API Technologies Corp. - FORM 10-Q - XML - IDEA: XBRL DOCUMENT - April 9, 2012

12. SHARE-BASED COMPENSATION

On October 26, 2006, the Company adopted its 2006 Equity Incentive Plan (the "Equity Incentive Plan"), which was approved at the 2007 Annual Meeting of Stockholders of the Company. All the prior options issued by API were carried over to this plan under the provisions of the Plan of Arrangement. On October 22, 2009, the Company amended the Equity Incentive Plan to increase the number of shares of common stock under the plan from 1,250,000 to 2,125,000. On January 21, 2011, the Company amended the Equity Incentive Plan to increase the number of shares of common stock under the plan from 2,125,000 to 5,875,000, and further amended the plan on June 3, 2011 to permit the issuance of RSUs, which amendments were approved by the shareholders of the Company on November 4, 2011. Of the 5,875,000 shares authorized under the Equity Incentive Plan, 2,391,028 shares are available for issuance pursuant to options, RSUs, or stock as of February 29, 2012. Under the Company's Equity Incentive Plan, incentive options and non-statutory options may have a term of up to ten years from the date of grant. The stock option exercise prices are equal to at least 100 percent of the fair market value of the underlying shares on the date the options are granted.

As of February 29, 2012, there was $2,761 of total unrecognized compensation related to non-vested stock options, which are not contingent upon attainment of certain milestones. For options with certain milestones necessary for vesting, the fair value is not calculated until the conditions become probable. The cost is expected to be recognized over the remaining periods of the options, which are expected to vest from 2012 to 2016.

During the three months ended February 29, 2012 and February 28, 2011, $858 and $1,308, respectively, has been recognized as share-based compensation expense in cost of revenues, selling expense, general and administrative expense and business acquisition and related charges.

The fair value of each option grant is estimated at the grant date using the Black-Scholes option-pricing model based on the assumptions detailed below:

The summary of the common stock options granted, cancelled, exchanged or exercised under the Plan:

Restricted stock unit activity under the 2006 Equity Compensation Plan, for the three month period ended February 29, 2012 is presented below:

The intrinsic value is calculated as the excess of the market value as of February 29, 2012 over the exercise price of the shares. The market value as of February 29, 2012 was $3.79 as reported by the NASDAQ Stock Market.