Stockholders' Equity

6 Months Ended

Mar. 31, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

The 2006 Equity Incentive Plan became effective on May 12, 2006 (as amended, the “2006 Equity Incentive Plan”). The 2006 Equity Incentive Plan provides for grants of stock options as well as grants of stock, including restricted stock. We have approximately 1.0million shares of common stock authorized for issuance under the 2006 Equity Incentive Plan.

On May 12, 2008, 10,555 shares of outstanding common stock that were reserved for issuance upon exchange of previously issued shares pursuant to our Plan were cancelled.

Treasury Stock

During the six months ended March 31, 2012, we repurchased 34,578 common shares from our employees to satisfy minimum tax withholding requirements upon the vesting of restricted stock issued under the 2006 Equity Incentive Plan, and 27,242 unvested shares were forfeited by former employees and returned to treasury stock. We issued 100,000 shares out of treasury stock under our share-based compensation programs.

During the six months ended March 31, 2011,we repurchased 18,846 common shares from our employees to satisfy minimum tax withholding requirements upon the vesting of restricted stock issued under the 2006 Equity Incentive Plan and 63,077 unvested shares were forfeited by former employees and returned to treasury stock. We issued 204,000 shares out of treasury stock under our share-based compensation programs.

Restricted Stock

Restricted Stock Awards:
Fiscal Year	Shares Granted	Weighted Average Fair Value at Date of Grant	Vested	Forfeitures	Shares Outstanding	Expense recognized through March 31, 2012
2006	384,850	$ 24.78	258,347	126,503	-	$ 6,402
2006	25,000	$ 17.36	25,000	-	-	$ 434
2007	20,000	$ 25.08	20,000	-	-	$ 502
2007	4,000	$ 26.48	4,000	-	-	$ 106
2008	101,650	$ 19.17	85,750	15,900	-	$ 1,779
2009	185,100	$ 8.71	146,400	38,700	-	$ 1,344
2010	225,486	$ 3.64	59,347	77,439	88,700	$ 450
2011	320,000	$ 3.39	87,579	68,761	163,660	$ 319
2012	100,000	$ 2.00	-	-	100,000	$ 33

During the six months ended March 31, 2012 and 2011, we recognized $276and $436 respectively, in compensation expense related to these restricted stock awards. At March 31, 2012, the unamortized compensation cost related to outstanding unvested restricted stock was $749. We expect to recognize $261of this unamortized compensation expense during the remaining six months of our 2012fiscal year and $488 thereafter. A summary of restricted stock awards for the years ended September 30, 2012, 2011 and 2010 is provided in the table below:

		Years Ended September 30,
			2012	2011	2010
Unvested at beginning of year			376,200	352,086	230,716
	Granted		100,000	320,000	225,486
	Vested		(96,598)	(165,628)	(66,116)
	Forfeited		(27,242)	(130,258)	(38,000)
Unvested at end of year			352,360	376,200	352,086

All the restricted shares granted under the 2006 Equity Incentive Plan (vested or unvested) participate in dividends issued to common shareholders, if any.

Phantom Stock Units

We granted 24,632 shares of performance-based phantom stock units (“PSUs”) to the members of the Board of Directors in 2011. These PSU's will be paid via unrestricted stock grants to each director upon his departure from the Board of Directors.

Stock Options

We utilized a binomial option pricing model to measure the fair value of stock options granted.Our determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, the risk-free rate of return, and actual and projected employee stock option exercise behaviors. The expected life of stock options is not considered under the binomial option pricing model that we utilize. The assumptions used in the fair value method calculation for the years ended September 30, 2012, 2011 and 2010 are disclosed in the following table:

		Years Ended March 31,
		2012		2011		2010
Weighted average value per option granted during the period		$	N/A		2.05	$	N/A
Dividends (1)		$	N/A		-	$	N/A
Stock price volatility (2)			N/A		69.9%		N/A
Risk-free rate of return			N/A		1.9%		N/A
Option term			N/A		10.0 years		N/A
Expected life			N/A		6.0 years		N/A
Forfeiture rate (3)			N/A		0.0%		N/A
	(1) We do not currently pay dividends on our common stock.
	(2) Based upon the Company's historical volatility.
	(3) The forfeiture rate for these options was assumed on the date of grant to be zero based on the limited number of employees who have been awarded stock options.

Stock-based compensation expense recognized during the period is based on the value of the portion of the share-based payment awards that is ultimately expected to vest during the period. As stock-based compensation expense recognized in the Consolidated Statements of Operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. We estimate our forfeitures at the time of grant and revise, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The following table summarizes activity under our stock option plans.

		Weighted Average
	Shares	Exercise Price
Outstanding, September 30, 2008	161,000	$	26.66
Options granted	7,500		17.09
Exercised	-		-
Forfeited and Cancelled	(10,000)		41.61
Outstanding, September 30, 2009	158,500	$	18.66
Options granted	-		-
Exercised	-		-
Forfeited and Cancelled	-		-
Outstanding, September 30, 2010	158,500	$	18.66
Options granted	20,000		3.24
Exercised	-		-
Forfeited and Cancelled	(158,500)		18.66
Outstanding, September 30, 2011	20,000	$	3.24
Options granted	-		-
Exercised	-		-
Forfeited and Cancelled	-		-
Outstanding, March 31, 2012	20,000	$	3.24

The following table summarizes options outstanding and exercisable at March 31, 2012:

Range of Exercise Prices	Outstanding as of March 31, 2012	Remaining Contractual Life in Years		Weighted-Average Exercise Price	Exercisable as of March 31, 2012		Weighted-Average Exercise Price
$3.24	20,000	9.30	$	3.24	-	$	3.24
	20,000	9.30	$	3.24	-	$	3.24

All of our outstanding options vest over a three-year period at a rate of one-third per year upon the annual anniversary date of the grant and expire ten years from the grant date if they are not exercised. Upon exercise of stock options, it is our policy to first issue shares from treasury stock, then to issue new shares. Unexercised stock options expire byJuly 2021.