Stock Options

3 Months Ended

Dec. 31, 2011

Stock Options

Stock Options

Note 9 – Stock Options

On November 5, 2007, the board of directors granted stock options to the Company’s President and Chief Executive Officer totaling 75,000 shares at an exercise price of $15.00 per share. 25,000 of the stock options vested immediately and 25,000 additional options vested on each of the first and second anniversary of the grant date. The options expire if not exercised by November 5, 2011. On September 23, 2008, the board of directors approved performance based stock options for the officers totaling 19,000 shares at an exercise price of $17.00 per share. 9,000 of these options vested on the first anniversary of the grant date and 5,000 vested on the second anniversary of the grant date. The remaining 5,000 of these options vest on the third anniversary of the grant date. No additional options were granted during fiscal years ended September 30, 2009 and September 30, 2010. On December 14, 2010, the board of directors granted 9,000 compensatory stock options to certain of the Company’s executive officers at an exercise price of $19.25 per share. These options are exercisable on or after December 15, 2011 and expire on the fourth anniversary of the grant date. No options were issued for the quarter ended December 31, 2011. The number of shares and exercise price of each of the option awards have been adjusted this quarter to reflect the stock dividend paid on April 20, 2011 (see Note 13 – Stock Dividend for additional information) and are shown in the next two tables.

Management has valued the options at their date of vesting utilizing the Black-Scholes Option Pricing Model. The following weighted average assumptions were utilized in the fair value calculations for options granted:

	2010	2011
	Options @	Options @
Adjusted exercise price	$11.33	$12.83
Expected dividend yield	3.16%	2.71%
Expected stock price volatility	36.23%	35.63%
Risk-free interest rate	4.00%	.83%
Expected life of options in years	1.75	4

The following summarizes the stock options outstanding as of December 31, 2011 for the fiscal year to date:

	Stock Options
					Weighted
	Number of		Weighted		Average
	Shares		Average		Remaining
	Remaining		Exercise		Contractual
	Options		Price		Term
Outstanding at October 1, 2011		80,000	$	10.95
Options granted		—
Options exercised during quarter ended December 31, 2011		35,000	$	10.00
Options canceled during quarter ended December 31, 2011		3,000
Outstanding at December 31, 2011		42,000	$	11.81		2.47 years
Exercisable at December 31, 2011		42,000	$	11.81		2.47 years