J. Stock-Based Compensation

We have the following stock-based compensation plans:

2014 Equity Incentive Plan

In February 2014, our stockholders approved and adopted at the Annual Meeting of Stockholders the 2014 Equity Incentive Plan (the 2014 Plan) which replaced our 2006 Equity Compensation Plan (2006 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. Restricted stock grants vest equally over their respective vesting period on each anniversary of the grant date and compensation expense is recognized over their respective vesting periods based on the price per share on the grant date.

In accordance with the 2014 Plan, the compensation committee has authorized grants of restricted stock units (RSUs) to certain officers and key employees of the company. 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, these grants vest over a three-year period from their date of issuance. In February 2016, the Board of Directors voted to modify future RSU awards. The modification provides that sixty percent of the grant is time-based and vests over a three-year period on each anniversary of the grant date, based on continued employment. The remaining forty percent of the grant will be earned based on the three-year earnings performance of the Company following the grant date. At September 30, 2016, there were 159,988 RSUs outstanding. The RSUs do not have voting rights but do receive dividend equivalents upon vesting; additionally, the shares of common stock underlying the RSUs are not considered issued and outstanding until vested and common stock is issued.

Total RSU activity (number of shares) for the past three years 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			66.15
Vested		(29,832	)		44.88
Forfeited		(2,078	)		56.34
Outstanding at September 30, 2014		106,845		$	51.30
Granted		89,500			41.75
Vested		(55,431	)		45.23
Forfeited		(7,408	)		43.82
Outstanding at September 30, 2015		133,506		$	47.83
Granted		168,800			31.64
Vested⁽¹⁾		(116,568	)		33.10
Forfeited		(25,750	)		50.28
Outstanding at September 30, 2016		159,988		$	43.12

(1)	Includes the accelerated vesting of 84,043 shares previously issued to our former Chief Executive Officer and other senior managers as part of their separation packages, see Note M.

We have reserved 750,000 shares of common stock for issuance under the 2014 Plan. In Fiscal 2016, 63,628 shares were issued under the 2014 Plan and the total number of shares of common stock left available was 664,911 shares.

2014 Non-Employee Director Equity Incentive Plan

In February 2014, our stockholders approved and adopted at the Annual Meeting of Stockholders the 2014 Non-Employee Director Equity Incentive Plan (the 2014 Director Plan). The total number of shares of common stock reserved under the plan is 150,000 shares. The plan is administered by the Compensation Committee. Eligibility to participate in the plan is limited to those individuals who are members of the Board of the Company and who are not employees of the Company or any affiliate of the Company.

Under the terms of the 2014 Director Plan, the maximum number of shares that may be granted during any calendar year to any individual is 12,000 shares. The total number of shares that may be issued for awards to any single participant during a calendar year for other stock-based awards (excluding stock options and SARs) is 4,000 shares. The Compensation Committee has determined that each non-employee director will receive 2,000 restricted shares of the Company’s common stock annually and that the annual grant of restricted shares will vest over a two-year period, of which 50% will vest on each anniversary of the grant date.

In February 2016, we issued 16,000 shares of restricted stock to our non-employee directors at a price of $25.63 per share and in April 2016, we also issued 1,000 shares of restricted stock to a non-employee director at a price of $29.38 per share under the 2014 Director Plan. In February 2015, we issued 16,000 restricted shares at a price of $33.37 per share and in September 2015, we issued 1,400 restricted shares at a price of $29.48 per share under the 2014 Director Plan. The total number of shares of common stock available for future awards under the 2014 Director plan was 101,600 shares as of September 30, 2016.

At September 30, 2016 and 2015, there were 26,800 shares and 26,200 shares of unvested restricted stock outstanding. Total compensation expense related to restricted stock grants under all plans was $0.7 million, $1.3 million and $1.3 million for the years ended September 30, 2016, 2015 and 2014, respectively. Total compensation expense related to RSU’s under all plans was $4.2 million, $1.9 million and $2.1 million for the years ended September 30, 2016, 2015 and 2014, respectively.

We record the amortization of non-vested restricted stock and restricted stock units as an increase to additional paid-in capital. As of September 30, 2016 and 2015, amounts not yet recognized related to non-vested stock totaled $2.1 million and $1.9 million, respectively. As of September 30, 2016, the total weighted average remaining contractual life of our restricted stock and RSU’s is 0.82 years and 1.83 years, respectively.