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 recorded during the three months ended December 31, 2015 and 2014 (in thousands):



	Three Months Ended December 31,
	2015		2014
Restricted stock units	$	4,577	$	3,372
Employee stock purchase plan	137		111
Total stock-based compensation	$	4,714	$	3,483

The fair value of restricted stock units is determined based on the number of shares granted and the closing price of the Company's common stock quoted on NASDAQ on the date of grant. The Company recognizes stock-based compensation expense on a straight-line basis, net of estimated forfeitures, over the requisite service period. Additionally, the Company assesses the likelihood of achieving the performance goals against previously established performance targets in accordance with the Company's long-term equity incentive plan for stock-based awards that vest after the satisfaction of these goals.

The Company grants restricted stock units that vest over a required service period and awards for which vesting is dependent upon achievement of 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 during the three months ended December 31, 2015 and 2014:



	Total Units	Time-Based Units	Stock Grants	Performance-Based Units
Three months ended December 31, 2015	1,208,954	424,250	954	783,750
Three months ended December 31, 2014	1,375,500	551,250	—	824,250

Time-Based Grants

Restricted stock units granted with a required service period typically have three year vesting schedules in which one-third of awards vest at the first anniversary of the grant date, one-third vest at the second anniversary of the grant date and one-third vest at the third anniversary of the grant date, subject to the award holders meeting service requirements.

Stock Grants

During the three months ended December 31, 2015, the Company issued 954 restricted stock units to certain members of its Board of Directors who had previously elected to defer receiving their annual awards of unrestricted shares of the Company stock until a future date. The additional units were issued in an amount equal to the value of cash dividends that would be paid on the number of deferred shares based on the closing price of the Company’s stock on each dividend record date. The additional units are vested upon issuance, but receipt of the Company shares is deferred until the holders attain a certain age or cease to provide services to the Company in their capacity as Board members. There were no compensation-related restricted stock units granted to the members of the Company's Board of Directors during the three months ended December 31, 2015 and 2014, respectively.

Performance-Based Grants

Performance-based restricted stock units are earned based on the achievement of performance criteria established by the Company’s Human Resources, Compensation Committee and the Board of Directors. The criteria for performance-based awards are weighted and have threshold, target and maximum performance goals.

Performance-based awards granted in fiscal year 2016 allow participants to earn 100% of the targeted number of restricted stock units if the Company’s performance meets its target for each applicable financial metric, and up to a maximum of 200% of the restricted stock units if the Company’s performance for such metrics meets the maximum threshold. Performance below the minimum threshold for each financial metric results in award forfeitures. Performance goals will be measured over a three year period at the end of fiscal year 2018 to determine the number of earned units eligible for vesting. Earned units vest on the date the Company’s Board of Directors determines the number of units earned, which will be approximately the third anniversary of the grant date. Vesting is also subject to a continuing service requirement.

Performance-based awards granted in fiscal year 2015 include provisions similar to fiscal 2016 awards that allow participants to earn threshold, target and maximum awards ranging from 0% of the award for performance below the minimum threshold, 100% of the award for performance at target, and up to a maximum of 200% of the award if the Company achieves the maximum performance goals.

Sixty percent of the performance-based units granted in fiscal year 2015 had certain performance goals that were measured at the end of fiscal year 2015 to determine the number of earned units eligible for subsequent vesting. The Company performed below the target levels relative to the performance criteria for these awards and as a result these awards were not eligible for subsequent vesting, which resulted in a forfeiture of 495,684 units.

Forty percent of the performance-based units granted in fiscal year 2015 have certain performance goals to be measured over a three year period at the end of fiscal year 2017 to determine the number of earned units eligible for subsequent vesting. Earned units vest on the third anniversary of the grant date, subject to award holders satisfying the service requirements. 351,066 units, or 40%, of performance-based awards granted in fiscal year 2015 are eligible for subsequent vesting. The total number of performance-based units to be earned by the participants will be based on the achievement against the Company's performance targets. The vesting of the units is subject to award holders satisfying the service requirements.

Restricted Stock Unit Activity

The following table summarizes restricted stock unit activity for the three months ended December 31, 2015:



	Shares		Weighted Average Grant-Date Fair Value
Outstanding at September 30, 2015	3,257,413		$	9.95
Granted	1,208,954		11.36
Vested	(1,180,367	)	9.51
Forfeited	(540,153	)	11.83
Outstanding at December 31, 2015	2,745,847		$	10.92

The weighted average grant date fair value of restricted stock granted during the three months ended December 31, 2015 and 2014 was $11.36 and $11.94, respectively. The fair value of restricted stock units vested during the three months ended December 31, 2015 and 2014 was $13.4 million and $6.9 million, respectively. The Company paid $4.2 million and $2.1 million for withholding taxes on vested restricted stock units during the three months ended December 31, 2015 and 2014, respectively.

As of December 31, 2015, the unrecognized compensation cost related to restricted stock units that are expected to vest is $21.4 million and will be recognized over an estimated weighted average service period of 2.0 years.

Employee Stock Purchase Plan

There were no shares purchased under the employee stock purchase plan during the three months ended December 31, 2015 and 2014, respectively.