Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Stock Based Compensation

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Note 4 - Stock Based Compensation
 3 Months Ended
Dec. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Note 4.  Stock Based Compensation

The Company recorded $186,049 of compensation expense related to current and past option grants, restricted stock grants and the Company’s Employee Stock Purchase Plan for the three months ended December 31, 2012.  The Company recorded $112,153 of compensation expense related to current and past equity awards for the three months ended December 31, 2011.  This expense is included in selling, general and administrative expense.  There was no tax benefit from recording this non-cash expense.  As of December 31, 2012, $2,296,651 of total unrecognized compensation expense related to non-vested equity awards is expected to be recognized over a weighted average period of approximately 4.7 years.

There were no stock options granted during the three-month periods ended December 31, 2012 and December 31, 2011. The following is a summary of stock option activity during the three months ended December 31, 2012:

   
Number of
options
   
Weighted average
exercise price
 
Outstanding at September 30, 2012
    1,029,176     $ 3.07  
   Granted
    -       -  
   Exercised
    (16,037 )     1.63  
   Cancelled or Forfeited
    (5,500 )     5.33  
Outstanding at December 31, 2012
    1,007,639     $ 3.08  

The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. At December 31, 2012, the weighted average remaining contractual term for all outstanding stock options was 4.6 years and their aggregate intrinsic value was $1,992,600. At December 31, 2012, the weighted average remaining contractual terms of options that were exercisable was 4.6 years and their aggregate intrinsic value was $1,879,969. During the three months ended December 31, 2012, the Company received proceeds of $7,625 from the exercise of stock options. During the three months ended December 31, 2011, exercised stock options totaled 74,251 shares, resulting in $37,681 of proceeds to the Company.

Restricted Stock

The Company’s 2007 Stock Compensation Plan permits its Compensation Committee to grant other stock-based awards. The Company makes restricted stock grants to key employees that vest over three to five years. Restricted stock transactions during the three-month period ended December 31, 2012 is summarized as follows:

   
Number of
shares
   
Weighted average
grant date fair value
 
Unvested shares at September 30, 2012
    363,336     $ 5.07  
   Granted
    -       -  
   Vested
    -       -  
   Forfeited
    (2,500 )     5.10  
Unvested at December 31, 2012
    360,836     $ 5.07  

Employee Stock Purchase Plan

Clearfield, Inc.’s Employee Stock Purchase Plan (“ESPP”) allows participating employees to purchase shares of the Company’s common stock at a discount through payroll deductions. The ESPP is available to all employees subject to certain eligibility requirements. Terms of the ESPP provide that participating employees may purchase the Company’s common stock on a voluntary after-tax basis. Employees may purchase the Company’s common stock at a price that is no less than the lower of 85% of the fair market value of one share of common stock at the beginning or end of each stock purchase period or phase. The ESPP is carried out in six month phases, with phases beginning on January 1 and July 1 of each calendar year. For the phases that ended on December 31, 2012 and December 31, 2011, employees purchased 18,000 and 17,662 shares at a price of $3.82 and $4.09 per share, respectively. After the employee purchase on December 31, 2012, 220,842 shares of common stock were available for future purchase under the ESPP.