Stock Option Plan

12 Months Ended

Dec. 31, 2013

2010 STOCK OPTION PLAN

NOTE 11 – 2010 STOCK OPTION PLAN

During 2010, the Board of Directors approved and adopted the 2010 Stock Option, Deferred Stock and Restricted Stock Plan (the “Plan”) to provide for the issuance of non-qualified and/or incentive stock options to employees, officers, directors and consultants and other service providers. The Plan was subsequently amended on various dates. Generally, all options granted expire five to ten years from the date of grant. It is the policy of the Company to issue new shares for stock options exercised, rather than issue treasury shares. Options generally vest over ten years. Effective July 1, 2012, the total number of shares of common stock reserved for issuance was reduced to 15,000,000 shares, subject to annual increases of up to an amount equal to 15% of the outstanding fully-diluted shares of common stock of the Company and any such increase cannot be made until the fully-diluted shares of common stock outstanding exceeds 100,000,000 shares.

On November 29, 2012, the Company entered into a consulting agreement and in consideration of the consulting services, the Company agreed to grant the consultant a non-qualified option to purchase 2,100,000 shares of the Company’s common stock at the exercise price of $0.10 per share. The option shall become exercisable at the rate of 300,000 shares upon execution of the agreement and 150,000 shares every three months, commencing on the date of the agreement. The options were valued at $301,350 using the Black-Scholes option pricing model. Amount of $86,100, $50,225 and $136,325, respectively, relating to these options was expensed during the years ended December 31, 2013, 2012, and for the period from inception (July 22, 2010) to December 31, 2013.

The Company did not grant any stock options during the year ended December 31, 2013.

The assumptions used in the Black-Scholes model are as follows:

	For the year ended December 31, 2012
Risk-free interest rate		0.42	%
Expected dividend yield		0	%
Expected lives	3.5 years
Expected volatility		70	%

A summary of the Company’s stock options activity and related information is as follows:

	For the year ended 2013				For the year ended 2012
	Number of		Average		Number of		Average
	Shares		Price		Shares		Price
Outstanding at the beginning of year		17,100,000	$	0.034		15,000,000	$	0.025
Granted		-		-		2,100,000		0.1
Exercised/Expired/Cancelled		-		-		-		-
Outstanding at the end of year		17,100,000	$	0.034		17,100,000	$	0.034

Exercisable at the end of year		11,400,000	$	0.031		7,800,000	$	0.028

The following table sets forth additional information about stock options outstanding at December 31, 2013:

Weighted

Average

Weighted

Range of

Remaining

Average

Exercise

Options

Contractual

Exercise

Options

Prices

Outstanding

Life

Price

Exercisable

$ 0.025 - 0.1

17,100,000

6.33

0.034

11,400,000

As of December 31, 2013, there was $480,025 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted average period of 1.55 years.

The estimated aggregate pretax intrinsic value (the difference between the Company’s estimated stock price on the last day of the period ended December 31, 2013 and the exercise price, multiplied by the number of in-the-money options) is approximately $2,032,000. This amount changes based on the fair market value of the Company’s common stock.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References+ Details

OverNear, Inc. 10-K