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Stock Options and Restricted Stock Awards
12 Months Ended
Sep. 30, 2013
Stock Options and Restricted Stock Awards [Abstract]  
Stock Options and Restricted Stock Awards
10. Stock Options and Restricted Stock Awards
 
The Company is currently making stock-based awards under its 2004 Stock Plan, which was adopted on September 21, 2004 and most recently amended and restated on February 8, 2012 (the “Plan”). The Plan allows for the granting of up to 7,800,000 shares of Common Stock in the form of stock options or stock awards to key employees and members of the Board of Directors. The key terms of the grants are determined by the Company's Board of Directors. As of September 30, 2013, there were 1,368,438 shares of common stock available for awards under the Plan.
 
The 1998 Stock Plan allowed for the granting of options to purchase up to 3,100,000 shares of Common Stock. These options were generally allowed to be exercised beginning 18 months after the date of grant and terminate ten years from the grant date. No further awards will be made under the 1998 Stock Plan.
 
Stock Options
 
As of September 30, 2013, there was $8.6 million of total unrecognized compensation cost related to unvested stock options. That cost is expected to be recognized over a weighted-average period of 2.0 years. Except under certain conditions, the options are subject to continued employment and vest in one-third increments over a three-year period following the grant dates.
 
The fair values of the options were estimated on the dates of grants using the Black-Scholes option-pricing model with the following weighted-average assumptions:
 
 
 
Year Ended September 30,
 
 
 
 
2013
 
 
2012
 
 
2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividend yield
 
 
-
 
 
 
-
 
 
 
-
 
 
Expected life in years
 
 
5.7
 
 
 
6.5
 
 
 
7.0
 
 
Risk-free interest rate
 
 
0.60
%
 
 
0.94
%
 
 
1.51
%
 
Expected volatility
 
 
43.80
%
 
 
47.00
%
 
 
48.00
%
 
Weighted average fair value of options granted
 
$
12.59
 
 
$
8.78
 
 
$
7.82
 
 
 
Expected lives of the options granted are based primarily on historical activity, while expected volatilities are based on historical volatilities of the Company’s stock and consideration of comparable public companies’ stock. Estimated forfeiture rates vary by grant and range up to 8.0% as of September 30, 2013.
 
In the event of a change in control of the Company, all outstanding options are immediately vested.
 
Information regarding the Company's stock options is summarized below (not in thousands):
 
 
 
 
 
 
 
 
 
Weighted-
 
 
 
 
 
 
 
 
 
Weighted-
 
Average
 
 
 
 
 
 
 
 
 
Average
 
Remaining
 
Aggregate
 
 
 
Number of
 
Exercise
 
Contractual
 
Intrinsic
 
 
 
Shares
 
Price
 
Life
 
Value
 
 
 
 
 
 
 
 
 
 
 
 
(in millions)
 
Outstanding at September 30, 2010
 
 
3,773,732
 
$
14.41
 
 
 
 
 
 
 
Granted
 
 
701,249
 
 
15.57
 
 
 
 
 
 
 
Exercised
 
 
(490,249)
 
 
10.81
 
 
 
 
 
 
 
Canceled
 
 
(89,149)
 
 
14.91
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at September 30, 2011
 
 
3,895,583
 
 
15.06
 
 
 
 
 
 
 
Granted
 
 
789,332
 
 
18.78
 
 
 
 
 
 
 
Exercised
 
 
(1,508,544)
 
 
14.24
 
 
 
 
 
 
 
Canceled
 
 
(109,291)
 
 
16.65
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at September 30, 2012
 
 
3,067,080
 
$
16.36
 
 
 
 
 
 
 
Granted
 
 
691,086
 
 
30.69
 
 
 
 
 
 
 
Exercised
 
 
(1,189,010)
 
 
16.13
 
 
 
 
 
 
 
Canceled
 
 
(64,550)
 
 
22.66
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at September 30, 2013
 
 
2,504,606
 
$
20.26
 
 
6.9
 
$
41.6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested or Expected to Vest at September 30, 2013
 
 
2,404,688
 
$
20.08
 
 
6.9
 
$
40.4
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at September 30, 2013
 
 
1,161,997
 
$
15.70
 
 
5.2
 
$
24.6
 
 
The aggregate intrinsic values above include only in-the-money options. The intrinsic values of stock options exercised during 2013 and 2012 were $22.0 million and $17.1 million, respectively.
 
Restricted Stock Awards
 
As of September 30, 2013, there was $4.2 million of total unrecognized compensation cost related to unvested restricted stock awards. That cost is expected to be recognized over a weighted-average period of 2.1 years.
 
The total fair values of the restricted stock awards were determined based upon the number of shares or units and the closing prices of the Company’s common stock on the dates of the grants. The restricted stock awards granted to management are subject to continued employment, except under certain conditions, and will vest if the Company attains a targeted rate of return on invested capital at the end of a three-year period. The actual number of shares or units that will vest can range from 0% to 125% of the management grants depending upon actual Company performance below or above the target level and the Company estimates that performance in determining the projected number of shares or units that will vest and the related compensation cost. The restricted stock awards granted to non-employee directors are also subject to continued service, vest at the end of one year (except under certain conditions) and the underlying common shares will not be distributed until six months after the director separates from the Company. In November 2013, the Company has also issued restricted stock awards that are subject to continued employment and will vest over three to five years.
 
Information regarding the Company's restricted shares and units is summarized below (not in thousands):
 
 
 
 
 
 
 
 
 
Weighted-
 
 
 
 
 
 
 
 
 
Weighted-
 
Average
 
 
 
 
 
 
 
 
 
Average
 
Remaining
 
Aggregate
 
 
 
Number of
 
Grant
 
Contractual
 
Intrinsic
 
 
 
Shares
 
Price
 
Life
 
Value
 
 
 
 
 
 
 
 
 
(in Years)
 
(in Millions)
 
Outstanding at September 30, 2011
 
 
135,009
 
$
16.70
 
 
 
 
 
 
 
Granted
 
 
148,100
 
 
20.26
 
 
 
 
 
 
 
Vested
 
 
(4,496)
 
 
20.02
 
 
 
 
 
 
 
Canceled
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at September 30, 2012
 
 
278,613
 
 
18.54
 
 
 
 
 
 
 
Granted
 
 
138,291
 
 
31.90
 
 
 
 
 
 
 
Vested
 
 
(42,465)
 
 
18.47
 
 
 
 
 
 
 
Canceled
 
 
(3,268)
 
 
21.85
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at September 30, 2013
 
 
371,171
 
$
23.52
 
 
2.5
 
$
13.3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested or Expected to Vest at September 30, 2013
 
 
371,171
 
$
23.52
 
 
2.5
 
$
13.3
 
  
In November 2013, the Company granted  420,191 additional options,75,673 performance based restricted stock units and 125,738  time based restricted stock units under the Plan to management.