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Stock-Based Compensation
 12 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Incentive Compensation Plans

We have two stock-based compensation plans: the Management 2002 Stock Option Program (“2002 Plan”) and the 2003 Incentive Compensation Plan, as amended (“2003 Plan”).

The 2002 Plan was approved by our Board of Directors on April 1, 2002 and provided for the issuance of options to purchase 0.7 million shares of our common stock. On February 25, 2003, our Board of Directors authorized an additional 0.1 million options to purchase our common stock under the 2002 Plan. We do not intend to grant any additional options under the 2002 Plan.

The 2003 Plan was approved by our Board of Directors and adopted effective December 22, 2003 upon consummation of our initial public offering and amended on February 28, 2007 and February 22, 2012 by our stockholders. The 2003 Plan, as amended, authorizes the issuance of various common stock awards, including stock options, restricted stock awards and restricted stock units, for approximately 6.3 million shares of our common stock.

As of September 30, 2020, 2.2 million shares of common stock were reserved for issuance under the 2003 Plan, of which 1.3 million shares are available for future grant.

When recording our stock-based compensation expense, we account for forfeitures as they occur. The following table summarizes the operating expense line and the impact on net income (loss) in the consolidated statements of operations in which stock-based compensation expense has been recorded for the years ended September 30, 2020, 2019, and 2018:

 Year Ended September 30,
202020192018
Educational services and facilities$64 $— $— 
Selling, general and administrative2,013 1,440 1,864 
Total stock-based compensation expense$2,077 $1,440 $1,864 
Income tax benefit$519 $360 $466 

Stock Options

We issue stock options with exercise prices equal to the closing price of our stock on the grant date and which vest upon issuance. The expiration date of stock options granted under the 2003 Plan is the earlier of the seven or ten-year anniversary of the grant date, based on the terms of the individual grant; the one-year anniversary of the termination of the participant’s employment by reason of death or disability; 90 days after the date of the participant’s termination of employment if caused by reasons other than death, disability, cause, material breach or unsatisfactory performance; or on the termination date if termination occurs for reasons of cause, material breach or unsatisfactory performance.

We estimate the fair value of each stock option grant on the date of grant using the Black-Scholes option-pricing model. The estimated fair value is affected by our stock price, as well as assumptions regarding a number of complex and subjective variables, including, but not limited to, our expected stock price volatility, the expected term of the awards and actual and projected employee stock exercise behaviors. We evaluate our assumptions on the date of each grant.
    
In determining our expected term, we have reviewed our historical share option exercise experience and determined it does not provide a reasonable basis upon which to estimate an expected term due to our limited historical award and exercise experience. Therefore, we have historically assumed the life of the options to be the term of the grant.
We determine the risk-free interest rate of our awards using the implied yield currently available for zero-coupon U.S. Government issues with a remaining term equal to the expected life of the options.
    
The expected volatility considers the volatility of the Company’s common stock that has been traded for a period commensurate with the expected life. The expected term of options granted represents the period of time that options granted are expected to be outstanding based on historical experience.
    
We have used an expected dividend yield of zero in the Black-Scholes option pricing model.
    
We did not grant stock options during the years ended September 30, 2020 and 2018. We granted 210,000 stock options during the year ended September 30, 2019. The following assumptions were used to value options granted during the year ended September 30, 2019:

Year Ended September 30, 2019
Expected years until exercised7
Risk-free interest rate2.84 %
Expected volatility52.4 %
Expected dividends— %
    

The following table summarizes stock option activity under the 2003 Plan for the years ended September 30, 2020, 2019 and 2018:
Number of 
Shares		Weighted
Average 
Exercise
Price		Weighted
Average
Remaining
Contractual
Life		Aggregate
Intrinsic
Value
(In thousands)(per Share)(Years)
Outstanding as of September 30, 2017— $— — $— 
Outstanding as of September 30, 2018— $— — $— 
Granted210 $3.14 
Exercised— $— 
Forfeited— $— 
Outstanding as of September 30, 2019210 $3.14 6.19$483 
Granted— $— 
Exercised— $— 
Forfeited— $— 
Outstanding as of September 30, 2020210 $3.14 5.18$407 
Stock options exercisable as of September 30, 2020210 $3.14 5.18$407 

