5.	Stock Options and Employee Stock Purchase Plan

On March 5, 2009, Stockholders approved adoption of the 2009 Stock Incentive Plan (the “2009 Plan”). The 2009 Plan, beginning October 1, 2009, replaced two former employee stock option plans that terminated coincident with the effectiveness of the 2009 Plan. On March 7, 2012, Stockholders approved an amendment to increase the number of shares of common stock subject to this plan by 600,000 and to increase the number of shares for the directors’ stock option plan by 50,000 shares. On March 6, 2014, Stockholders approved an amendment to increase the number of shares of common stock subject to the 2009 Plan by 800,000 to an aggregated total of 1,800,000 shares of common stock. The Company maintains a directors’ stock option plan under which options may be issued to purchase up to an aggregate of 100,000 shares of common stock. Each non-employee director, who is re-elected or who continues as a member of the board of directors on each annual meeting date and on each subsequent meeting of Stockholders, will be granted options to purchase 2,000 shares of common stock under the directors’ plan, or at other times or amounts at the discretion of the Board of Directors.

Each option entitles the holder to purchase one share of common stock at the specified option price. The exercise price of each option granted under the plans was set at the fair market value of the Company’s common stock at the respective grant date. Options vest at various intervals and expire at the earlier of termination of employment, discontinuance of service on the board of directors, ten years from the grant date or at such times as are set by the Company at the date of grant.

The Company has applied a graded (tranche-by-tranche) attribution method and expenses share-based compensation on an accelerated basis over the vesting period of the share award, net of estimated forfeitures.

The number of shares available for grant under these plans at September 30 is as follows:


	Qualified Employee Stock Option Plans			Director Stock Option Plans
Shares available for grant at September 30, 2013		357,605			32,000
Stockholder approval to increase shares		800,000			—
Options granted		(328,760	)		(12,500	)
Options forfeited		24,921			—

Shares available for grant at September 30, 2014		853,766			19,500
Options granted		(307,119	)		(10,500	)
Options forfeited		39,384			8,000

Shares available for grant at September 30, 2015		586,031			17,000

The following table summarizes information with respect to outstanding stock options.


	Years Ended September 30,
	2015					2014
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Outstanding at beginning of year		1,240,941		$	10.31		997,045		$	10.54
Granted		317,619			9.22		341,260			10.11
Exercised		(11,117	)		7.27		(38,143	)		7.43
Forfeited		(98,034	)		11.27		(59,221	)		14.90

Outstanding at end of year		1,449,409		$	10.03		1,240,941		$	10.31

Exercisable at end of year		885,777					700,922

Weighted average fair value of options granted during the year	$	3.18				$	3.41

The options outstanding at September 30, 2015 have been segregated into four ranges for additional disclosure as follows:


	Options Outstanding						Options Exercisable
Exercise Prices	Options Outstanding at September 30, 2015		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Options Exercisable at September 30, 2015		Weighted Average Exercise Price
$ 4.50 to $9.90		1,037,217		7.2	$	8.41		575,793	$	7.94
10.00 to 14.83		282,469		7.0		11.35		180,261		11.76
15.00 to 19.00		94,965		3.0		15.78		94,965		15.78
21.40 to 46.90		34,758		1.1		30.47		34,758		30.47

		1,449,409						885,777

At September 30, 2015, there was $676 thousand of total unrecognized compensation cost related to non-vested stock-based compensation, including $98 thousand of estimated forfeitures. The cost is expected to be recognized over a weighted-average life of 1.8 years.

A summary of the status of the Company’s non-vested shares at September 30, 2015 and for the year then ended is presented below:


	Shares			Weighted Average Grant Date Fair Value
Non-vested shares at October 1, 2014		539,519		$	3.29
Granted		317,619			3.18
Vested		(268,217	)		2.70
Forfeited		(25,289	)		1.94

Non-vested shares at September 30, 2015		563,632		$	3.35

Stock-based compensation recorded in the year ended September 30, 2015 of $963 thousand was allocated $606 thousand to selling and marketing expenses, $101 thousand to general and administrative expenses and $256 thousand to product development expenses. Stock-based compensation recorded in the year ended September 30, 2014 of $921 thousand was allocated $617 thousand to selling and marketing expenses, $54 thousand to general and administrative expenses and $250 thousand to product development expenses. Cash received from exercises under all stock option plans and warrants for the years ended September 30, 2015 and 2014 was $41 thousand and $286 thousand, respectively. There were no tax benefits realized for tax deductions from option exercises for the years ended September 30, 2015 and 2014. The Company currently expects to satisfy stock-based awards with registered shares available to be issued.

The Company also has an Employee Stock Purchase Plan (Purchase Plan) under which an aggregate of 150,000 common shares may be issued. The Shareholders approved an amendment to increase the number of shares of common stock subject to the plan from 100,000 to 150,000 at the Company’s annual meeting in March 2014. All employees who have completed 90 days of employment with the Company on the first day of each offering period and customarily work twenty hours per week or more are eligible to participate in the Purchase Plan. An employee who, after the grant of an option to purchase, would hold common stock and/or hold outstanding options to purchase stock possessing 5% or more of the total combined voting power or value of the Company will not be eligible to participate. Eligible employees may make contributions through payroll deductions of up to 10% of their compensation. No participant in the Purchase Plan is permitted to purchase common stock under the Purchase Plan if such option would permit his or her rights to purchase stock under the Purchase Plan to accrue at a rate that exceeds $25,000 of the fair market value of such shares, or that exceeds 1,000 shares, for each calendar year. The Company makes a bi-annual offering to eligible employees of options to purchase shares of common stock under the Purchase Plan on the first trading day of January and July. Each offering period is for a period of six months from the date of the offering, and each eligible employee as of the date of offering is entitled to purchase shares of common stock at a purchase price equal to the lower of 85% of the fair market value of common stock on the first or last trading day of the offering period. A total of 38,416 shares are available to be issued under the plan. There were 14,067 and 11,863 shares purchased by employees during fiscal 2015 and 2014, respectively. The Company recorded stock compensation expense under this plan of $22 and $21 thousand during fiscal 2015 and 2014, respectively. Cash received from issuance of stock under this plan was $85 and $75 thousand during fiscal 2015 and 2014, respectively.