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Share-Based Compensation: | 12 Months Ended
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Sep. 30, 2012
Share-Based Compensation: |
Share-Based Compensation: |
12. Share-Based Compensation: The Company accounts for share-based compensation under the provisions of ASC Topic 505-50 and ASC Topic 718 by using the fair value method for expensing stock options and non-vested stock awards. Total share-based compensation expense was $645,000, $371,000 and $371,000 for the fiscal years ended September 30, 2012, 2011 and 2010, respectively. The income tax impact recognized as a (charge) credit to additional paid—in capital in the statement of shareholders' equity related to share-based compensation arrangements was ($5,000), $7,000 and ($2,000) for the fiscal years ended September 30, 2012, 2011 and 2010, respectively. Compensation expense related to share-based awards is recorded as a component of general and administrative expense. The Company has three share-based compensation plans, the 1998 Stock Option Plan (the "1998 Plan"), the 2003 Restricted Stock Plan (the "Restricted Plan") and the 2009 Stock-Based Incentive Compensation Plan (the "2009 Plan"). These plans were approved by the Company's shareholders. The 1998 Plan expired on November 13, 2008. The last awards under the Restricted Plan were made in 2010 and no further shares remain to award under the Restricted Plan. 1998 Stock Option Plan The 1998 Plan allowed granting of incentive and nonqualified stock options to employees, officers, directors and independent contractors and consultants. No stock options were granted to independent contractors or consultants under this plan. Incentive stock options granted under the 1998 Plan have exercise prices that are at least equal to the fair value of the common stock on grant date. Nonqualified stock options granted under the plan have exercise prices that are less than, equal to or greater than the fair value of the common stock on the date of grant. The Company reserved 3,389,000 shares of Common Stock for awards under the plan. On November 13, 2008, the 1998 Plan expired and no additional shares were granted under the Plan after that date. Following is a summary of option activity under the 1998 Plan for fiscal years ended September 30, 2012, 2011, and 2010 and changes during the periods then ended:
|  | Options |  | Weighted Average Exercise Price |  | Aggregate Intrinsic Value |
--- | --- | --- | --- | --- | --- | --- | ---
Outstanding at September 30, 2009 |  |  | 606,549 |  | $ | 9.45 |  | $ | — |
Granted |  |  | — |  |  | — |  |  | — |
Exercised |  |  | — |  |  | — |  |  | — |
Cancelled |  |  | (115,349 | ) |  | 10.49 |  |  | — |
Outstanding at September 30, 2010 |  |  | 491,200 |  | $ | 9.21 |  | $ | — |
Granted |  |  | — |  |  | — |  |  | — |
Exercised |  |  | — |  |  | — |  |  | — |
Cancelled |  |  | (103,400 | ) |  | 10.95 |  |  | — |
Outstanding at September 30, 2011 |  |  | 387,800 |  | $ | 8.74 |  | $ | — |
Granted |  |  | — |  |  | — |  |  | — |
Exercised |  |  | — |  |  | — |  |  | — |
Cancelled |  |  | (11,600 | ) |  | 12.65 |  |  | — |
Outstanding at September 30, 2012 |  |  | 376,200 |  | $ | 8.62 |  |  | — |
Vested and expected to vest |  |  | 375,200 |  | $ | 8.60 |  | $ | — |
Options exercisable at September 30, 2012 |  |  | 366,200 |  | $ | 8.64 |  | $ | — |
In fiscal 2012 and 2011, no options were granted or exercised under the 1998 Plan; therefore, there is no weighted-average grant date fair value of individual options granted and no intrinsic value attributable to exercised options. The following table summarizes information about stock options under the 1998 Plan at September 30, 2012:
|  | Options Outstanding |  | Options Exercisable |
--- | --- | --- | --- | --- | ---
Range of Exercise Prices |  | Outstanding As of September 30, 2012 |  | Weighted- Average Remaining Contractual Life |  | Weighted- Average Exercise Price |  | As of September 30, 2012 |  | Weighted- Average Exercise Price |
$ — - $ 5.00 |  |  | 181,800 |  |  | 0.6 |  | $ | 4.21 |  |  | 181,800 |  | $ | 4.21 |
$ 5.01 - $10.00 |  |  | 101,400 |  |  | 3.3 |  |  | 7.60 |  |  | 91,400 |  |  | 7.58 |
$10.01 - $15.00 |  |  | 47,500 |  |  | 2.5 |  |  | 13.62 |  |  | 47,500 |  |  | 13.62 |
$15.01 - $20.00 |  |  | 12,000 |  |  | 2.5 |  |  | 16.93 |  |  | 12,000 |  |  | 16.93 |
$20.01 - $27.00 |  |  | 33,500 |  |  | 4.3 |  |  | 25.57 |  |  | 33,500 |  |  | 25.57 |
|  |  | 376,200 |  |  | 1.9 |  | $ | 8.62 |  |  | 366,200 |  | $ | 8.64 |
Fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Options are exercisable over a maximum term of ten years from date of grant and typically vest over periods of three to five years from the grant date. The expected term of options represents the period of time that options granted are expected to be outstanding and is based on historical experience. Expected volatility is based on historical volatility of the Company's stock. The risk free interest rate is based on U.S. Treasuries with constant maturities in effect at the time of grant. Compensation expense for employee stock options includes an estimate for forfeitures, and is recognized ratably over the vesting term. Because no options were granted from the 1998 Plan in fiscal 2012, 2011 and 2010, the data for expected dividend, expected volatility, weighted average risk-free interest rate and expected lives is not applicable. Total compensation expense associated with stock option awards to employees under the 1998 Plan was $67,000, $117,000, and $159,000 for fiscal years ended September 30, 2012, 2011 and 2010, respectively. At September 30, 2012, unrecognized compensation expense of $11,000, net of forfeitures related to non-vested stock options, is expected to be recognized during fiscal 2013. Restricted Plan The Restricted Plan for non-employee directors was approved by shareholders at the Company's February 26, 2004 Annual Meeting of Shareholders. It called for an annual award of non-vested stock having a fair market value of $40,000 at close of business on October 1 of each year for all eligible non-employee directors. The stock was awarded in four quarterly installments during the fiscal year provided the director was still serving on the board on the quarterly issue date. The last awards under the Restricted Plan were made in 2010, and no further shares remain to award under this Plan. However, the Company continued to make an annual grant of non-vested stock under the 2009 Plan. Total share-based compensation expense associated with the annual grant of non-vested stock to non-employee directors under the Restricted Plan was $0, $0 and $200,000 for the fiscal years ended September 30, 2012, 2011 and 2010, respectively. The following table outlines restricted stock awards from the Restricted Plan for fiscal years ended September 30, 2012, 2011 and 2010:
|  | Non-vested Stock Awards |  | Weighted Average Share Price |
--- | --- | --- | --- | --- | ---
Balance at September 30, 2009 |  |  | 9,050 |  | $ | 5.52 |
Granted |  |  | 41,150 |  |  | 4.86 |
Issued |  |  | (37,862 | ) |  | 5.02 |
Cancelled |  |  | — |  |  | — |
Balance at September 30, 2010 |  |  | 12,338 |  | $ | 4.86 |
Granted |  |  | 43,385 |  |  | 4.61 |
Issued |  |  | (42,237 | ) |  | 5.49 |
Cancelled |  |  | — |  |  | — |
Balance at September 30, 2011 |  |  | 13,486 |  | $ | 4.61 |
Granted |  |  | — |  |  | — |
Issued |  |  | — |  |  | — |
Cancelled |  |  | — |  |  | — |
Balance at September 30, 2012 |  |  | 13,486 |  | $ | 4.61 |
2009 Stock-Based Incentive Compensation Plan The 2009 Plan authorizes the grant of Stock Appreciation Rights ("SARs"), Restricted Stock, Options and other equity-based awards under the 2009 Plan (collectively referred to as "Awards"). Options granted under the 2009 Plan may be either "incentive stock options" as defined in section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or nonqualified stock options, as determined by the Compensation Committee of the Company's Board of Directors (the "Compensation Committee"). Subject to an adjustment necessary upon a stock dividend, recapitalization, forward split or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase or share exchange, extraordinary or unusual cash distribution or other similar corporate transaction or event, the maximum number of shares of common stock available for Awards under the 2009 Plan shall be 1,200,000, all of which may be issued pursuant to Awards of incentive stock options. In addition, the Plan provides that no more than 300,000 shares of common stock may be awarded to any employee as a performance-based Award under Section 162(m) of the Code. At September 30, 2012 there were 655,333 shares of common stock available for awards under the plan. If any Award is forfeited, or if any Option terminates, expires or lapses without being exercised, the related shares of common stock subject to such Award will again be available for future grant. Any shares tendered by a participant in payment of the exercise price of an Option or the tax liability with respect to an Award (including, in any case, shares withheld from any such Award) will not be available for future grant under the 2009 Plan. If there is any change in the Company's corporate capitalization, the Compensation Committee must proportionately and equitably adjust the number and kind of shares of common stock which may be issued in connection with future Awards, the number and type of shares of common stock covered by Awards then outstanding under the 2009 Plan, the number and type of shares of common stock available under the 2009 Plan, the exercise or grant price of any Award, or if deemed appropriate, make provision for a cash payment with respect to any outstanding Award, provided that no adjustment may be made that would adversely affect the status of any Award that is intended to be a performance-based Award under