Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Stock-based Compensation

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Note 4 - Stock-based Compensation
6 Months Ended
Mar. 31, 2016
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Note 4. Stock-Based Compensation
 
The Company recorded $246,426 and $473,193 of compensation expense related to current and past option grants, restricted stock grants and the Company’s Employee Stock Purchase Plan (“ESPP”) for the three and six months ended March 31, 2016, respectively. For the three months ended March 31, 2016, $224,156 of this expense is included in selling, general and administrative expense, and $22,270 is included in cost of sales. For the six months ended March 31, 2016, $429,037 of this expense is included in selling, general and administrative expense, and $44,156 is included in cost of sales. The Company recorded $280,839 and $564,466 of compensation expense related to current and past equity awards for the three and six months ended March 31, 2015, respectively. For the three and six months ended March 31, 2015, all of this expense is included in selling, general and administrative expense. As of March 31, 2015, $3,959,018 of total unrecognized compensation expense related to non-vested equity awards is expected to be recognized over a period of approximately 8.6 years.
 
There were no stock options granted during the six month periods ended March 31, 2016 or March 31, 2015. The following is a summary of stock option activity during the six months ended March 31, 2016:
 
    Number of options   Weighted average exercise price
Outstanding at September 30, 2015     297,384     $ 5.29  
Granted     -       -  
Exercised     (57,050 )     5.60  
Cancelled or Forfeited     -       -  
Outstanding at March 31, 2016     240,334     $ 5.22  
 
The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. As of March 31, 2016, the weighted average remaining contractual term for all outstanding and exercisable stock options was 1.2 years and their aggregate intrinsic value was $2,608,019. During the six months ended March 31, 2016, the Company received proceeds of $84,738 from the exercise of stock options. During the six months ended March 31, 2015, exercised stock options totaled 40,000 shares, resulting in $28,967 of proceeds to the Company.
 
Restricted Stock
 
The Company’s 2007 Stock Compensation Plan permits its Compensation Committee to grant stock-based awards, including stock options and restricted stock, to key employees and non-employee directors. The Company has made restricted stock grants that vest over one to ten years.
 
During the six month period ended March 31, 2016, the Company granted non-employee directors restricted stock awards totaling 2,712 shares of common stock, with a vesting term of approximately one year and a fair value of $14.73 per share. The Company also granted outgoing non-employee directors fully-vested stock awards totaling 1,356 shares of common stock, with a fair value of $14.73 per share. Additionally, the Company granted employees restricted stock awards totaling 8,500 shares of common stock, with a vesting term of five years and a fair value of $13.64 per share during the six month period ended March 31, 2016.
 
During the six month period ended March 31, 2015, the Company granted non-employee directors restricted stock awards totaling 3,705 shares of common stock, with a vesting term of approximately one year and a fair value of $13.48 per share. Additionally, the Company granted employees restricted stock awards totaling 3,000 shares of common stock, with a vesting term of ten years and a fair value of $13.33 per share.
 
Restricted stock transactions during the six month period ended March 31, 2016 are summarized as follows:
 
    Number of shares   Weighted average grant date fair value
Unvested shares at September 30, 2015     409,130     $ 9.97  
Granted     12,568       13.99  
Vested     (5,956 )     14.09  
Forfeited     (8,400 )     12.04  
Unvested at March 31, 2016     407,342     $ 10.57  
 
Employee Stock Purchase Plan
 
Clearfield, Inc.’s 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, 2015 and December 31, 2014, employees purchased 10,352 and 10,097 shares at a price of $11.40 and $10.46 per share, respectively. After the employee purchase on December 31, 2015, 155,088 shares of common stock were available for future purchase under the ESPP.