As of September 30, 2020, there was no unrecognized stock-based compensation expense related to stock options.
Restricted Stock Units and Performance Units

The following table summarizes the activity for restricted stock units and performance units granted under the 2003 Plan for the years ended September 30, 2020, 2019 and 2018:
RSUPSU
Number of 
Shares
(In thousands)		Weighted Average
Grant Date
Fair Value
per Share		Number of 
Shares
(In thousands)		Weighted Average
Grant Date
Fair Value
per Share
Outstanding as of September 30, 2017523 $3.71 132 $3.11 
Granted350 $2.90 182 $2.40 
Vested(206)$4.51 — $— 
Forfeited(95)$3.55 (36)$2.74 
Outstanding as of September 30, 2018572 $2.95 278 $2.69 
Granted— $— — $— 
Adjustment to September 2017 grant based on achieved attainment level— $— 23 
Vested(228)$3.17 (108)$3.11 
Forfeited(108)$2.96 (60)$2.75 
Outstanding as of September 30, 2019236 $2.74 133 $2.40 
Granted306 $7.46 314 $7.72 
Adjustment to September 2017 grant based on achieved attainment level— $— 33 
Vested(141)$2.62 (100)$2.32 
Forfeited(63)$2.96 (39)$2.48 
Outstanding as of September 30, 2020338 $7.01 341 $7.30 

Restricted Stock Units

Our restricted stock units are issued at fair market value, which is based on the closing prices of our stock on the grant date, discounted for non-participation in anticipated dividends during the vesting period. The restrictions on these units generally lapse ratably over a three or four year period based on the terms of the individual grant. The restrictions associated with our restricted stock units awarded under the 2003 Plan will lapse upon the death, disability, or if, within one year following a change of control, employment is terminated without cause or for good reason. If employment is terminated for any other reason, all shares of restricted stock shall be forfeited upon termination.

As of September 30, 2020, unrecognized stock compensation expense related to restricted stock units was $1.8 million which is expected to be recognized over a weighted average period of 2.4 years.

Performance Units

The performance condition for performance units is compounded annual total shareholder return (“TSR”) for the measurement periods included in the grant. On the settlement date for each measurement period, participants will receive shares of our common stock equal to 0% to 150% of the performance units originally granted depending on the total stockholder return for that measurement period. The performance units vest subject to a market condition and on the settlement date which is expected to be no later than two and a half months after the end of each measurement period. 

We estimate the fair value of performance units using a Monte Carlo simulation which requires assumptions for expected volatility, risk-free rates of return, and dividend yields. Expected volatilities are derived using a method that calculates
historical volatility over a period equal to the length of the measurement period for UTI. We use a risk-free rate of return that is equal to the yield of a zero-coupon U.S. Treasury bill that is commensurate with each measurement period, and we assume that any dividends paid were reinvested. 

To receive the performance units awarded for a measurement period, participants are required to be employed by us on the settlement date unless one of the following conditions is met. Upon death or disability of a participant, the participant will receive a pro-rated number of performance units reflecting actual performance through the vesting date and the number of months of the performance period during which the participant was employed. If an employee is terminated without cause or leaves for good reason within one year following certain changes in control, a determination of whether, and to what extent the performance condition has been achieved will be based on actual performance against the stated criteria through the separation date. If an employee is terminated without cause or leaves for good reason after the one-year anniversary of certain changes in control, the participant will receive a pro-rated number of performance units reflecting actual performance through the separation date and the number of complete twelve-month periods of the performance period during which the participant was employed. If employment is terminated for any other reason, all unvested performance units shall be forfeited upon termination.

As of September 30, 2020, unrecognized stock compensation expense related to performance units was $1.6 million, which is expected to be recognized over a weighted average period of 1.4 years.