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SHARE-BASED COMPENSATION PLANS
 12 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [Abstract]  
SHARE-BASED COMPENSATION PLANS SHARE-BASED COMPENSATION PLANS We grant share-based compensation to eligible participants under our 2012 Omnibus Incentive Plan (the "OIP"), which was amended as of March 2017, and prior to that under our 2000 Equity Incentive Plan (the “EIP”).  The OIP allows for the granting of six types of equity incentive awards: stock options, restricted stock, restricted stock units, stock appreciation rights (“SARs”), performance-based awards, and substitute awards in connection with an acquisition (in the case of the Acquisition, “Replacement Awards”). The OIP authorizes up to 4,978 shares of stock to be granted thereunder, including up to 2,074 shares of stock in the aggregate of awards other than options or SARs and up to 2,539 incentive stock options.  In addition, shares that become available from awards under the EIP and the OIP because of events such as forfeitures, cancellations or expirations will also be available for issuance under the OIP. Shares issued under our share-based compensation plans are issued from new shares rather than from treasury shares.
In fiscal 2019, in connection with the Acquisition, we awarded a total of 43,443 restricted stock unit awards to certain KMG employees in substitution for certain unvested restricted stock unit awards that KMG had awarded subsequent to the entry into the definitive agreement for the Acquisition, but prior to the Acquisition Date. The Replacement Awards vest in three equal installments on the first three anniversaries of the original award date. If the recipient was terminated without cause or resigned with good reason during the 18 months following the Acquisition Date, the Replacement Awards will have vested as of such termination date in a number of shares equal to 150% of the Replacement Award.
STOCK OPTIONS
Non-qualified stock options issued under the OIP are generally time-based and provide for a ten-year term, with options generally vesting equally over a four-year period. Non-qualified stock options granted to non-employee directors on an annual basis vest 100% on the first anniversary of the award date. Under the OIP employees may also be granted incentive stock options to purchase common stock at not less than the fair value on the date of the grant, but to date we have not granted incentive stock options.
The fair value of our share-based awards, as shown below, was estimated using the Black-Scholes model with the following weighted-average assumptions:
Year Ended September 30,
202020192018
Weighted-average grant date fair value$39.68 $27.34 $26.59 
Expected term (in years)6.966.866.68
Expected volatility32 %26 %26 %
Risk-free rate of return1.6 %2.8 %2.4 %
Dividend yield1.3 %1.6 %1.0 %

A summary of stock option activity is as follows:
Stock
Options		Weighted
Average
Exercise
Price		Weighted
Average
Remaining
Contractual
Term
(in years)		Aggregate
Intrinsic
Value
(in thousands)
Outstanding at September 30, 2019879 $63.44 
Granted121 129.60 
Exercised(182)51.50 
Forfeited or canceled(11)75.59 
Outstanding at September 30, 2020807 $75.87 6.2$54,078 
Exercisable at September 30, 2020499 $58.27 5.1$42,184 
Expected to vest at September 30, 2020308 $104.39 8.1$11,836 

Year Ended September 30,
202020192018
Intrinsic value of options exercised$19,077 $20,711 $30,345 
Cash received from exercise of options9,350 13,193 19,247 
Tax benefit from exercise of options3,629 4,449 7,503 
Fair value of options vested3,765 4,506 5,008 

As of September 30, 2020, there was $5,267 of total unrecognized share-based compensation expense related to unvested stock options. That cost is expected to be recognized over a weighted-average period of 2.3 years.
EMPLOYEE STOCK PURCHASE PLAN
The ESPP allows all full-time, and certain part-time, employees of our Company and its designated subsidiaries to purchase shares of our common stock through payroll deductions, subject to a maximum number of shares that a participant may purchase and a maximum dollar expenditure in any six-month offering period, and certain other criteria.  The provisions of the ESPP allow shares to be purchased at a price no less than the lower of 85% of the closing price at the beginning or end of each semi-annual stock purchase period. As of September 30, 2020, a total of 291 shares are available for purchase under the ESPP.
The Black-Scholes model is primarily used in estimating the fair value of short-lived exchange traded options that have no vesting restrictions and are fully transferable.  Because employee stock options and ESPP purchases have certain characteristics that are significantly different from traded options, and because changes in the subjective assumptions can materially affect the estimated value, our use of the Black-Scholes model for estimating the fair value of stock options and ESPP purchases may not provide an accurate measure.  Although the value of our stock options and ESPP purchases are determined in accordance with applicable accounting standards using an option-pricing model, those values may not be indicative of the fair values observed in a willing buyer/willing seller market transaction.

