Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Stock-based Compensation

v3.7.0.1
Note 4 - Stock-based Compensation
 6 Months Ended
Mar. 31, 2017
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Note
4.
Stock-Based Compensation
 
The Company recorded
$590,165
and
$1,183,911
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,
2017,
respectively. For the
three
months ended
March
31,
2017,
$535,464
of this expense is included in selling, general and administrative expense, and
$54,701
is included in cost of sales. For the
six
months ended
March
31,
2017,
$1,074,510
of this expense is included in selling, general and administrative expense, and
$109,401
is included in cost of sales. The Company recorded
$246,426
and
$473,193
of compensation expense related to current and past equity awards for the
three
and
six
months ended
March
31,
2016,
respectively. For the
three
months ended
March
31,
2016,
$224,156
of this expense was included in selling, general and administrative expense, and
$22,270
was included in cost of sales. For the
six
months ended
March
31,
2016,
$429,037
of this expense was included in selling, general and administrative expense, and
$44,156
was included in cost of sales. As of
March
31,
2017,
$6,324,696
of total unrecognized compensation expense related to non-vested equity awards is expected to be recognized over a period of approximately
7.6
years.
 
There were
no
stock options granted during the
six
month periods ended
March
31,
2017
or
March
31,
2016.
The following is a summary of stock option activity during the
six
months ended
March
31,
2017:
 
    Number of
options		   Weighted average
exercise price
Outstanding at September 30, 2016    
54,800
     $
3.13
  
Granted    
-
      
-
  
Exercised    
(15,750
 )    
3.98
  
Cancelled or Forfeited    
-
      
-
  
Outstanding at March 31, 2017    
39,050
     $
2.78
  
 
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,
2017,
the weighted average remaining contractual term for all outstanding and exercisable stock options was
3.2
years and their aggregate intrinsic value was
$533,632.
During the
six
months ended
March
31,
2017,
the Company received proceeds of
$28,459
from the exercise of stock options. During the
six
months ended
March
31,
2016,
exercised stock options totaled
57,050
shares, resulting in
$84,738
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,
2017,
the Company granted non-employee directors restricted stock awards totaling
3,795
shares of common stock, with a vesting term of approximately
one
year and a fair value of
$16.45
per share.
 
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.
 
Restricted stock transactions during the
six
month period ended
March
31,
2017
are summarized as follows:
 
    Number of
shares		   Weighted average grant
date fair value
Unvested shares at September 30, 2016    
563,570
     $
14.26
  
Granted    
3,795
      
16.45
  
Vested    
(5,262
 )    
14.66
  
Forfeited    
(7,526
 )    
14.91
  
Unvested at March 31, 2017    
554,577
     $
14.26
  
 
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,
2016
and
December
31,
2015,
employees purchased
11,144
and
10,352
shares at a price of
$15.21
and
$11.40
per share, respectively. After the employee purchase on
December
31,
2016,
131,978
shares of common stock were available for future purchase under the ESPP.