).

 

The Plan contains a number of provisions that the board believes are consistent with the interests of stockholders and sound corporate governance practices. These include:

 

 

Individual Grant Limits. No participant may be granted in aggregate, in any calendar year, Awards covering more than 500,000 shares.

 

 

No annual “Evergreen” Provision. The Plan provides for a fixed allocation of shares, thereby requiring stockholder approval of any additional allocation of shares.

 

 

No Discount Stock Options. The Plan prohibits the grant of a stock option with an exercise price of less than the fair market value of the closing price of our common stock on the date the stock option is granted.

Summary Description of the Plan

The Plan provides for grants of stock options, stock appreciation rights (“SARs”), restricted stock and restricted stock units (sometimes referred to individually or collectively as “Awards”) to our and our subsidiaries’ officers, employees, non-employee directors and consultants.

On September 10, 2012, the Company increased the Plan shares for issuance from 4,000,000 to 20,000,000.

Stock options may be either “incentive stock options” (“ISOs”), as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or non-qualified stock options (“NQSOs”). The Plan reserves 20,000,000 shares for issuance, of which 17,750,000 remain available for issuance as of December 31, 2012. The 20,000,000 shares reserved for issuance will serve as the underlying value for all equity awards under the Plan.

The following table summarizes options granted under the Company’s 2011 Equity Incentive Plan for the periods or as of the dates indicated:

Options

 

     Number of      Weighted Average  
(in thousands)    Shares      Exercise Price  

Outstanding at March 31, 2012

     —        $ —    
  

 

 

    

 

 

 

Granted

     500       $ 0.84   

Canceled

     —        $ —    

Forfeited

     —        $ —    

Exercised

     —        $ —    
  

 

 

    

 

 

 

Outstanding at September 30, 2012

     500       $ 0.84   
  

 

 

    

 

 

 

Granted

     —         $ —     

Canceled

     333      $ 0.84   

Forfeited

     —        $ —    

Exercised

     —        $ —    
  

 

 

    

 

 

 

Outstanding at December 31, 2012

     167       $ 0.84  

The following table summarizes options granted that are not under the Company’s 2011 Equity Incentive Plan for the periods or as of the dates indicated:

Options

 

     Number of      Weighted Average  
(in thousands)    Shares      Exercise Price  

Outstanding at March 31, 2012

     —        $ —    
  

 

 

    

 

 

 

Granted

     1,500       $ 0.84   

Canceled

     —        $ —    

Forfeited

     —        $ —    

Exercised

     —        $ —    
  

 

 

    

 

 

 

Outstanding at September 30, 2012

     1,500       $ 0.84   
  

 

 

    

 

 

 

 

(in thousands)    Number of
Shares
     Weighted Average
Exercise Price
 

Granted

     —        $ —     

Canceled

     1,500       $ 0.84   

Forfeited

     —        $ —    

Exercised

     —        $ —    
  

 

 

    

 

 

 

Outstanding at December 31, 2012

     —        $ —    

There were no exercisable options outstanding at December 31, 2012.

On September 27, 2007, the stockholders of the Company adopted the 2007 Employee, Director and Consultant Stock Plan (“Plan”). Under the Plan, the Company may grant up to 3,000,000 shares or equivalents of common stock of the Company as incentive stock options (ISO), non-qualified options (NQO), stock grants or stock-based awards to employees, directors or consultants, except that ISO’s shall only be issued to employees. Generally, ISO’s and NQO’s shall be issued at prices not less than fair market value at the date of issuance, as defined, and for terms ranging up to ten years, as defined. All other terms of grants shall be determined by the board of directors of the Company, subject to the Plan.

On February 12, 2008, the Company amended the Plan to increase the number of shares of our common stock that may be issued under the Plan to 7,000,000 shares and on March 7, 2008, amended the Plan to increase the maximum number of shares of the Company’s common stock with respect to which stock rights may be granted in any fiscal year to 1,100 shares. All other terms of the plan remain in full force and effect.

The following table summarizes options granted under the Company’s 2007 Employee, Director and Consultant Stock Plan equity compensation plan for the periods or as of the dates indicated:

Option Plans

 

     Number of      Weighted Average  
(in thousands)    Shares      Exercise Price  

Outstanding at March 31, 2012

     4,798       $ 1.80   
  

 

 

    

 

 

 

Granted

     —        $ —    

Canceled

     —        $ —    

Forfeited

     —        $ —    

Exercised

     —        $ —    
  

 

 

    

 

 

 

Outstanding at December 31, 2012

     4,798       $ 1.80   
  

 

 

    

 

 

 

Exercisable at December 31, 2012

     4,798       $ 1.80   
  

 

 

    

 

 

 

The exercise price for options outstanding and options exercisable at December 31, 2012 was as follows:

 

Range of Exercise Price

   Weighted
Average
Remaining
Contractual Life
(Years)
     Number
Outstanding and
Exercisable
December 31, 2012
     Weighted
Average
Exercise
Price
     Aggregate
Intrinsic
Value
 

$0      - $1.00

     3.51         2,698       $ 0.47       $ 807,598   

$2.00 - $3.00

     5.47         1,300       $ 2.75       $ —    

$4.00 - $5.00

     5.12         800       $ 4.75       $ —    
     

 

 

       

 

 

 
     4.31         4,798       $ 1.80       $ 807,598   
     

 

 

       

 

 

 

Stock Plans

The Company’s 2007 Employee, Director and Consultant Stock Plan equity compensation plan did not contain nonvested options as of December 31, 2012 and March 31, 2012.

As of December 31, 2012, under the Company’s 2007 Employee, Director and Consultant Stock Plan equity compensation plan, there was $0 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan.

Total stock compensation expense for the Company’s 2007 Employee, Director and Consultant Stock Plan equity compensation plan and Amended and Restated 2011 Equity Incentive Plan is included in the following statements of operations components:

 

     Nine Months Ended
December 31,
2012
     Nine Months Ended
December 31,
2011
 

Product development

   $ —        $ 69   

Sales and marketing

     —          —    

General and administrative

     630         —    
  

 

 

    

 

 

 
   $ 630       $ 69