Section 162(m) of the Code, unless otherwise determined by the Compensation Committee. In addition, the Compensation Committee may make adjustments in the terms and conditions of any Awards, including any performance goals, in recognition of unusual or nonrecurring events affecting the Company or any subsidiary, or in response to changes in applicable laws, regulations or accounting principles, provided that no adjustment may be made that would adversely affect the status of any Award that is intended to be a performance-based Award under Section 162(m) of the Code, unless otherwise determined by the Compensation Committee. Following is a summary of option activity under the 2009 Plan for fiscal years ended September 30, 2012 and 2011, and changes during the periods then ended:
|  | Options |  | Weighted Average Exercise Price |  | Aggregate Intrinsic Value |
--- | --- | --- | --- | --- | --- | --- | ---
Outstanding at September 30, 2010 |  |  | 50,000 |  | $ | 4.50 |  | $ | — |
Granted |  |  | 180,000 |  |  | 5.28 |  |  | — |
Exercised |  |  | — |  |  | — |  |  | — |
Cancelled |  |  | — |  |  | — |  |  | — |
Outstanding at September 30, 2011 |  |  | 230,000 |  | $ | 5.11 |  | $ | — |
Granted |  |  | 280,000 |  |  | 3.92 |  |  | — |
Exercised |  |  | — |  |  | — |  |  | — |
Cancelled |  |  | (50,000 | ) |  | 4.50 |  |  | — |
Outstanding at September 30, 2012 |  |  | 460,000 |  | $ | 4.45 |  | $ | — |
Vested and expected to vest |  |  | 460,000 |  | $ | 4.45 |  | $ | — |
Options exercisable at September 30, 2012 |  |  | 60,003 |  | $ | 5.28 |  | $ | — |
In fiscal 2012 and 2011, no options were exercised under the 2009 Plan; therefore, there is no intrinsic value attributable to exercised options. The following table summarizes information about stock options under the 2009 Plan at September 30, 2012:
|  | Options Outstanding |  | Options Exercisable |
--- | --- | --- | --- | --- | ---
Range of Exercise Prices |  | Outstanding As of September 30, 2012 |  | Weighted- Average Remaining Contractual Life |  | Weighted- Average Exercise Price |  | As of September 30, 2012 |  | Weighted- Average Exercise Price |
$ — - $ 5.00 |  |  | 280,000 |  |  | 9.4 |  | $ | 3.92 |  |  | — |  | $ | — |
$5.01 - $10.00 |  |  | 180,000 |  |  | 8.9 |  |  | 5.28 |  |  | 60,003 |  |  | 5.28 |
|  |  | 460,000 |  |  | 9.2 |  | $ | 4.45 |  |  | 60,003 |  | $ | 5.28 |
Fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Options are exercisable over a maximum term of ten years from date of grant and typically vest over periods of three to five years from the grant date. The expected term of options represents the period of time that options granted are expected to be outstanding and is based on historical experience and the expected turnover rate of the employees receiving the options. Expected volatility is based on historical volatility of the Company's stock. The risk free interest rate is based on U.S. Treasuries with constant maturities in effect at the time of grant. Compensation expense for employee stock options includes an estimate for forfeitures and is recognized ratably over the vesting term. Below are the fair value assumptions used to record compensation expense, related to the 2009 Plan, for the period identified:
2009 Plan |
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|  | Fiscal Year Ended September 30, |
|  | 2012 |  | 2011 |  | 2010 |
Expected dividend rate |  |  | — |  |  | — |  |  | — |
Expected volatility |  |  | 71.1 | % |  | 63.0 | % |  | 70.0 | %
Weighted average risk-free interest rate |  |  | 2.1 | % |  | 1.9 | % |  | 2.6 | %
Expected lives (years) |  |  | 8.70 |  |  | 10.00 |  |  | 4.15 |
Total compensation expense associated with stock option awards to employees under the 2009 Plan was $377,000, $54,000 and $23,000 for fiscal years ended September 30, 2012, 2011 and 2010, respectively. Total share-based compensation expense associated with the annual grant of restricted stock to non-employee directors under the 2009 Plan was $200,000, $200,000 and $0 for the fiscal years ended September 30, 2012, 2011 and 2010, respectively. At September 30, 2012, unrecognized compensation expense of approximately $1,074,000, net of forfeitures, related to non-vested stock options under the 2009 Plan, is expected to be recognized over a period of approximately 2 years.

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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 SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 Reference 2: 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 Reference 3: 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 4: 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 5: 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 6: 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 7: 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 8: 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 + Details
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