Stock-Based Compensation

Stock-Based Plans –The 2007 Employee Stock Incentive Plan (the “2007 Plan), under which 500,000 shares could be granted, was adopted by the Board of Directors in April 2007, and approved by the shareholders in May 2007. The 2007 Plan was amended in 2009, 2014, and 2015 to add 2,500,000 shares. The Non-Employee Directors Stock Option Plan was approved by the shareholders in 1996 for issuance of up to 100,000 shares of Common Stock to directors. shares. The Non-Employee Directors Stock Option Plan was amended in 2005, 2009, and 2014 to add 400,000 shares.

Stock options issued under the terms of the plans have, or will have, an exercise price equal to or greater than the fair market value of the Common Stock at the date of the option grant and expire no later than 10 years from the date of grant, with the most recent grant expiring in 2025. Options issued by the Company vest over 2 to 4 years. The Company may also grant restricted stock awards under the 2007 Plan.

As of September 30, 2015 and 2014, the unamortized expense related to restricted shares was less than $0.1 million and $0.1 million, respectively, and it is expected to be recognized over one year.

Restricted stock transactions and outstanding awards are summarized as follows:



	Years Ended September 30,
	2015				2014				2013
	Awards		Weighted Average Grant Date Fair Value		Awards		Weighted Average Grant Date Fair Value		Awards		Weighted Average Grant Date Fair Value
Beginning Outstanding	35,203		$	10.13	69,154		$	10.13	127,975		$	9.06
Awarded	—		—		—		—		—		—
Released	(21,663	)	11.47		(33,951	)	10.13		(58,771	)	7.81
Forfeited	—		—		—		—		(50	)	7.98
Ending Outstanding	13,540		$	7.98	35,203		$	10.13	69,154		$	10.13

Stock-based compensation plans are summarized in the table below:



Name of Plan	Shares Authorized	Shares Available	Options Outstanding	Plan Expiration
2007 Employee Stock Incentive Plan	3,000,000	916,038	1,425,297	Mar. 2020
1998 Employee Stock Option Plan	500,000	—	23,710	Jan. 2008
Non-Employee Directors Stock Option Plan	500,000	167,600	178,470	Mar. 2020
		1,083,638	1,627,477

Stock options were valued using the Black-Scholes option pricing model. See Note 1 for further discussion. Stock option transactions and the options outstanding are summarized as follows:



	Years Ended September 30,
	2015					2014					2013
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding at beginning of period	1,063,324			$	7.37	1,059,567			$	6.71	891,293			$	9.37
Granted	327,500			9.74		272,906			7.01		312,850			2.95
Assumed - merger	367,229			14.19		—					—
Exercised	(94,701		)	5.52		(263,643		)	4.31		(8,450		)	3.08
Forfeited/canceled	(35,875		)	24.71		(5,506		)	9.63		(136,126		)	15.75
Outstanding at end of period	1,627,477			$	9.11	1,063,324			$	7.37	1,059,567			$	6.71

Exercisable at end of period	1,002,421			$	9.74	674,237			$	8.18	874,591			$	7.13

Weighted average grant-date fair value of options granted during the period	$	5.91				$	4.38				$	1.82

The following tables summarize information for stock options outstanding and exercisable as of September 30, 2015:



	Options Outstanding
Range of Exercise Prices	Number Outstanding	Remaining Contractual Life	Average Exercise Price		Aggregate Intrinsic Value
		(in years)			(in thousands)
2.95-3.30	165,310	7.1	$	2.96
3.80-7.00	143,402	3.4	5.69
7.01-7.14	269,106	8.2	7.01
7.15-7.87	60,223	5.5	7.60
7.88-8.00	246,806	6.2	7.98
8.01-9.94	99,338	6.4	8.93
9.95-10.49	282,500	9.1	9.98
10.50-15.23	184,041	2.7	11.80
15.24-22.26	161,489	3.1	18.00
27.47-25.00	15,262	2.5	27.47
	1,627,477	6.1	$	9.11	$	238

Vested and expected to vest as of September 30, 2015	1,624,545	6.1	$	9.11	$	238



	Options Exercisable
Range of Exercise Prices	Number Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value
				(in thousands)
2.95-3.30	99,968	$	2.97
3.80-7.00	143,402	5.69
7.01-7.14	81,327	7.01
7.15-7.87	23,144	7.15
7.88-8.00	246,806	7.98
8.01-9.94	43,566	9.42
9.95-10.49	6,000	9.98
10.50-15.23	181,457	11.81
15.24-22.26	161,489	18.00
27.47-25.00	15,262	27.47
	1,002,421	9.74		$	150

The aggregate intrinsic value in the tables above represents the total pretax intrinsic value, based on the Company’s closing stock price of $4.30 per share as of September 30, 2015, which would have been received by the option holders had all option holders exercised their options as of that date. The total intrinsic value of stock options exercised during the fiscal years ended September 30, 2015, 2014 and 2013 was $1.1 million, $1.3 million and less than $0.1 million, respectively.