Year Ended September 30,
202020192018
Weighted-average grant date fair value$39.17 $25.16 $20.94 
Shares issued46 49 50 
Expected term (in years)0.50.50.5
Expected volatility52 %34 %26 %
Risk-free rate of return1.7 %2.3 %1.5 %
Dividend yield1.3 %1.6 %1.1 %

RESTRICTED STOCK, RESTRICTED STOCK UNITS, AND PERFORMANCE SHARE UNITS
Under the OIP, employees and non-employees may be awarded shares of restricted stock or RSUs, which generally vest over a four-year period. Restricted shares under the OIP may be purchased and placed "on deposit" by executive officers pursuant to the 2001 Deposit Share Program. Shares purchased under this Deposit Share Program receive a 50% match in restricted shares that vest at the end of a three-year period, and are subject to forfeiture upon early withdrawal of the deposit shares. The fair value of our restricted stock and restricted stock unit awards represents the closing price of our common stock on the date of award. Share-based compensation expense related to restricted stock and RSU awards is recorded net of expected forfeitures.
In December 2017, we began awarding PSU awards to certain employees on an annual basis. These PSUs fully vest upon certification of performance achieved with respect to the PSU following the third anniversary of the performance period tied to the PSU, according to the terms and conditions of the relevant PSU award agreement. Stock-based compensation for the awards is recognized over the requisite service period (three years) beginning on the date of award through the end of the performance period based on the number of PSUs expected to vest under the awards at the end of the performance period. The expected amount of vesting is determined using certain performance measures and is re-evaluated at the end of each fiscal year through the end of the performance period. In addition, the PSUs awarded may be subject to downward or upward adjustment depending on the total shareholder return achieved by the Company during the particular performance period related to the PSUs, relative to the total shareholder return of the S&P SmallCap 600 Index or the S&P MidCap 400 Index, as specified in the respective PSU award agreement. We estimate fair value of the PSUs at award date by using a Monte Carlo simulation model. This model simulates the stock price movements of the Company and relevant Index constituents using certain assumptions, including the stock price of our company and relevant Index constituents, the risk-free interest rate and stock price volatility.
A summary of the activity of the restricted stock awards, RSU awards, and PSU awards is presented below:
Restricted Stock
Awards and Units		Weighted Average
Grant Date Fair
Value
Nonvested at September 30, 2019275 $87.36 
Granted 1
88 125.14 
Vested(100)74.65 
Forfeited(6)83.65 
Nonvested at September 30, 2020257 $104.83 
1 Includes PSUs awarded

Year Ended September 30,
202020192018
Weighted average grant date fair value$104.83 $87.36 $70.42 

The total fair value of restricted stock awards and RSUs vested during fiscal years 2020, 2019 and 2018 was $7,481, $11,060 and $6,669, respectively.  As of September 30, 2020, there was $14,256 of total unrecognized share-based compensation expense related to unvested restricted stock awards and RSUs, including PSUs, under the OIP.  That cost is expected to be recognized over a weighted-average period of 2.09 years.
SHARE-BASED COMPENSATION EXPENSE
Total share-based compensation expense and the classification of that expense in the Consolidated Statements of Income for the years ended September 30, 2020, 2019 and 2018, is as follows:

Year Ended September 30,
202020192018
Cost of sales$2,863 $2,727 $2,450 
Research, development and technical2,090 2,150 1,940 
Selling, general and administrative11,443 13,350 14,128 
Tax benefit(3,162)(3,767)(4,306)
Total share-based compensation expense, net of tax$13,234 $14,460 $14,212 

Total gross share-based compensation expense is attributable to the following awards:
Year Ended September 30,
202020192018
Stock Options$4,406 $4,267 $6,392 
Restricted stock, restricted stock units, and replacement awards8,259 11,400 9,186 
Performance share units1,957 1,279 2,056 
ESPP1,774 1,281 885