Annual report pursuant to Section 13 and 15(d)

Stock Option Plans

v2.4.0.6
Stock Option Plans
 12 Months Ended
Sep. 30, 2011
Common Stock [Abstract]  
Common Stock
16. Stock Option Plans

As of September 30, 2011, there were stock options outstanding under the Company's 1995 Stock Option Plan, Second Amended and Restated 1997 Stock Option Plan and 1999 Stock Option Plan. All three plans were approved by the shareholders. The 1995 Stock Option Plan and the 1999 Stock Option Plan have expired, and no further options may be granted under those plans. During fiscal 2009, the Second Amended and Restated 1997 Stock Option Plan was amended to make an additional 592,000 options available for granting and as of September 30, 2011 there were 720,840 shares available for issuance under the plan. The plans granted specified numbers of options to non-employee directors, and they authorized the Compensation Committee of the Board of Directors to grant either incentive or non-statutory stock options to employees. Vesting periods are established by the Compensation Committee at the time of grant. All stock options outstanding as of September 30, 2011 were non-statutory stock options, had exercise prices equal to the market price on the date of grant, and had expiration dates ten years from the date of grant.
 
A summary of stock option activity is as follows:
   
Year Ended September 30
  
(Number of Options in Thousands)
  
2011
    
2010
  
             
Number of options outstanding:
            
Beginning of year
     388       630  
Granted
     -       10  
Exercised
     (12 )     -  
Terminated
     (75 )     (253 )
                 
End of year
     301       387  
                 
Number of options exercisable at end of year
     255       318  
Number of options available for grant at end of year
     731       686  
                 
Weighted average option prices per share:
                
Granted during the year
   $ -     $ .31  
Exercised during the year
     .40       -  
Terminated during the year
     1.26       .83  
Outstanding at end of year
     .95       .99  
Exercisable at end of year
     1.00       1.06  

Stock options outstanding as of September 30, 2011 were as follows (number of options in thousands):

Range of
Exercise Prices
    
Number
Outstanding
    
Weighted
Average Price
    
Number
Exercisable
    
Weighted
Average Price
    
Average
Remaining Life
(Years)
  
                                 
Under $1.00
       235     $ .73       189     $ .75       6.08  
$ 1.25 to $2.39       66       1.72       66       1.72       .88  

As of September 30, 2011, the aggregate intrinsic value of outstanding stock options and exercisable stock options was zero. The stock options exercised during the year had an intrinsic value of $.12 a share.

The average fair value of stock options granted was estimated to be $0.17 per share in fiscal 2010. No stock options were issued in fiscal year 2011. This estimate was made using the Black-Scholes option pricing model and the following weighted average assumptions:

 
  
2011
    
2010
  
             
Expected option life (years)
     5.0       5.0  
Expected stock price volatility
     65 %     65 %
Expected dividend yield
     - %     - %
Risk-free interest rate
     .96 %     1.5 %

Stock-based compensation expense attributable to stock options was $8,000 in fiscal 2011 and $11,000 in fiscal 2010. As of September 30, 2011, there was $22,000 of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was 4 years.