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Note 4 - Stock Based Compensation
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Dec. 31, 2011
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| Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
Note
4. Stock Based Compensation
The
Company recorded $112,153 of compensation expense related to
current and past option grants, restricted stock grants and
the Company’s Employee Stock Purchase Plan for the
three-month period ended December 31, 2011. The
Company recorded $58,287 of compensation expense related to
current and past equity awards for the three-month period
ended December 31, 2010. 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, 2011,
$1,021,887 of total unrecognized compensation expense related
to non-vested awards is expected to be recognized over a
weighted average period of approximately 5.6 years.
We
used the Black-Scholes option pricing model to determine the
weighted average fair value of options during the three-month
period ended December 31, 2010. The
weighted-average fair values at the grant date for options
issued during the three months ended December 31, 2010 was
$1.92. This fair value was estimated at grant date using the
weighted-average assumptions listed below.
During
the three month period ended December 31, 2011, the Company
did not grant any incentive stock options or non-qualified
stock options. During the three-month period ended December
31, 2010, the Company granted key employees incentive stock
options to purchase an aggregate of 5,000 shares of common
stock with a contractual term of 7 years, a three year
vesting term and an exercise price of $3.00 with a fair value
of $1.92 per share.
During
the three month period ended December 31, 2011, exercised
stock options totaled 46,106 shares, resulting in $37,681 of
proceeds to the Company. During the three month period ended
December 31, 2010, exercised stock options totaled 7,132
shares, resulting in $10,530 of proceeds to the
Company.
The
expected stock price volatility is based on the historical
volatility of the Company’s stock for a period
approximating the expected life. The expected life represents
the period of time that options are expected to be
outstanding after their grant date. The risk-free interest
rate reflects the interest rate at grant date on zero-coupon
U.S. governmental bonds having a remaining life similar to
the expected option term.
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, 2011 and December 31, 2010, employees purchased
11,267 and 17,710 shares at a price of $6.24 and $2.13 per
share, respectively. After the employee purchase on December
31, 2011, 256,504 shares of common stock were available for
future purchase under the ESPP.
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