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Stock-Based Compensation Plans

3 Months Ended

Jun. 30, 2011

Stock-Based Compensation Plans

(7) Stock-Based Compensation Plans. As more fully described in Note 7 to the Company’s notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended September 30, 2010, the Company’s stock-based compensation plan permits the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, and stock awards. The number of common shares available for future issuance was 644,250 at June 30, 2011.

The Company recorded the following stock compensation expense in its consolidated statements of income (in thousands):

	THREE MONTHS		NINE MONTHS
	ENDED JUNE 30,		ENDED JUNE 30,
	2011	2010	2011	2010
Stock option grants	$ 79	68	290	335
Restricted stock awards granted in 2006	-	-	-	48
Annual director stock award	-	-	334	354
	$ 79	68	624	737

A summary of changes in outstanding options is presented below (in thousands, except share and per share amounts):

		Weighted	Weighted	Weighted
	Number	Average	Average	Average
	of	Exercise	Remaining	Grant Date
Options	Shares	Price	Term (yrs)	Fair Value
Outstanding at
October 1, 2010	633,900	$ 14.00	4.1	$ 4,206
Granted	29,160	$ 25.60		$ 293
Exercied	54,035	$ 9.95		$ 274
Forfeited	-	$ -		$ -
Outstanding at
June 30, 2011	609,025	$ 14.92	3.8	$ 4,225
Exercisable at
June 30, 2011	522,397	$ 12.93	3.0	$ 3,254
Vested during
nine months ended
June 30, 2011	23,442			$ 248

The aggregate intrinsic value of exercisable in-the-money options was $5,223,000 and the aggregate intrinsic value of all outstanding in-the-money options was $5,223,000 based on the market closing price of $22.37 on June 30, 2011 less exercise prices. Gains of $869,000 were realized by option holders during the nine months ended June 30, 2011. The realized tax benefit from options exercised for the nine months ended June 30, 2011 was $333,000. Total compensation cost of options granted but not yet vested as of June 30, 2011 was $777,000, which is expected to be recognized over a weighted-average period of 2.5 years.

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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