Equity

Equity Plans

We provide long-term incentives to eligible officers, directors, and employees in the form of equity-based awards. We maintain three equity incentive compensation plans, collectively described below as our Equity Plans:


•	the 2000 Stock Option Plan (2000 Plan),


•	the 2010 Equity Incentive Plan (2010 Equity Plan),


•	the 2012 Equity Incentive Plan (2012 Equity Plan),


•	the 2007 Directors' Stock Award Plan (Directors' Plan).

We issue new shares of common stock to satisfy awards issued under our Equity Plans.

Stock Options

Most of our stock options vest and become exercisable over a four to five year period and have a contractual life of 10 years. Certain stock options awarded are intended to qualify as incentive stock options pursuant to Section 422A of the Internal Revenue Code.

The following table summarizes stock option activity under the Equity Plans for the three months ended December 31, 2015:



	Number of Shares		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (*) (in thousands)
Outstanding as of September 30, 2015	696,459		$22.47
Granted	9,200		$7.29
Exercised	(37,413	)	$4.98		$	80
Forfeited	(2,200	)	$5.61
Expired	(13,709	)	$29.56
Outstanding as of December 31, 2015	652,337		$23.17	2.80	$	256
Exercisable as of December 31, 2015	601,638		$24.59	2.26	$	240
Vested and expected to vest as of December 31, 2015	642,096		$23.43	2.70	$	254

(*) Intrinsic value for stock options represents the “in-the-money” portion or the positive variance between a stock option's exercise price and the underlying stock price. For the three months ended December 31, 2014, the intrinsic value of options exercised was $49,000.

As of December 31, 2015, there was approximately $0.2 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to non-vested stock options granted under the Equity Plans which is expected to be recognized over an estimated weighted average life of 4.0 years.

On December 10, 2014, in connection with the sale of the Photovoltaics Business, which constituted a change in control, the terms of approximately 56,000 stock options for approximately 80 employees were modified to include accelerated vesting effective as of that date. The total incremental benefit resulting from the modifications was approximately $0.2 million and is included in the Company's income from discontinued operations, net of tax, for the three months ended December 31, 2014.

Valuation Assumptions

The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option valuation model, adhering to the straight-line attribution approach using the following weighted-average assumptions, of which the expected term and stock price volatility rate are highly subjective:



	For the three months ended December 31,
	2015		2014
Black-Scholes weighted average assumptions:
Expected dividend rate	—	%	—		%
Expected stock price volatility rate	61.6	%	82.5		%
Risk-free interest rate	1.8	%	1.9		%
Expected term (in years)	6.0		6.0

Weighted average grant date fair value per share of stock options granted:	$4.18		$	3.63

Restricted Stock

Restricted stock units (RSUs) granted under the 2010 Equity Plan and 2012 Equity Plan typically vest over 3 years and are subject to forfeiture if employment terminates prior to the lapse of the restrictions. RSUs are not considered issued or outstanding common stock until they vest.

The following table summarizes the activity related to RSUs for the three months ended December 31, 2015:



Restricted Stock Activity	Restricted Stock Units
	Number of Shares		Weighted Average Grant Date Fair Value
Non-vested as of September 30, 2015	570,231		$5.26
Granted	12,000		$7.82
Vested	(266	)	$4.35
Forfeited	(7,166	)	$5.15
Non-vested as of December 31, 2015	574,799		$5.31

As of December 31, 2015, there was approximately $1.9 million of remaining unamortized stock-based compensation expense, net of estimated forfeitures, associated with RSUs, which will be expensed over a weighted average remaining service period of approximately 1.8 years. The 0.6 million outstanding non-vested RSUs have an aggregate intrinsic value of approximately $3.5 million and a weighted average remaining contractual term of 0.9 years. For the three months ended December 31, 2015 and 2014, the intrinsic value of RSUs vested was approximately $1,800 and $2.1 million, respectively. Of the 0.6 million outstanding non-vested RSUs at December 31, 2015, approximately 0.5 million are expected to vest and have an aggregate intrinsic value of approximately $3.4 million and a weighted average remaining contractual term of 0.9 years. There were no RSUs granted for the three months ended December 31, 2014.

