Stock Based Compensation

3 Months Ended

Dec. 31, 2011

Stock Based Compensation [Abstract]

Stock Based Compensation

Note D — 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, 2011, there were 527,000 shares that remain available for issuance under the 2010 Stock Incentive Plan, and there were 433,000 options and 40,000 shares of restricted stock outstanding under this plan. As of December 31, 2011, the Company also had 1,103,500 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 approximately $316,000 ($202,000 net of tax) and $295,000 ($195,000 net of tax) of related stock-based compensation expense for the quarter ended December 31, 2011 and 2010, respectively. This stock-based compensation expense reduced both basic and diluted earnings per share by $0.02 for each of the quarters ended December 31, 2011 and 2010.

As of December 31, 2011, there is approximately $1,326,000 of unrecognized compensation cost that is expected to be recognized over a weighted average period of approximately thirteen months.

Stock Options and Restricted Stock

No stock options were granted in the first quarter of fiscal 2012 or 2011.

The following table represents stock-based awards activity for the three months ended December 31, 2011:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contract Life
Outstanding awards at beginning of period		1,588,750		$	9.39		5.83 Yrs
Granted - options		—			—
Granted – restricted shares		—			—
Exercised		(52,250	)	$	2.17
Outstanding awards at end of period		1,536,500		$	9.64		5.78 Yrs.
Outstanding awards exercisable at end of period		1,108,375		$	8.99		4.87 Yrs.

At December 31, 2011, the aggregate intrinsic value of options outstanding and options exercisable was $1,503,470. Total intrinsic value of options exercised was $219,510 for the three months ended December 31, 2011. Shares available for future stock-based awards to employees and directors under the 2010 Stock Incentive Plan were 527,000 at December 31, 2011.