Stockholders' Equity

12 Months Ended

Sep. 30, 2013

Stockholders' Equity [Abstract]

Stockholders' Equity

12. 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 1.0 million shares of common stock authorized for issuance under the 2006 Equity Incentive Plan.

Treasury Stock

During the year ended September 30, 2013, we repurchased 95,469 common shares from our employees to satisfy minimum tax withholding requirements upon the vesting of restricted stock issued under the 2006 Equity Incentive Plan.We issued 266,814 shares out of treasury stock under our share-based compensation programs; 12,500 for restricted shares granted, and 254,314 for phantom stock units.

Restricted Stock

Restricted Stock Awards:
Fiscal Year	Shares Granted	Weighted Average Fair Value at Date of Grant	Shares Vested	Shares Forfeited	Shares Outstanding	Expense recognized through September 30, 2013
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	147,456	78,030	-	495
2011	320,000	3.39	171,715	73,205	75,080	669
2012	107,500	2.07	35,834	-	71,666	124
2013	12,500	5.00	-	-	12,500	19

During the years ended September 30, 2013, 2012 and 2011, we recognized $374, $536, and $787, respectively, in compensation expense related to these restricted stock awards. At September 30, 2013, the unamortized compensation cost related to outstanding unvested restricted stock was $216. We expect to recognize $186 and $30 of this unamortized compensation expense during the years ended September 30, 2014 and 2015, respectively. A summary of restricted stock awards for the years ended September 30, 2013, 2012 and 2011 is provided in the table below:

		Years Ended September 30,
			2013	2012	2011
Unvested at beginning of year			257,826	376,200	352,086
	Granted		12,500	107,500	320,000
	Vested		(111,080)	(192,973)	(165,628)
	Forfeited		-	(32,901)	(130,258)
Unvested at end of year			159,246	257,826	376,200

The fair value of shares vesting during the years ended September 30, 2013, 2012 and 2011 was $528, $661 and $520, respectively. Fair value was calculated as the number of shares vested times the market price of shares on the date of vesting. The weighted average grant date fair value of unvested restricted stock at September 30, 2013 was $2.90.

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

Phantom stock units (“PSUs”) are primarily granted to the members of the Board of Directors as part of their overall compensation. These PSUs are paid via unrestricted stock grants to each director upon their departure from the Board of Directors. We record compensation expense for the full value of the grant on the date of grant. For the years ended September 30, 2013, 2012 and 2011, we recognized $295, $159, and $100 in compensation expense related to these grants.

From time to time, PSUs are granted to employees. These PSUs are paid via unrestricted stock grants to each employee upon the satisfaction of the grant terms. We record compensation expense for the PSUs granted to employees over the grant vesting period. For the years ended September 30, 2013, 2012 and 2011, we recognized $651, $129, and $0 in compensation expense related to these grants.

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, 2013, 2012 and 2011 are disclosed in the following table:

		Years Ended September 30,
		2013		2012		2011
Weighted average value per option granted during the period		$	3.43		N/A	$	2.05
Dividends (1)		$	-		N/A	$	-
Stock price volatility (2)			66.6%		N/A		69.9%
Risk-free rate of return			0.9%		N/A		1.9%
Option term			10.0 years		N/A		10.0 years
Expected life			6.0 years		N/A		6.0 years
Forfeiture rate (3)			10.0%		N/A		0.0%
	(1) We do not currently pay dividends on our common stock.
	(2) Based upon the Company's historical volatility.
	(3) The forfeiture rate for the 2011 options was assumed on the date of grant to be zero based on the limited number of employees who have been awarded stock options. The forfeiture rate for the 2013 options was for a larger number of employees and based on historical data.

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. Stock-based compensation expense recognized in the Consolidated Statements of Comprehensive Income is based on awards ultimately expected to vest. 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, 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	$	18.66
Options granted	-		-
Exercised	-		-
Forfeited and Cancelled	-		-
Outstanding, September 30, 2012	20,000	$	3.24
Options granted	150,000		5.76
Exercised	-		-
Forfeited and Cancelled	-		-
Outstanding, September 30, 2013	170,000	$	5.46

The following table summarizes options outstanding and exercisable at September 30, 2013:

Exercise Prices	Outstanding as of September 30, 2013	Remaining Contractual Life in Years		Weighted-Average Exercise Price	Exercisable as of September 30, 2013		Weighted-Average Exercise Price
$3.24	20,000	7.80	$	3.24	13,333	$	3.24
$5.76	150,000	9.58	$	5.76	-	$	-
	170,000		$	5.46	13,333	$	3.24

Our 2011 options vest over a three year period at a rate of one-third per year upon the annual anniversary date of the grant. Our 2013 options cliff vest at the end of a two year period ending at the anniversary date of the grant. All options 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 share. Unexercised stock options expire July 2021 and May 2023.

During the years ended September 30, 2013, 2012 and 2011, we recognized $110, $14 and $19, respectively, in compensation expense related to our stock option awards. At September 30, 2013, the unamortized compensation cost related to outstanding unvested stock options was $378. We expect to recognize$243 and $135of this unamortized compensation expense during the year ended September 30, 2014 and 2015.

The intrinsic value of stock options outstanding and exercisable was $36 and zero at September 30, 2013 and 2012, respectively. The intrinsic value is calculated as the difference between the fair value as of the end of the period and the exercise price of the stock options.