Stock-based Compensatin, Equity Grants, and Warrants

6 Months Ended

Mar. 31, 2016

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

Stock-based Compensation, Equity Grants, and Warrants

Stock-based compensation expense

All grants of equity represented in these financial statements for the period ended March 31, 2016, were made under the 2006 Long Term Incentive Plan. The 2006 plan expired on February 25, 2016, upon shareholders' approval of the 2016 Omnibus Equity Incentive Plan. No awards have been issued under the newly adopted 2016 Plan, and as of March 31, 2016, there were 1.0 million shares available for grant.

Options issued under the 2006 Plan were designated as either an incentive stock or a non-statutory stock option. No option was 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 operations:



		(in thousands)				(in thousands)
		Three Months Ended				Six Months Ended
	Ref	March 31,				March 31,
		2016		2015		2016		2015
DLH employees		$	6	$	72	$	14	$	169
Non-employee directors	(a)	4		—		328		177
Total stock option expense		$	10	$	72	$	342	$	346

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 six months ended March 31, 2016, non-employee directors stock expense includes approximately $25 thousand related to prior year equity grants for which performance criteria was achieved in October 2015.

Unrecognized stock-based compensation expense



		(in thousands)
		Six Months Ended
		March 31,
	Ref	2016		2015
Unrecognized expense for DLH employees	(a)	$	30	$	177
Unrecognized expense for non-employee directors	(b)	71		125
Total unrecognized expense		$	101	$	302

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 six months ended March 31, 2016

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

)

$1.40

Options outstanding, March 31, 2016

2,224

$1.40

6.26

5,711

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
		March 31,
	Ref	2016	2015
Vested and exercisable		1,540	968
Unvested	(a)	684	1,368
Options outstanding		2,224	2,336

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