Stock-Based Compensation

9 Months Ended

Jun. 30, 2014

Stock-Based Compensation

G.  STOCK-BASED COMPENSATION

Refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2013 for a full description of our existing stock-based compensation plans.

On February 26, 2014, our stockholders approved and adopted at the Annual Meeting of Stockholders the 2014 Equity Incentive Plan (the 2014 Plan). Persons eligible to receive awards under the 2014 Plan include our officers and employees. The 2014 Plan authorizes stock options, stock appreciation rights, restricted stock, restricted stock units and performance-based awards, as well as certain other awards.  We have reserved 750,000 shares of common stock for issuance under the 2014 Plan.  No further awards will be made under the 1992 Stock Option Plan or the 2006 Equity Compensation Plan.  

We issue restricted stock units (RSUs) to certain officers and key employees of the Company. The RSUs vest over a three-year period from their date of issuance. The fair value of the RSUs is based on the closing price of our common stock as reported on the NASDAQ Global Market (NASDAQ) on the grant dates. Typically, sixty-percent of the actual amount of the RSUs are earned based on the cumulative earnings as reported relative to the three-year performance cycle which begins October 1 of the year granted, and ranges from 0% to 150% of the target RSUs granted and the remaining of the RSUs are time-based and vest over a three-year period. At June 30, 2014, there were 132,282 RSUs outstanding. The RSUs do not have voting rights and the shares of common stock underlying the RSUs are not issued until they vest.

RSU activity (number of shares) is summarized below:

	Number of		Weighted
	Restricted		Average
	Stock		Fair Value
	Units		Per Share
Outstanding at September 30, 2013		81,555	$	38.66
Granted		57,200		60.47
Vested		(5,973)		61.79
Forfeited		(500)		60.32
Outstanding at June 30, 2014		132,282	$	46.97

During the nine months ended June 30, 2014 and 2013, we recorded compensation expense of $2.0 million and $2.2 million, respectively, related to the RSUs.

On February 26, 2014, our stockholders approved and adopted at the Annual Meeting of Stockholders the 2014 Non-Employee Director Equity Incentive Plan (the 2014 Director Plan). Persons eligible to receive awards under the 2014 Director Plan are non-employee directors of the Board.  The 2014 Director Plan authorizes stock options, stock appreciation rights, restricted stock, restricted stock units, as well as certain other awards. We have reserved 150,000 shares of common stock for issuance under the 2014 Director Plan.  No further awards will be made under the Non-Employee Director Restricted Stock Plan or the Non-Employee Director Stock Option Plan. In February 2014, 16,000 shares of restricted stock were issued to such directors at a price of $66.15 per share under the 2014 Director Plan.  The annual restricted stock grants vest 50% per year over a two-year period on each anniversary of the grant date.

During the nine months ended June 30, 2014 and 2013, we recorded compensation expense of $0.9 million and $1.0 million, respectively, related to restricted stock grants.