On December 10, 2014, in connection with the sale of the Photovoltaics Business, which constituted a change in control, the terms of approximately 147,000 RSUs for approximately 80 employees were modified to include accelerated vesting effective as of that date. The total incremental expense resulting from the modifications was approximately $49,000 and is included in the Company's income from discontinued operations, net of tax, for the three months ended December 31, 2014. In total, approximately 0.3 million RSU's vested due to change in control provisions.

Stock-based compensation

The effect of recording stock-based compensation expense was as follows:



Stock-based Compensation Expense - by award type	For the three months ended December 31,
(in thousands)	2015		2014
Employee stock options	$	6	$	177
Restricted stock awards and units	266		1,259
Employee stock purchase plan	55		50
401(k) match in common stock	—		80
Outside director fees in common stock	36		208
Total stock-based compensation expense	$	363	$	1,774



Stock-based Compensation Expense - by expense type	For the three months ended December 31,
(in thousands)	2015		2014
Cost of revenue	$	69	$	104
Selling, general, and administrative	188		1,565
Research and development	106		105
Total stock-based compensation expense	$	363	$	1,774

The stock based compensation expense above relates to continuing operations. Included within discontinued operations is approximately $24,000 and $0.8 million of stock based compensation expense for the three months ended December 31, 2015 and 2014, respectively.

401(k) Plan

We have a savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under this savings plan, participating employees may defer a portion of their pretax earnings, up to the Internal Revenue Service annual contribution limit. All employer contributions were made in common stock through June 2015 and since then have been made in cash. Our matching contribution in cash for the three months ended December 31, 2015 was approximately $0.1 million. For the three months ended December 31, 2014 we contributed approximately $0.1 million in common stock to the savings plan. All participant accounts had their holdings in company stock liquidated as of December 3, 2015.

Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share:



Basic and Diluted Net (Loss) Income Per Share	For the three months ended December 31,
(in thousands, except per share)	2015			2014

Numerator:
Loss from continuing operations	$	(134	)	$	(3,130	)
Income from discontinued operations	1,121			59,258
Undistributed earnings allocated to common shareholders for basic and diluted net (loss) income per share	987			56,128
Denominator:
Denominator for basic net (loss) income per share - weighted average shares outstanding	25,697			31,217
Dilutive options outstanding, unvested stock units and ESPP	—			—
Denominator for diluted net (loss) income per share - adjusted weighted average shares outstanding	25,697			31,217

Net (loss) income per basic share:
Continuing operations	$	0.00		$	(0.10	)
Discontinued operations	0.04			1.90
Net income per basic share	$	0.04		$	1.80

Net (loss) income per diluted share:
Continuing operations	$	0.00		$	(0.10	)
Discontinued operations	$	0.04		$	1.90
Net income per diluted share	$	0.04		$	1.80
Weighted average antidilutive options, unvested restricted stock units and awards, warrants and ESPP shares excluded from the computation	858			2,649

Average market price of common stock	$	6.93		$	5.29

The antidilutive stock options, unvested stock and warrants were excluded from the computation of diluted net income (loss) per share due to the Company incurring a net loss for the periods presented.

Employee Stock Purchase Plan

We maintain an Employee Stock Purchase Plan (ESPP) that provides employees an opportunity to purchase common stock through payroll deductions. The ESPP is a 6-month duration plan with new participation periods beginning on February 25 and August 26 of each year. The purchase price is set at 85% of the average high and low market price of our common stock on either the first or last day of the participation period, whichever is lower, and annual contributions are limited to the lower of 10% of an employee's compensation or $25,000.

Future Issuances

As of December 31, 2015, we had common stock reserved for the following future issuances:



Future Issuances	Number of Common Stock Shares Available for Future Issuances
Exercise of outstanding stock options	652,337
Unvested restricted stock units	574,799
Purchases under the employee stock purchase plan	971,728
Issuance of stock-based awards under the Equity Plans	609,787
Purchases under the officer and director share purchase plan	88,741
Issuance of deferred stock-based awards under the Directors' Stock Award Plan, as amended	15,152
Grants of stock-based awards under the 2007 Directors' Stock Award Plan, as amended	193,010
Total reserved	3,105,554