STOCK-BASED COMPENSATION

12 Months Ended

Sep. 30, 2011

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 6 STOCK-BASED COMPENSATION

In March 2006, the Company adopted the 2005 Long-Term Incentive Plan (the "2005 Plan") providing for common-stock based awards to employees and to non-employee Directors. The 2005 Plan permits the granting of various types of awards including stock options and restricted stock awards. Restricted stock may be granted for no consideration other than prior and future services. The purchase price per share for stock options may not be less than market price of the underlying stock on the date of grant. Stock options expire ten years after the grant date. We have the right to satisfy option exercises from treasury shares and from authorized but unissued shares. As of December 7, 2010, there were 324,162 nonqualified stock options and 169,375 shares of restricted stock awards granted under the 2005 Plan. Effective March 2, 2011, no further common-stock based awards will be made under the 2005 Plan. However, awards outstanding in the 2005 Plan and one prior equity plan remain subject to the terms and conditions of those plans.

On December 1, 2009, we amended the forms of agreement under the plan for awards of nonqualified stock options, incentive stock options and restricted stock. We also amended existing stock option and restricted stock award agreements. The amendments provide for continued vesting (and accelerated vesting upon death) of restricted stock and stock options effective upon a participant becoming retirement eligible. A participant meets the definition of retirement eligible if the participant attains age 55 and has 15 or more years of continuous service as a full-time employee. The amendments apply retroactively. As a result of the continued vesting provisions, we incurred additional compensation cost of approximately $4.9 million in fiscal 2010.

On March 2, 2011, the 2010 Long-Term Incentive Plan (the "2010 Plan") was approved by our stockholders. The 2010 Plan, among other things, authorizes the Board of Directors to grant nonqualified stock options, restricted stock awards and stock appreciation rights to selected employees and to non-employee Directors. As of September 30, 2011, no awards have been made from the 2010 Plan.

A summary of compensation cost for stock-based payment arrangements recognized in general and administrative expense in fiscal 2011, 2010 and 2009 is as follows:

September 30,		2011		2010		2009
			(in thousands)
Compensation expense
	Stock options	$	7,224	$	11,475	$	6,899
	Restricted stock		4,877		4,380		1,449
		$	12,101	$	15,855	$	8,348

Benefits of tax deductions in excess of recognized compensation cost of $12.5 million, $3.3 million and $1.2 million are reported as a financing cash flow in the Consolidated Statements of Cash Flows for fiscal 2011, 2010 and 2009, respectively.

STOCK OPTIONS

Vesting requirements for stock options are determined by the Human Resources Committee of our Board of Directors. Options currently outstanding began vesting one year after the grant date with 25 percent of the options vesting for four consecutive years.

We use the Black-Scholes formula to estimate the fair value of stock options granted to employees. The fair value of the options is amortized to compensation expense on a straight-line basis over the requisite service periods of the stock awards, which are generally the vesting periods. The weighted-average fair value calculations for options granted within the fiscal period are based on the following weighted-average assumptions set forth in the table below. Options that were granted in prior periods are based on assumptions prevailing at the date of grant.

	2011			2010			2009
Risk-free interest rate		1.9	%		2.3	%		1.7	%
Expected stock volatility		51.6	%		49.9	%		43.3	%
Dividend yield		0.5	%		0.5	%		0.9	%
Expected term (in years)		5.5			5.8			5.8

Risk-Free Interest Rate.    The risk-free interest rate is based on U.S. Treasury securities for the expected term of the option.

Expected Volatility Rate.    Expected volatilities are based on the daily closing price of our stock based upon historical experience over a period which approximates the expected term of the option.

Expected Dividend Yield.    The dividend yield is based on our current dividend yield.

Expected Term.    The expected term of the options granted represents the period of time that they are expected to be outstanding. We estimate the expected term of options granted based on historical experience with grants and exercises.

Based on these calculations, the weighted-average fair value per option granted to acquire a share of common stock was $22.20, $17.64 and $8.16 per share for fiscal 2011, 2010 and 2009, respectively.

The following summary reflects the stock option activity for our common stock and related information for fiscal 2011, 2010 and 2009 (shares in thousands):

	2011					2010					2009
	Options			Weighted-Average Exercise Price		Options			Weighted-Average Exercise Price		Options			Weighted-Average Exercise Price
Outstanding at October 1,		5,572			$22.82		5,401			$20.55		4,819			$20.02
Granted		324			47.94		570			38.02		865			21.07
Exercised		(1,289	)		18.24		(397	)		13.63		(267	)		12.18
Forfeited/Expired		(18	)		34.06		(2	)		38.02		(16	)		26.91
Outstanding on September 30,		4,589			$25.84		5,572			$22.82		5,401			$20.55
Exercisable on September 30,		3,287			$22.35		3,888			$19.68		3,599			$17.42
Shares available to grant		6,000					761					1,656

The following table summarizes information about stock options at September 30, 2011 (shares in thousands):

	Outstanding Stock Options						Exercisable Stock Options
Range of Exercise Prices	Options		Weighted-Average Remaining Life		Weighted-Average Exercise Price		Options		Weighted-Average Exercise Price
$11.3318 to $16.01		1,489		2.1		$13.91		1,489		$13.91
$21.05 to $30.2375		1,641		5.9		$24.97		1,230		$26.27
$35.105 to $47.935		1,459		7.6		$38.99		568		$36.00
$11.3318 to $47.935		4,589		5.2		$25.84		3,287		$22.35

At September 30, 2011, the weighted-average remaining life of exercisable stock options was 4.1 years and the aggregate intrinsic value was $60.1 million with a weighted-average exercise price of $22.35 per share.

The number of options vested or expected to vest at September 30, 2011 was 4,467,093 with an aggregate intrinsic value of $69.0 million and a weighted-average exercise price of $25.67 per share.

As of September 30, 2011, the unrecognized compensation cost related to the stock options was $9.7 million. That cost is expected to be recognized over a weighted-average period of 2.5 years.

The total intrinsic value of options exercised during fiscal 2011, 2010 and 2009 was $50.5 million, $11.3 million and $4.9 million, respectively.

The grant date fair value of shares vested during fiscal 2011, 2010 and 2009 was $7.9 million, $7.0 million and $6.3 million, respectively.

RESTRICTED STOCK

Restricted stock awards consist of our common stock and are time vested over three to six years. We recognize compensation expense on a straight-line basis over the vesting period. The fair value of restricted stock awards is determined based on the average of the high and low price of our shares on the grant date. As of September 30, 2011, there was $7.9 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 2.2 years.

A summary of the status of our restricted stock awards as of September 30, 2011, and of changes in restricted stock outstanding during the fiscal years ended September 30, 2011, 2010 and 2009, is as follows (share amounts in thousands):

	2011					2010					2009
	Shares			Weighted-Average Grant Date Fair Value per Share		Shares			Weighted-Average Grant Date Fair Value per Share		Shares			Weighted-Average Grant Date Fair Value per Share
Outstanding at October 1,		289			$35.23		177			$30.06		243			$29.92
Granted		169			47.94		182			38.02		—			—
Vested		(134	)		33.92		(70	)		29.36		(66	)		29.52
Forfeited/Expired		(1	)		47.94		—			—		—			—
Outstanding on September 30,		323			$42.38		289			$35.23		177			$30.06