Common Stock Incentive, Stock Purchase Plans, and Other Compensation Plans

2008 Stock Incentive Plan (“2008 Plan”)

The 2008 Plan was created to promote growth of the Company by aligning the long-term financial success of the Company with the employees, directors, and consultants. At the time of approval, 5,500,000 shares of Astrotech’s common stock were reserved for issuance under this plan. The 2008 Plan, administered by the Compensation Committee of the Board of Directors, provides for granting of incentive awards in the form of stock options, stock appreciation rights (“SARs”), and restricted stock to employees, directors, and consultants of the Company. As of June 30, 2016, there were 10,000 shares available for grant under the 2008 Plan.

2011 Stock Incentive Plan (“2011 Plan”)

The 2011 Plan was designed to increase shareholder value by compensating employees over the long term. The plan is to be used to promote long-term financial success and execution of the Company’s business strategy. At the time of approval, 1,750,000 shares of Astrotech’s common stock were reserved for issuance under this plan. On June 26, 2014, an additional 2,000,000 shares of Astrotech’s common stock were approved for issuance under this plan. The 2011 Plan, administered by the Compensation Committee of the Board of Directors, provides for granting of incentive awards in the form of stock, stock options, SARs, and restricted stock to employees, directors, and consultants of the Company. As of June 30, 2016, there were 1,611,907 shares available for grant under the 2011 Plan.

Stock Option Activity Summary

The Company’s stock option activity for the years ended June 30, 2016 and 2015 was as follows:



	Shares (In thousands)		Weighted Average Exercise Price
Outstanding at June 30, 2014	875		$	0.91
Granted	409		2.76
Exercised	(149	)	0.75
Canceled or expired	(7	)	14.01
Outstanding at June 30, 2015	1,128		$	1.53
Granted	170		1.50
Exercised	(16	)	1.09
Canceled or expired	(324	)	2.56
Outstanding at June 30, 2016	958		$	1.18

The aggregate intrinsic value of options exercisable at June 30, 2016 was $1.5 million as the fair value of the Company’s common stock is more than the exercise prices of these options. The aggregate intrinsic value of all options outstanding at June 30, 2016 was $1.6 million.



Range of exercise prices	Number Outstanding	Options Outstanding Weighted- Average Remaining Contractual Life (years)	Weighted- Average Exercise Price		Number Exercisable	Options Exercisable Weighted- Average Exercise Price
$0.32 – 0.71	432,750	4.14	$	0.60	432,750	$	0.60
$1.20 – 1.50	430,000	7.56	1.32		430,000	1.32
$3.20 – 3.20	95,000	8.78	3.20		45,003	3.20
$0.32 – 3.20	957,750	6.14	$	1.18	907,753	$	1.06

Compensation costs recognized related to vested stock option awards during the year ended June 30, 2016 and 2015 was $0.3 million and $0.1 million, respectively. At June 30, 2016, there was $0.1 million of total unrecognized compensation cost related to non-vested stock option awards, which is expected to be recognized over a weighted average period of 2.0 years.

Restricted Stock

The Company’s restricted stock activity for the years ended June 30, 2016 and 2015, was as follows:



	Shares (In thousands)		Weighted Average Grant-Date Fair Value
Outstanding at June 30, 2014	8		$	0.75
Granted	336		3.16
Vested	(8	)	0.75
Canceled or expired	—		—
Outstanding at June 30, 2015	336		$	3.16
Granted	35		2.02
Vested	(112	)	2.79
Canceled or expired	(104	)	3.20
Outstanding at June 30, 2016	155		$	3.14

At June 30, 2016 and 2015, there was $0.4 million and $1.0 million of unrecognized compensation costs related to restricted stock, respectively, which is expected to be recognized over a weighted average period of 1.8 years.

Fair Value of Stock-Based Compensation

Stock-based compensation costs are generally based on the fair value calculated from the Black-Scholes model on the date of grant of stock options. The fair values of stock options are amortized as compensation expense on a straight-line basis over the vesting period of the grants. The Company recognizes forfeitures as they occur. The assumptions used for the years ended June 30, 2016 and 2015 and the resulting estimates of weighted-average fair value per share of options granted are summarized in the following table:



	Year ended June 30, 2016			Year ended June 30, 2015
Expected Dividend Yield	—		%	—		%
Expected Volatility	109		%	109		%
Risk-Free Interest Rates	0.65		%	2.18		%
Expected Option Life (in years)	8.71			10.00
Weighted-average grant-date fair value of options awarded	$	1.18		$	0.70


•	The expected dividend yield is based on the Company’s current dividend yield and the best estimate of projected dividend yield for future periods within the expected life of the option, which is currently 0%.


•	The Company estimated volatility using the historical share price performance over the expected life. Management believes the historical estimated volatility is materially indicative of expectations about future volatility.


•	The estimate of the risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant.


•	Due to the Company having insufficient historical data for calculating expected life of options for the year ended June 30, 2015, the Company used the contractual term of the options. For the year ended June 30, 2016, the Company used the simplified method of calculating the expected life of options.

Securities Repurchase Program

On December 12, 2014, the Board of Directors amended the share repurchase program to allow for the repurchase of up to $5.0 million more treasury shares until December 31, 2015. On December 3, 2015, the Board authorized an extension of the share repurchase program through December 31, 2016. As of June 30, 2016, the Company had repurchased 188,635 shares of common stock at a cost of $492 thousand, which represents an average cost of $2.61 per share, and $4.5 million of securities are still available for repurchase under this program.

Common stock repurchases under the Company’s securities repurchase program may be made from time-to-time, in the open market, through block trades or otherwise in accordance with applicable regulations of the Securities and Exchange Commission (“SEC”). Depending on market conditions and other factors, these purchases may be commenced or suspended at any time or from time-to-time without prior notice. Additionally, the timing of such transactions will depend on other corporate strategies and will be at the discretion of the management of the Company.

Shares Repurchased from Related Parties

The Company repurchased 100,000 shares from a Director in October 2014 at an average price of $2.56, which was the average market price at the date of the transaction. In April 2015 the Company repurchased 563,580 shares issued to the Directors, Chief Executive Officer, and Chief Financial Officer related to their tax withholding obligations at an average price of $3.20, which was the closing market price at the date of the transaction. In April 2016 the Company repurchased 7,075 shares issued to the Chief Operating Officer related to his tax withholding obligation at a price of $2.02, which was the closing market price at the date of the transaction.