Stock-based Compensatin, Equity Grants, and Warrants

3 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation, Equity Grants, and Warrants

Stock-based compensation expense

All grants of equity are presently made under the 2006 Long Term Incentive Plan. As of December 31, 2015, approximately 0.8 million shares remained available for grant under the Plan. Options issued under the Plan are designated as either an incentive stock or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Exercisability of option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued shares.

Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our statement of income:



		(in thousands)
		Three Months Ended
	Ref	December 31,
		2015		2014
DLH employees		$	8	$	96
Non-employee directors	(a)	324		177
Total compensation expense		$	332	$	273

Ref (a): Equity grants of restricted stock, in accordance with DLH compensation policy for non-employee directors. The shares granted in first quarter 2016 vested immediately, and stock expense of approximately $304 thousand was recognized accordingly. For the three months ended December 31, 2015, non-employee directors stock expense includes approximately $20 thousand related to prior year equity grants for which performance criteria was achieved in October 2015.

Unrecognized stock-based compensation expense



		(in thousands)
		Three Months Ended
		December 31,
	Ref	2015		2014
Unrecognized expense for DLH employees	(a)	$	36	$	249
Unrecognized expense for non-employee directors	(b)	76		125
Total unrecognized expense		$	112	$	374

Ref (a): Compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance.

Ref (b): Unrecognized stock expense related to prior years equity grants of restricted stock to non-employee directors, based on performance criteria, in accordance with DLH compensation policy for non-employee directors. The shares will vest and expense will be recorded upon future satisfaction of specified performance.

Stock option activity for the three months ended December 31, 2015

The aggregate intrinsic value in the table below represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in the money options on those dates. This amount will change based on the fair market value of the Company’s stock.

(in years)

Weighted

Average

(in thousands)

Average

Remaining

Aggregate

Number of

Exercise

Contractual

Intrinsic

Ref

Price

Term

Value

Options outstanding, September 30, 2015

2,324

$1.40

6.81

3,649

Granted

—

Exercised

(a)

(100

)

$1.23

Options outstanding, December 31, 2015

2,224

$1.40

6.49

6,512

Ref (a): Shares exercised by an executive officer in December 2015.

Stock options shares outstanding, vested and unvested for the period ended



		(in thousands)
		Number of Shares
		December 31,
	Ref	2015	2014
Vested and exercisable		993	968
Unvested	(a)	1,231	1,368
Options outstanding		2,224	2,336

Ref (a): Certain awards vest upon satisfaction of certain performance criteria.