Stockholders' Equity

12 Months Ended

Sep. 30, 2013

Stockholders' Equity

14. Stockholders’ Equity:

In September 1997, the board of directors and stockholders approved the 1997 Key Employee Stock Option Plan (as amended the “Employee Plan”) and, following amendments thereto, there has been reserved an aggregate of2,250,000 shares of common stock for issuance thereunder. In August 2013, the board of directors and stockholders approved an amendment to the Employee Stock Option Plan that extends the plan to November14, 2017. Under the Amended Employee Plan, at September 30, 2013, there are an aggregate of approximately 184,350 shares of common stock reserved for issuance thereunder. During the fiscal year ended September 30, 2013, the Company incurred payroll related expenditures of $0.9 million in order to compensate certain employees which were delayed in exercising their stock options.

Under the Employee Plan, the Company is authorized to grant nonqualified and incentive stock options to purchase common stock and restricted stock awards of common stock to key employees of the Company. Options have a term not to exceed ten years, with the exception of incentive stock options granted to employees owning ten percent or more of the outstanding shares of common stock, which have a term not to exceed five years. The exercise price of any option may not be less than the fair market value of the common stock on the date of grant. In the case of incentive stock options granted to an employee owning ten percent or more of the outstanding shares of common stock, the exercise price of such option may not be less than 110% of the fair market value of the common stock on the date of grant. Options vest over a four-year period commencing on the date of grant in 25% annual increments. Under the Employee Plan, the Company may issue shares of restricted stock to employees for no payment by the employee or for a payment below the fair market value on the date of grant. The restricted stock is subject to certain restrictions described in the Employee Plan, with no restrictions continuing for more than ten years from the date of the award.

The Company has never issued any incentive stock options under the Employee Plan and the Company has not issued any shares of restricted stock under the Employee Plan since August1, 2001. All issued shares of restricted stock are fully vested; thus there are no outstanding shares of restricted stock. The prior issuances by the Company of restricted stock were recorded at the fair value of the stock subject to those awards and were recorded as a component of stockholders’ equity, with a credit to additional paid-in capital. The Company recorded compensation expense based on the vesting criteria of the individual awards. The Company will account for any future issuances of restricted stock awards in accordance with applicable guidelines, which require that stock-based awards be measured and recognized at fair value.

A summary of the activity with respect to stock options is as follows:

	Shares			Weighted Average Exercise Price
Outstanding at September30, 2010		817,400		$	9.26
Granted		—			—
Exercised		(467,800	)		5.89
Forfeited		(4,000	)		8.78
Expired		—			—
Outstanding at September30, 2011		345,600			13.82
Granted		—			—
Exercised		(99,644	)		13.63
Forfeited		—			—
Expired		—			—
Outstanding at September30, 2012		245,956			13.90
Granted		—			—
Exercised		(139,906	)		10.36
Forfeited		—			—
Expired		—			—
Outstanding at September30, 2013		106,050		$	18.61

The number of stock options vested during fiscal years 2013, 2012 and 2011 were 106,500, 102,500 and 104,500, respectively. The fair values of stock options vested during fiscal years 2013, 2012 and 2011 were $0.8 million, $0.7 million and $0.3 million, respectively.

The following table summarizes information about stock options outstanding and exercisable at September30, 2013:

Range of Exercise Prices	Options Outstanding								Options Exercisable
	Shares		Weighted Average Remaining Term (inyears)		Weighted Average Exercise Price		Intrinsic Value			Shares		Weighted Average Remaining Term (inyears)		Weighted Average Exercise Price		Intrinsic Value
$6.76 to $9.99		38,700		5.2	$	8.78		2,922,044			38,700		5.2	$	8.78	$	2,922,044
$10.00 to $26.98		67,350		6.6		24.26		4,042,821			39,850		6.6		23.86		2,407,834
		106,050		6.1	$	18.61		6,964,865			78,550		5.9	$	16.43	$	5,329,878

The total intrinsic value of options exercised during fiscal years 2013, 2012 and 2011 were $10.4 million, $4.0 million and $20.8 million, respectively. As of September30, 2013 total compensation expense associated with unvested stock options amounted to $0.2 million and will be recognized in the Company’s fiscal year ending September 30, 2014.

In October 2012, the Company implemented a 2-for-1 split of its common stock effected in the legal form of a stock dividend. Other than the disclosure of the authorized number of shares of the Company’s common stock, all share and per-share disclosures have been adjusted for all periods presented in the consolidated financial statements to give effect to the stock split. Common stock and additional paid-in-capital at September30, 2012 and 2011 has been adjusted to reflect the effect of the stock split.