Stock-Based Compensation

The Company may issue restricted stock units and restricted stock awards collectively ("restricted stock units") and stock options which vest upon the satisfaction of a performance condition and/or a service condition. In addition, the Company issues shares to participating employees pursuant to an employee stock purchase plan.

The following table reflects stock-based compensation expense, excluding amounts related to discontinued operations, recorded during the three months ended December 31, 2014 and 2013 (in thousands):



	Three months ended December 31,
	2014		2013
Restricted stock units	$	3,372	$	2,610
Employee stock purchase plan	111		113
	$	3,483	$	2,723

The fair value per share of a restricted stock unit is equal to the quoted price of the Company’s common stock on the date of grant, net of estimated forfeitures. The expense related to these awards is being recorded ratably over the vesting period. In addition, for stock-based awards where vesting is dependent upon achieving certain operating performance goals, the Company estimates the likelihood of achieving the performance goals.

The Company grants restricted stock units that vest over a required service period and awards where vesting is dependent upon achieving certain operating performance goals. Restricted stock units granted with performance goals also have a required service period. The following table reflects restricted stock units granted, including awards related to the discontinued operation, during the three months ended December 31, 2014 and 2013:



	Total Units	Time-Based Units	Performance-Based Units
Three months ended December 31, 2014	1,375,500	551,250	824,250
Three months ended December 31, 2013	1,332,000	523,875	808,125

Time-based Grants

Units granted with a required service period typically have three year vesting schedules in which, subject to the award holder meeting service requirements, one-third vest at the first anniversary of the date of grant, one-third vest at the second anniversary of the date of grant and one-third vest at the third anniversary of the date of grant, except that time-based awards granted to the Company’s Board of Directors vest immediately.

Performance-based Grants

Performance-based units have performance criteria established by the Company’s Human Resources and Compensation Committee and the Board of Directors. The criteria for performance-based awards are weighted and have minimum performance thresholds, which if not met result in no vesting as to that metric’s weighted percentage.

Performance-based awards granted in fiscal year 2014 included provisions where participants could achieve up to 200% of the targeted number of performance-based awards if the Company’s performance exceeds the target. The measurement of achievement against performance-based units granted in fiscal year 2014 occurred at the end of fiscal year 2014 to determine the number of earned units eligible for subsequent vesting, in which one-half vest at the second anniversary of the date of grant and one-half vest at the third anniversary of the date of grant, subject to the award holder meeting service requirements.

The Company exceeded the fiscal year 2014 financial objectives associated with the performance-based awards which were granted in the first quarter of fiscal year 2014. Under the terms of the award, a total of 1,250,169 units could vest, subject to award holders satisfying the service requirement, which is an increase of 442,044 units over the target grant. Units granted to the employees of Granville-Phillips were forfeited upon completion of the sale.

Performance-based awards granted in fiscal year 2015 included provisions where participants could achieve up to 200% of the targeted number of performance-based awards if the Company’s performance exceeds the target objectives.

Sixty percent of the performance-based units granted in fiscal year 2015 have certain performance criteria to be measured at the end of fiscal year 2015 to determine the number of earned units, in which one-half vest at the second anniversary of the date of grant and one-half vest at the third anniversary of the date of grant, subject to the award holder meeting service requirements. Forty percent of the performance-based units granted in fiscal year 2015 have certain performance criteria to be measured over a three year period to be measured at the end of fiscal year 2017 with any earned units vesting at the third anniversary of the date of the grant, subject to award holders satisfying the service requirement.

Stock Option Activity

The following table summarizes stock option activity for the three months ended December 31, 2014:



	Number of Options	Weighted- Average Remaining Contractual Term	Weighted Average Exercise Price		Aggregate Intrinsic Value (In Thousands)
Outstanding at September 30, 2014	5,550		$	13.20
Forfeited/expired	—		—
Outstanding at December 31, 2014	5,550	0.1 years	$	13.20	$	—
Vested at December 31, 2014	5,550	0.1 years	$	13.20	$	—
Options exercisable at December 31, 2014	5,550	0.1 years	$	13.20	$	—

Based on the Company’s closing stock price of $12.75 as of December 31, 2014, there was no intrinsic value to the option holders.

No stock options were granted during the three months ended December 31, 2014 or 2013. There were no stock option exercises in the three months ended December 31, 2014 or 2013.

As of December 31, 2014, there was no future compensation cost related to stock options as all outstanding stock options have vested.

Restricted Stock Unit Activity

The following table summarizes restricted stock unit activity for the three months ended December 31, 2014:



	Restricted Stock Units		Weighted Average Grant-Date Fair Value
Outstanding at September 30, 2014	2,726,485		$	11.05
Restricted stock units granted	1,375,500		11.94
Restricted stock units vested	(577,021	)	11.92
Restricted stock units canceled	(206,083	)	9.80
Outstanding at December 31, 2014	3,318,881		$	11.90

The fair value of restricted stock units vested during the three months ended December 31, 2014 and 2013 was $6.9 million and $3.1 million, respectively.

As of December 31, 2014, the unrecognized compensation cost related to restricted stock units that is expected to vest is $27.0 million and will be recognized over an estimated weighted average service period of 2.1 years.

Employee Stock Purchase Plan

There were no shares purchased under the employee stock purchase plan during the three months ended December 31, 2014 and 2013.