Note

16—Stock

Option Plans

2012

Stock Option and Performance Award Plan

February

2012,

the Board of Directors of the Company (the “Board”) adopted the Company’s

2012

Stock Option and Performance Award Plan (the

“2012

Plan”), which was approved by the stockholders of the Company on

March

21,

2012.

The

2012

Plan replaced the Equity Compensation Plan (as defined below).

The

2012

Plan provides the Company with flexibility with respect to equity awards by providing for grants of stock awards (i.e. restricted or unrestricted), stock purchase rights and stock appreciation rights, in addition to the granting of stock options.

The Company authorized

2,000,000

shares of Common Stock for issuance under the

2012

Plan. Under the

2012

Plan, the Company has granted options to purchase an aggregate of

484,200

shares, an award of

245,625

shares of restricted stock, and has cancelled

66,568

options, leaving

1,336,743

shares available as of

December

31,

2016.

December

31,

2016,

129

of the Company’s employees were able to participate in the

2012

Plan.

Equity Compensation Plan

December

2005,

the Board adopted the Company’s Equity Compensation Plan (the “Equity Compensation Plan”), which was approved by the stockholders of the Company on

March

2006.

The Equity Compensation Plan was adopted to supplement the Company’s

2002

Stock Option Plan (as defined below).

In addition to permitting the grant of stock options as are permitted under the

2002

Stock Option Plan, the Equity Compensation Plan allowed 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.

The Company authorized

1,000,000

shares of Common Stock for issuance under the Equity Compensation Plan. As of

March

21,

2012,

more awards could be issued under this plan.

2002

Stock Option Plan

March

2002,

the Board adopted the Company’s

2002

Stock Option Plan (the

“2002

Plan”), which was approved by the stockholders of the Company on

May

2002.

The

2002

Plan was adopted in order to attract and retain qualified directors, officers and employees of, and consultants to, the Company.

The

2002

Plan authorized 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 authorized

1,000,000

shares of Common Stock authorized for issuance under the

2002

Plan. As of

March

2012,

more awards could be issued under this plan.

Summary of the Plans

Compensation expense for stock options and restricted stock is recognized over the vesting period. Compensation expense for restricted stock is based upon the market price of the shares underlying the awards on the grant date.

The following table summarizes stock option transactions under the

2012

Plan, the

2002

Plan, and the Equity Compensation Plan:

	Three Months Ended December 31 ,
	2016					2015
	Number Of Shares			Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
Outstanding options at the beginning of period		949,667		$	8.47		1,043,566	$	8.47
Options granted		—			—		67,100		7.93
Options exercised		—			—		—		—
Options forfeited/cancelled		(52,500	)		14.16		—		—
Outstanding options at the end of period		897,167		$	8.14		1,110,666	$	8.43
Exercisable options at the end of period		844,829		$	8.15		965,325	$	8.46

The following table summarizes information about the

2012

Plan,

2002

Plan, and the Equity Compensation Plan outstanding options as of

December

31,

2016:

			Options Outstanding						Options Exercisable
Range of Exercise Price			Number of Shares Outstanding		Weighted Remaining Contractual Life (in Years)		Weighted Average Exercise Price		Number of Shares Exercisable		Weighted Average Exercise Price
$2.8751	-	$5.7500		3,800		2.3	$	2.95		3,800	$	2.95
$5.7501	-	$8.6250		768,867		5.2		7.96		716,529		7.96
$8.6251	-	$11.5000		124,500		6.1		9.40		124,500		9.40

				897,167		5.3	$	8.14		844,829	$	8.15

The Company recognized

($6,000)

and

$196,000

of compensation (benefit) expense related to the stock option grants during the

three

month periods ended

December

31,

2016

and

2015,

respectively. As of

December

31,

2016,

there was

$76,000

of unrecognized compensation cost related to stock option awards. The weighted average period over which such costs are expected to be recognized is

1.8

years. The intrinsic value of the outstanding and exercisable options as of

December

31,

2016

was approximately

$1,490,000

and

$1,398,000,

respectively. The weighted average remaining contractual life of exercisable options is

5.1

years. There were no options exercised during the

three

month periods ended

December

31,

2016

and

2015.

The fair value of the stock options that vested during the

three

month periods ended

December

31,

2016

and

2015

was approximately

$657,000

and

$830,000,

respectively. There were no options granted during the

three

month period ended

December

31,

2016.

The fair value of the options granted during the

three

month period ended

December

31,

2015

was approximately

$532,000.

The following table summarizes information about restricted stock transactions:

	Three Months Ended December 31 ,
	2016				2015
	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares			Weighted Average Grant Date Fair Value
Unvested at the beginning of period		—	$	—		44,107		$	9.28
Awards granted		—		—		5,000			7.89
Vested		—		—		(34,107	)		9.57
Forfeited		—		—		—			—
Unvested at the end of period		—	$	—		15,000		$	7.92

The Company recognized

and

$87,000

of compensation expense related to the restricted stock awards during the

three

month periods ended

December

31,

2016

and

2015,

respectively. As of

December

31,

2016,

there was no unrecognized compensation cost related to restricted stock awards. No restricted stock was granted during the

three

month period ended

December

31,

2016.

An aggregate of

5,000

shares of restricted stock was granted during the

three

month period ended

December

31,

2015.

The fair value of the awards vested during the

three

month periods ended

December

31,

2016

and

2015

was

and

$40,000,

respectively.

The Company recognized an aggregate total of

($6,000)

and

$283,000

in compensation (benefit) expense for the

three

month periods ended

December

31,

2016

and

2015,

respectively, for the stock options and restricted stock grants. As of

December

31,

2016,

there was a total of

$76,000

of unrecognized compensation cost related to unvested stock options and restricted stock grants. The method used to calculate stock based compensation is the straight line pro-rated method.