Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Stock-based Compensation

v3.5.0.2
Note 4 - Stock-based Compensation
9 Months Ended
Jun. 30, 2016
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Note 4. Stock-Based Compensation
 
The Company recorded $370,465 and $843,658 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 nine months ended June 30, 2016, respectively. For the three months ended June 30, 2016, $336,310 of this expense is included in selling, general and administrative expense, and $34,155 is included in cost of sales. For the nine months ended June 30, 2016, $765,347 of this expense is included in selling, general and administrative expense, and $78,311 is included in cost of sales. The Company recorded $280,526 and $844,992 of compensation expense related to current and past equity awards for the three and nine months ended June 30, 2015, respectively. For the three and nine months ended June 30, 2015, all of this expense was included in selling, general and administrative expense. As of June 30, 2016, $7,895,912 of total unrecognized compensation expense related to non-vested equity awards is expected to be recognized over a period of approximately 8.3 years.
 
There were no stock options granted during the nine month periods ended June 30, 2016 or June 30, 2015. The following is a summary of stock option activity during the nine months ended June 30, 2016:
 
    Number of
options
  Weighted average
exercise price
Outstanding at September 30, 2015     297,384     $ 5.29  
Granted     -       -  
Exercised     (172,450 )     5.88  
Cancelled or Forfeited     -       -  
Outstanding at June 30, 2016     124,934     $ 4.47  
 
The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. As of June 30, 2016, the weighted average remaining contractual term for all outstanding and exercisable stock options was 1.6 years and their aggregate intrinsic value was $1,676,391. During the nine months ended June 30, 2016, the Company received proceeds of $473,651 from the exercise of stock options. During the nine months ended June 30, 2015, exercised stock options totaled 42,000 shares, resulting in $41,688 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 nine month period ended June 30, 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 259,555 shares of common stock, with a vesting term of three to five years and a fair value of $17.43 per share during the nine month period ended June 30, 2016.
 
During the nine month period ended June 30, 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 nine month period ended June 30, 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     263,623       17.39  
Vested     (7,956 )     14.69  
Forfeited     (8,400 )     12.04  
Unvested at June 30, 2016     656,397     $ 13.23  
 
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 June 30, 2016 and December 31, 2015, employees purchased 11,966 and 10,352 shares at a price of $11.40 and $11.40 per share, respectively. After the employee purchase on June 30, 2016, 143,122 shares of common stock were available for future purchase under the ESPP.