STOCK COMPENSATION PLANS AND STOCK BASED COMPENSATION

Stock Compensation Plans

Under the Company’s prior stock compensation plans (the 1999 Stock Option Plan, the 2003 Stock Option Plan and the MRDP), the Company was able to grant options and awards for restricted stock for up to a combined total of 2,151,500 shares of common stock to employees, officers, directors and directors emeriti. Under the Company's 2014 Equity Incentive Plan (collectively with the 1999 Stock Option Plan, the 2003 Stock Option Plan and the MRDP, "the Plans"), which was approved by shareholders on January 27, 2015, the Company is able to grant options, awards of restricted stock and awards of restricted stock with performance measures for up to 352,366 shares of common stock to employees, officers, directors and directors emeriti. Shares issued may be purchased in the open market or may be issued from authorized and unissued shares. The exercise price of each option equals the fair market value of the Company’s common stock on the date of grant. At March 31, 2015, there were 352,366 shares available for future grant under the 2014 Equity Incentive Plan. There are no options or awards for restricted stock available for future grant under the 2003 Stock Option Plan, the 1999 Stock Option Plan or the MRDP.

Activity under the Plans for the six months ended March 31, 2015 and 2014 is as follows:



	Six Months Ended March 31, 2015				Six Months Ended March 31, 2014
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Options outstanding, beginning of period	221,400		$	7.49	162,946		$	6.96
Exercised	(5,300	)	4.62		(3,600	)	4.65
Granted	—		—		135,000		9.29
Forfeited	(200	)	4.55		(65,946	)	9.97
Options outstanding, end of period	215,900		$	7.57	228,400		$	7.50

Options exercisable, end of period	74,700		$	6.47	38,400		$	4.90

The aggregate intrinsic value of options outstanding at March 31, 2015 was $664,000.

At March 31, 2015, there were 141,200 unvested options with an aggregate grant date fair value of $348,000, all of which the Company assumes will vest. The aggregate intrinsic value of unvested options at March 31, 2015 was $352,000. There were 42,900 options with an aggregate grant date fair value of $100,000 that vested during the six months ended March 31, 2015.

At March 31, 2014, there were 190,000 unvested options with an aggregate grant date fair value of $464,000. There were 14,600 options with an aggregate grant date fair value of $26,000 that vested during the six months ended March 31, 2014.

The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards with the weighted average assumptions noted in the following table. The risk-free interest rate is based on the U.S. Treasury rate of a similar term as the stock option at the particular grant date. The expected life is based on historical data, vesting terms and estimated exercise dates. The expected dividend yield is based on the most recent quarterly dividend on an annualized basis in effect at the time the options were granted, adjusted, if appropriate for management's expectations regarding future dividends. The expected volatility is based on historical volatility of the Company’s stock price. There were no options granted during the six months ended March 31, 2015. There were 135,000 options granted during the six months ended March 31, 2014 with an aggregate grant date fair value of $349,000.

The weighted average assumptions used for options granted during the six months ended March 31, 2014 were:




Expected volatility	39		%
Expected term (in years)	5
Expected dividend yield	2.51		%
Risk free interest rate	1.41		%
Grant date fair value per share	$	2.59

At both March 31, 2015 and 2014, there were no unvested MRDP shares and no shares available for future awards. There were 3,254 MRDP shares that vested during the six months ended March 31, 2014 with an aggregated grant date fair value of $23,000.

Expense for Stock Compensation Plans

Compensation expense during the six months ended March 31, 2015 and 2014 for all stock-based plans were as follows (in thousands):



	Six Months Ended March 31,
	2015			2014
	Stock Options		Stock Grants	Stock Options		Stock Grants
Compensation expense	$	60	—	$	47	2
Less: related tax benefit recognized	2		—	—		—
Total	$	58	—	$	47	2

As of March 31, 2015, the compensation expense yet to be recognized for stock options that have been awarded but not vested for the years ending September 30 is as follows (in thousands):



	Stock Options
Remainder of 2015	$	53
2016	106
2017	98
2018	67
2019	9
Total	$	333