Stock Based Compensation

3 Months Ended

Dec. 31, 2012

Stock Based Compensation

Stock Based Compensation

Note C — Stock Based Compensation

On January 28, 2010, the Company’s shareholders approved the Rochester Medical Corporation 2010 Stock Incentive Plan. As of that same date, no new awards were allowed to be granted under the Company’s 1991 Stock Option Plan or the 2001 Stock Incentive Plan. The 2010 Stock Incentive Plan authorizes the issuance of up to 1,000,000 shares of common stock pursuant to grants of incentive stock options, non-incentive stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, performance awards, stock awards, and other stock-based awards. Per the terms of the 2010 Stock Incentive Plan, awards may be granted with a term no longer than ten years. The vesting schedule and other terms of the awards granted under the 2010 Stock Incentive Plan will be determined by the Compensation Committee of the Board of Directors at the time of the grant. As of December 31, 2012, there were 360,875 shares that remain available for issuance under the 2010 Stock Incentive Plan, and there were 463,633 options and 91,884 shares of restricted stock outstanding under this plan. As of December 31, 2012, the Company also had 992,250 options outstanding under the 2001 Stock Incentive Plan.

The Company measures stock-based compensation cost at the grant date based on the fair value of the award and recognizes the compensation expense over the requisite service period, which is generally the vesting period. The Company recorded $202,000 and $316,000 of related stock-based compensation expense for the quarters ended December 31, 2012 and 2011, respectively.

As of December 31, 2012, there is approximately $845,000 of unrecognized compensation cost that is expected to be recognized over a weighted average period of approximately twenty-three months.

No stock options were granted in the first quarter of fiscal 2013 or 2012.

The Company issues new shares as settlement of options exercised.  For the quarters ended December 31,2012 and 2011, 90,000 and 52,250 stock options were exercised respectively.  Cash received from option exercises for the quarters ended December 31, 2012 and 2011 was $414,000 and $113,000 respectively.