Equity and Stock-Based Compensation

Stock-based compensation expense was $0.2 million in both the three months ended March 31, 2019 and 2018, and was $0.4 million and $0.5 million in the six months ended March 31, 2019 and 2018, respectively. Stock-based compensation expense is included in selling, general and administrative expenses.

The following table summarizes our stock option activity during the six months ended March 31, 2019:



	Options			Weighted Average Exercise Price
Outstanding at beginning of period	1,248,758			$	7.69
Granted	198,850			5.35
Exercised	(11,086		)	3.35
Forfeited	(258,930		)	9.02
Outstanding at end of period	1,177,592			$	7.04

Exercisable at end of period	914,159			$	7.50
Weighted average fair value of options granted during the period	$	3.08

As a result of the Separation Agreement entered into with the Company’s former Chief Executive Officer and President (see Note 3), vesting of 12,500 options was accelerated in the first quarter of 2019. Additionally, 122,500 options were unexercised at the end of the 90-day period following the Effective Date and were subsequently modified. The modification allows for an additional nine-month exercise period and resulted in approximately $108,000 of additional stock-based compensation expense, which was recorded in the second quarter of 2019.

The fair value of options was estimated at the applicable grant date using the Black-Scholes option pricing model with the following assumptions:



	Six Months Ended March 31, 2019
Risk free interest rate	3%
Expected life	6 years
Dividend rate	0%
Volatility	60%

On November 29, 2018, we announced that the Board of Directors of Amtech Systems, Inc. (the “Board”) approved a stock repurchase program, pursuant to which we may repurchase up to $4 million of our outstanding common stock, par value $0.01 per share, over a one-year period. Repurchases under the program will be made in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in compliance with the rules and regulations of the SEC; however, we have no obligation to repurchase shares and the timing, actual number, and value of shares to be repurchased is subject to management’s discretion and will depend on the Company’s stock price and other market conditions. Our Board may terminate the repurchase program at any time while it is in effect. We intend to retire any repurchased shares. There were no shares repurchased during the quarter ended March 31, 2019.