Note 7—Stock-Based Compensation

Legacy Education Alliance, Inc. does not currently have any stock-based compensation plans. However, our parent company, Tigrent Inc., does have two incentive stock plans; the “2009 Incentive Plan” and the “2012 Incentive Plan”, which cover some of our current employees and directors. The financial activity pertaining to our employees and directors is reflected in our consolidated financial statements, presented herein, and therefore, we are providing our historical disclosures pertaining to those plans. All references to share quantities and values in the ensuing descriptions reflect historical information from Tigrent Inc. and have not been adjusted for the impact of the Merger.

2009 Incentive Plan

The 2009 Incentive Plan, which was approved by Tigrent stockholders on September 2, 2009, provides for the issuance of up to 1.3 million shares of Tigrent’s common stock. The 2009 Incentive Plan allows for the granting of a broad range of award types, including stock options (incentive and non-qualified), stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units and other stock awards. Employees, directors, officers and consultants are eligible to receive awards. The purpose of the 2009 Incentive Plan is to motivate participants to achieve long range goals, attract and retain eligible employees, provide incentives competitive with other similarly situated companies and align the interest of employees and directors with those of our stockholders. The 2009 Incentive Plan is administered by the Compensation Committee of the Board of Directors.

On December 22, 2010, the Compensation Committee approved restricted stock award grants for 900,000 shares of common stock of Tigrent to certain officers pursuant to the 2009 Incentive Plan. The awards vested fully on December 22, 2014.

On December 22, 2010, Tigrent awarded 20,000 shares of common stock to each of our three non-employee independent directors, valued at $0.06 per share, reflecting our stock price on the grant date.

On March 3, 2011, the Compensation Committee approved restricted stock award grants for an aggregate of 85,000 shares of common stock to certain employees pursuant to the 2009 Incentive Plan.

On November 9, 2011, the Compensation Committee approved restricted stock award grants for an aggregate of 90,000 shares of common stock to certain non-employee independent directors pursuant to the 2009 Incentive Plan.

On December 12, 2011, the Compensation Committee approved restricted stock award grants for 100,000 shares of common stock to an officer pursuant to the 2009 Incentive Plan.

In 2012, a total of 375,000 shares of the approved restricted stock awards granted in 2010 to various employees were forfeited.

On April 15, 2013, the Compensation Committee approved restricted stock award grants for an aggregate of 90,000 shares of common stock to certain non-employee independent directors pursuant to the 2009 Incentive Plan.

On December 23, 2013, the Compensation Committee approved restricted stock award grants for an aggregate of 30,000 shares of common stock to a certain director pursuant to the 2009 Incentive Plan.

On April 30, 2013, the Compensation Committee granted restricted stock award grants for an aggregate of 300,000 shares of common stock to a certain officer pursuant to the 2009 Incentive Plan. The awards vest fully on April 30, 2017, or upon a “change of control” as defined in the 2009 Incentive Plan.

In 2013, 45,000 shares of the approved restrictive stock awards granted in prior years were forfeited.

As of December 31, 2014, an aggregate of 165,000 shares remain available for further grants under this plan.

2012 Incentive Plan

The 2012 Incentive Plan, which was approved by Tigrent stockholders on May 23, 2012, provides for the issuance of up to 750,000 shares of our common stock. This incentive plan supplements the 2009 Incentive Plan. The 2012 Incentive Plan allows for the granting of a broad range of award types, including stock options (incentive and non-qualified), stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units and other stock awards. Employees, directors, officers and consultants are eligible to receive awards. The purpose of the 2012 Incentive Plan is to motivate participants to achieve long range goals, attract and retain eligible employees, provide incentives competitive with other similarly situated companies and align the interest of employees and directors with those of our stockholders. The Incentive Plan is administered by the Compensation Committee of the Board of Directors.

On April 30, 2013 the Compensation Committee granted restricted performance stock award grants for an aggregate of 200,000 shares of common stock to an officer pursuant to the 2012 Incentive Plan. The actual restricted shares that vest could be up to 300,000 shares if this officer exceeds performance criteria (as defined). If targets are met, the award vests 50,000 shares per year based on performance through 2017 or fully upon a “change of control” as defined in the Incentive Plan. In 2014, the first tranche of 50,000 restricted shares did not vest as the performance targets were not met.

As of December 31, 2014, an aggregate of 480,000 shares remain available for further grants under the 2012 Incentive Plan.

Compensation Expense and Related Valuation Techniques

In accordance with ASC 718, we record compensation expense for all stock based payment awards made to employees and directors under Tigrent’s Incentive Plans based on the market value of its common stock on the date of issuance. The value of the portion of the awards that is ultimately expected to vest is recognized as an expense over the requisite service periods on a straight-line basis. Unrecognized compensation expense associated with unvested share-based payment awards, consisting entirely of unvested restricted stock, was approximately $61,000 and $115,000 at December 31, 2014 and 2013, respectively.  That cost is expected to be recognized over a weighted-average period of 1.5 years. No stock-based awards have been issued subsequent to the Merger.