Stock Option Plans

9 Months Ended

Jun. 30, 2011

Note 11: Stock Option Plans

Equity Compensation Plan

On December 1, 2005, the Board of Directors adopted the Company’s Equity Compensation Plan (the “Equity Compensation Plan”), approved by the stockholders of the Company on March 1, 2006. The Equity Compensation Plan was adopted to supplement the Company’s existing 2002 Stock Option Plan. In addition to permitting the grant of stock options as permitted under the 2002 Stock Option Plan, the Equity Compensation Plan allows the Company flexibility with respect to equity awards by also providing for grants of stock awards (i.e. restricted or unrestricted), stock purchase rights and stock appreciation rights. One million shares were authorized for issuance under the Equity Compensation Plan. The following description does not purport to be complete and is qualified in its entirety by reference to the full text of the Equity Compensation Plan, which is included as an exhibit to the Company’s reports filed with the SEC.

The general purpose of the Equity Compensation Plan is to provide an incentive to our employees, directors and consultants, including executive officers, employees and consultants of any subsidiaries, by enabling them to share in the future growth of our business. The Board of Directors believes that the granting of stock options and other equity awards promotes continuity of management and increases incentive and personal interest in the welfare of the Company by those who are primarily responsible for shaping and carrying out our long range plans and securing our growth and financial success.

The Board believes that the Equity Compensation Plan will advance our interests by enhancing our ability to (a) attract and retain employees, directors and consultants who are in a position to make significant contributions to our success; (b) reward employees, directors and consultants for these contributions; and (c) encourage employees, directors and consultants to take into account our long-term interests through ownership of our shares.

The Company has 1,000,000 shares of Common Stock authorized for issuance under the Equity Compensation Plan and 495,569 shares were available as of June 30, 2011. As of June 30, 2011, approximately 97 of the Company’s employees were eligible to participate in the Equity Compensation Plan.

2002 Stock Option Plan

On March 5, 2002, the Board of Directors adopted the Asta Funding, Inc. 2002 Stock Option Plan (the “2002 Plan”), which plan was approved by the Company’s stockholders on May 1, 2002. The 2002 Plan was adopted in order to attract and retain qualified directors, officers and employees of, and consultants to, the Company. The following description does not purport to be complete and is qualified in its entirety by reference to the full text of the 2002 Plan, which is included as an exhibit to the Company’s reports filed with the SEC.

The 2002 Plan authorizes the granting of incentive stock options (as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”)) and non-qualified stock options to eligible employees of the Company, including officers and directors of the Company(whether or not employees) and consultants of the Company.

The Company has 1,000,000 shares of Common Stock authorized for issuance under the 2002 Plan and 129,734 were available as of June 30, 2011. As of June 30, 2011, approximately 97 of the Company’s employees were eligible to participate in the 2002 Plan.

1995 Stock Option Plan

The 1995 Stock Option Plan expired on September 14, 2005. The plan was adopted in order to attract and retain qualified directors, officers and employees of, and consultants, to the Company. The following description does not purport to be complete and is qualified in its entirety by reference to the full text of the 1995 Stock Option Plan, which is included as an exhibit to the Company’s reports filed with the SEC.

The 1995 Stock Option Plan authorized the granting of incentive stock options (as defined in Section 422 of the Code) and non-qualified stock options to eligible employees of the Company, including officers and directors of the Company (whether or not employees) and consultants to the Company.

The Company authorized 1,840,000 shares of Common Stock for issuance under the 1995 Stock Option Plan. All but 96,002 shares were utilized. As of September 14, 2005, no more options could be issued under this plan.

The following table summarizes stock option transactions under the plans:


	Nine Months Ended June 30,
	2011					2010
				Weighted					Weighted
				Average					Average
				Exercise					Exercise
	Shares			Price		Shares			Price
Outstanding options at the beginning of period		922,039		$	12.70		1,157,905		$	10.76
Options granted		384,800			7.53		158,900			8.07
Options exercised		(3,268	)		3.71		(327,966	)		2.65
Options forfeited		(1,400	)		5.79		(20,500	)		16.24


Outstanding options at the end of period		1,302,171		$	11.37		968,339		$	12.95


Exercisable options at the end of period		997,174		$	12.36		838,677		$	13.89


	Three Months Ended June 30,
	2011					2010
				Weighted					Weighted
				Average					Average
				Exercise					Exercise
	Shares			Price		Shares			Price
Outstanding options at the beginning of period		1,254,505		$	11.17		970,538		$	12.93
Options granted		50,000			11.50		—			—
Options exercised		(2,334	)		2.95		(2,199	)		2.95
Options forfeited		—			—		—			—


Outstanding options at the end of period		1,302,171		$	1137		968,339		$	12.95


Exercisable options at the end of period		997,174		$	12.36		838,677		$	13.89

There is no intrinsic value of the outstanding and exercisable options as of June 30, 2011. The intrinsic value of the stock options exercised during the three month period ended June 30, 2011 was approximately $11,000.

The following table summarizes information about the Plans outstanding options as of June 30, 2011:


	Options Outstanding						Options Exercisable
			Weighted
			Average		Weighted				Weighted
			Remaining		Average				Average
	Number		Contractual		Exercise		Number		Exercise
Range of Exercise Price	Outstanding		Life (in Years)		Price		Exercisable		Price
$2.8751 — $5.7500		195,500		4.3	$	3.92		195,500	$	3.92
$5.7501 — $8.6250		503,400		8.9		7.71		231,736		7.71
$8.6251 — $14,3750		50,000		10.0		11.50		16,667		11.50
$14.3751 — $17.2500		198,611		2.4		14.88		198,611		14.88
$17.2501 — $20.1250		339,660		3.3		18.23		339,660		18.23
$25.8751 — $28.7500		15,000		5.5		28.75		15,000		28.75


		1,302,171		5.8	$	11.37		997,174	$	12.36

The following table summarizes information about restricted stock transactions:


	Nine Months Ended June 30,
	2011					2010
				Weighted					Weighted
				Average					Average
				Grant Date					Grant Date
	Shares			Fair Value		Shares			Fair Value
Unvested at the beginning of period		17,669		$	19.73		35,338		$	19.73
Awards granted		32,765			7.63		—			—
Vested		(28,591	)		15.11		(17,669	)		19.73
Forfeited		—			—		—			—


Unvested at the end of period		21,843		$	7.63		17,669		$	19.73


	Three Months Ended June 30,
	2011				2010
			Weighted				Weighted
			Average				Average
			Grant Date				Grant Date
	Shares		Fair Value		Shares		Fair Value
Unvested at the beginning of period		21,843	$	7.63		17,669	$	19.73
Awards granted		—		—		—		—
Vested		—		—		—		—
Forfeited		—		—		—		—


Unvested at the end of period		21,843	$	7.63		17,669	$	19.73

The Company recognized $1,723,000 and $420,000 of stock based compensation expense during the nine and three month periods ended June 30, 2011. The Company recognized $969,000 and $206,000 of stock based compensation expense during the nine and three months ended June 30, 2010. As of June 30, 2011, there was $1,609,000 of unrecognized stock based compensation cost.