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Stock-based Compensation | 6 Months Ended
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Mar. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Stock-based Compensation | Stock-based Compensation For the three months ended March 31, 2012, our total stock-based compensation, included in general and administrative expenses (G&A), was approximately $1.2 million ($0.8 million net of tax). The fair value of each option/stock-based stock appreciation right (SSAR) grant is estimated on the date of grant using the Black-Scholes option-pricing model. The fair value of each performance-based, nonvested stock grant is estimated on the date of grant using the Monte Carlo valuation method. The cash-settled component of any awards granted to employees are accounted for as a liability award and the liability is adjusted to fair value each reporting period until vested. Non-performance based, nonvested stock is valued based on the market price of the common stock on the date of the grant. During the six months ended March 31, 2012 and 2011, employees surrendered 12,553 and 15,080 shares, respectively, to us in payment of minimum tax obligations upon the vesting of stock awards under our stock incentive plans. We valued the stock at the market price on the date of surrender, for an aggregate value of approximately $34,000 and $64,000 for the six months ended March 31, 2012 and 2011, respectively. Stock Options: We used the following assumptions for our options granted during the six months ended March 31, 2012:
Expected life of options | 5.0 years |
Expected volatility | 44.77 | %
Expected discrete dividends | — |
Weighted average risk-free interest rate | 0.90 | %
Weighted average fair value | $ | 0.86 |
The expected volatility is based on the historic returns of our stock and the implied volatility of our publicly-traded options. We assumed no dividends would be paid since our Board of Directors has suspended payment of dividends indefinitely and payment of dividends is restricted under our Senior Note covenants. The risk-free interest rate is based on the term structure of interest rates at the time of the option grant and we have relied upon a combination of the observed exercise behavior of our prior grants with similar characteristics, the vesting schedule of the current grants, and an index of peer companies with similar grant characteristics to determine the expected life of the options. The intrinsic value of a stock option/SSAR is the amount by which the market value of the underlying stock exceeds the exercise price of the option/SSAR. At March 31, 2012, our SSAR/stock options outstanding had an intrinsic value of $0.6 million. The intrinsic value of SSARs/stock options vested and expected to vest in the future was $0.6 million. The SSARS/stock options vested and expected to vest in the future had a weighted average expected life of 3.0 years. There was no aggregate intrinsic value of exercisable SSARs/stock options as of March 31, 2012. The following table summarizes stock options and SSARs outstanding as of March 31, 2012, as well as activity during the three and six months then ended:
| Three Months Ended |  | Six Months Ended
| March 31, 2012 |  | March 31, 2012
| Shares |  | Weighted- Average Exercise Price |  | Shares |  | Weighted- Average Exercise Price
Outstanding at beginning of period | 2,360,882 |  |  | $ | 8.08 |  |  | 1,876,238 |  |  | $ | 9.77 |
Granted | — |  |  | — |  |  | 547,536 |  |  | 2.16 |
Expired | (43,835 | ) |  | 16.77 |  |  | (47,303 | ) |  | 18.33 |
Forfeited | (35,363 | ) |  | 4.91 |  |  | (94,787 | ) |  | 4.97 |
Outstanding at end of period | 2,281,684 |  |  | $ | 7.96 |  |  | 2,281,684 |  |  | $ | 7.96 |
Exercisable at end of period | 779,936 |  |  | $ | 12.47 |  |  | 779,936 |  |  | $ | 12.47 |
Vested or expected to vest in the future | 2,259,086 |  |  | $ | 7.99 |  |  | 2,259,086 |  | 7.99 |  | $ | 7.99 |
Nonvested Stock Awards: Compensation cost arising from nonvested stock awards granted to employees is recognized as an expense using the straight-line method over the vesting period. As of March 31, 2012 and September 30, 2011, there was $3.6 million and $4.0 million, respectively, of total unrecognized compensation cost related to nonvested stock awards included in paid-in capital. The cost remaining at March 31, 2012 is expected to be recognized over a weighted average period of 1.3 years. During the six months ended March 31, 2012, we issued 547,536 shares of performance-based restricted stock (Performance Shares) to our executive officers and certain corporate employees. Each Performance Share represents a contingent right to receive one share of the Company’s common stock if vesting is satisfied at the end of the three-year performance period. The number of shares that will vest at the end of the three-year performance period will depend upon the level to which the following two performance criteria are achieved 1) Beazer’s total shareholder return (TSR) relative to a group of peer companies and 2) the compound annual growth rate (CAGR) during the three-year performance period of Beazer common stock. The target number of Performance Shares that vest may be increased by up to 50% based on the level of achievement of the above criteria as defined in the award agreement. Payment for Performance Shares in excess of the target number (547,536) will be settled in cash. Any portion of the Performance Shares that do not vest at the end of the period will be forfeited. The grants of the performance-based, nonvested stock were valued using the Monte Carlo valuation method and had an estimated fair value of $1.13 per share, a portion of which is attributable to the potential cash-settled liability aspect of the grant which is included in Other Liabilities. A Monte Carlo simulation model requires the following inputs: 1) expected dividend yield on the underlying stock, 2) expected price volatility of the underlying stock, 3) risk-free interest rate for the period corresponding with the expected term of the award and 4) fair value of the underlying stock. For the Company and each member of the peer group, the following inputs were used, as applicable, in the Monte Carlo simulation model to determine the fair value as of the grant date for the Performance Shares: 0% dividend yield for the Company, expected price volatility ranging from 36.0% to 61.1% and a risk-free interest rate of 0.43%. The methodology used to determine these assumptions is similar to that for the Black-Scholes Model used for stock option grants discussed above; however the expected term is determined by the model in the Monte Carlo simulation. Activity relating to nonvested stock awards, including the Performance Shares for the three and six months ended March 31, 2012 is as follows:
| Three Months Ended |  | Six Months Ended
| March 31, 2012 |  | March 31, 2012
| Shares |  | Weighted Average Grant Date Fair Value |  | Shares |  | Weighted Average Grant Date Fair Value
Beginning of period | 2,236,975 |  |  | $ | 4.74 |  |  | 1,440,397 |  |  | $ | 6.77 |
Granted | — |  |  | — |  |  | 870,146 |  |  | 1.39 |
Vested | (26,527 | ) |  | 30.01 |  |  | (54,768 | ) |  | 17.11 |
Forfeited | (51,480 | ) |  | 3.81 |  |  | (96,807 | ) |  | 4.40 |
End of period | 2,158,968 |  |  | $ | 4.45 |  |  | 2,158,968 |  |  | $ | 4.45 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 93-6 -Paragraph 53 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph 64, 65, A240 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 + Details
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