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Stockholders' Equity
 12 Months Ended
Sep. 30, 2012
Stockholders' Equity [Abstract]  
Stockholders' Equity

12. STOCKHOLDERS' EQUITY

 

The 2006 Equity Incentive Plan became effective on May 12, 2006 (as amended, the “2006 Equity Incentive Plan”). The 2006 Equity Incentive Plan provides for grants of stock options as well as grants of stock, including restricted stock. We have approximately 1.0 million shares of common stock authorized for issuance under the 2006 Equity Incentive Plan.

 

Treasury Stock

 

During the year ended September 30, 2012, we repurchased 54,296 common shares from our employees to satisfy minimum tax withholding requirements upon the vesting of restricted stock issued under the 2006 Equity Incentive Plan, and 32,277 unvested shares were forfeited by former employees and returned to treasury stock. We issued 107,500 shares out of treasury stock under our share-based compensation programs.

Restricted Stock

Restricted Stock Awards:        
Fiscal Year Shares Granted Weighted Average Fair Value at Date of Grant Vested Forfeitures Shares Outstanding Expense recognized through September 30, 2012
             
2006  384,850 $ 24.78  258,347  126,503  - $ 6,402
2006  25,000 $ 17.36  25,000  -  - $ 434
2007  20,000 $ 25.08  20,000  -  - $ 502
2007  4,000 $ 26.48  4,000  -  - $ 106
2008  101,650 $ 19.17  85,750  15,900  - $ 1,779
2009  185,100 $ 8.71  146,400  38,700  - $ 1,344
2010  225,486 $ 3.64  59,347  77,439  88,700 $ 495
2011  320,000 $ 3.39  87,579  68,761  163,660 $ 388
2012  107,500 $ 2.07  -  -  107,500 $ 50
             

During the years ended September 30, 2012, 2011 and 2010, we recognized $536, $787, and $1,272, respectively, in compensation expense related to these restricted stock awards. At September 30, 2012, the unamortized compensation cost related to outstanding unvested restricted stock was $503. We expect to recognize $348 and $155 of this unamortized compensation expense during the years ended September 30, 2013 and 2014, respectively. A summary of restricted stock awards for the years ended September 30, 2012, 2011 and 2010 is provided in the table below:

  Years Ended September 30,
   2012  2011  2010
Unvested at beginning of year  376,200  352,086  230,716
 Granted  107,500  320,000  225,486
 Vested  (192,973)  (165,628)  (66,116)
 Forfeited  (32,901)  (130,258)  (38,000)
Unvested at end of year  257,826  376,200  352,086

The fair value of shares vesting during the years ended September 30, 2012, 2011 and 2010 was $661, $520 and $423, respectively. Fair value was calculated as the number of shares vested times the market price of shares on the date of vesting. The weighted average grant date fair value of unvested restricted stock at September 30, 2012 was $2.59.

 

All the restricted shares granted under the 2006 Equity Incentive Plan (vested or unvested) participate in dividends issued to common shareholders, if any.

Phantom Stock Units

 

Phantom stock units (“PSUs”) are primarily granted to the members of the Board of Directors as part of their overall compensation. These PSUs are paid via unrestricted stock grants to each director upon their departure from the Board of Directors. We record compensation expense for the full value of the grant on the date of grant. For the years ended September 30, 2012, 2011 and 2010, we recognized $159, $100, and $125 in compensation expense related to these grants.

 

From time to time, PSUs are granted to employees. These PSUs are paid via unrestricted stock grants to each employee upon the satisfaction of the grant terms. We record compensation expense for the PSUs granted to employees over the grant vesting period. For the years ended September 30, 2012, 2011 and 2010, we recognized $129, $0, and $0 in compensation expense related to these grants.

 

Stock Options

 

We utilized a binomial option pricing model to measure the fair value of stock options granted. Our determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, the risk-free rate of return, and actual and projected employee stock option exercise behaviors. The expected life of stock options is not considered under the binomial option pricing model that we utilize. The assumptions used in the fair value method calculation for the years ended September 30, 2012, 2011 and 2010 are disclosed in the following table:

   Years Ended September 30,
   2012 2011 2010
Weighted average value per option granted during the period $N/A $ 2.05 $N/A
Dividends (1) $N/A $ - $N/A
Stock price volatility (2)  N/A  69.9%  N/A
Risk-free rate of return  N/A  1.9%  N/A
Option term  N/A  10.0 years  N/A
Expected life  N/A  6.0 years  N/A
Forfeiture rate (3)  N/A  0.0%  N/A
           
           
 (1) We do not currently pay dividends on our common stock.
 (2) Based upon the Company's historical volatility.
 (3) The forfeiture rate for these options was assumed on the date of grant to be zero based on the limited number of employees who have been awarded stock options.

Stock-based compensation expense recognized during the period is based on the value of the portion of the share-based payment awards that is ultimately expected to vest during the period. As stock-based compensation expense recognized in the Consolidated Statements of Operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. We estimate our forfeitures at the time of grant and revise, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

 

The following table summarizes activity under our stock option plans.

    Weighted Average
  Shares Exercise Price
Outstanding, September 30, 2009  158,500 $ 18.66
Options granted  -   -
Exercised  -   -
Forfeited and Cancelled  -   -
Outstanding, September 30, 2010  158,500 $ 18.66
Options granted  20,000   3.24
Exercised  -   -
Forfeited and Cancelled  (158,500)   18.66
Outstanding, September 30, 2011  20,000 $ 3.24
Options granted  -   -
Exercised  -   -
Forfeited and Cancelled  -   -
Outstanding, September 30, 2012  20,000 $ 3.24
      

The following table summarizes options outstanding and exercisable at September 30, 2012:

Range of Exercise Prices Outstanding as of September 30, 2012 Remaining Contractual Life in Years  Weighted-Average Exercise Price Exercisable as of September 30, 2012  Weighted-Average Exercise Price
$3.24  20,000  8.80 $ 3.24  - $ 3.24
             
   20,000  8.80 $ 3.24  - $ 3.24
             

All of our outstanding options vest over a three-year period at a rate of one-third per year upon the annual anniversary date of the grant and expire ten years from the grant date if they are not exercised. Upon exercise of stock options, it is our policy to first issue shares from treasury stock, then to issue new shares. Unexercised stock options expire between July 2016 and November 2018.

 

During the years ended September 30, 2012, 2011 and 2010, we recognized $14, $19 and $99, respectively, in compensation expense related to these awards. At September 30, 2012, the unamortized compensation cost related to outstanding unvested stock options was $25. We expect to recognize $14 and $11 of this unamortized compensation expense during the year ended September 30, 2013 and 2014.

 

There was no intrinsic value of stock options outstanding and exercisable at September 30, 2012 and 2011, respectively. The intrinsic value is calculated as the difference between the fair value as of the end of the period and the exercise price of the stock options.