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EQUITY-BASED INCENTIVE AWARDS | 3 Months Ended
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Dec. 31, 2012
EQUITY-BASED INCENTIVE AWARDS |
EQUITY-BASED INCENTIVE AWARDS | 8. EQUITY-BASED INCENTIVE AWARDS Omnibus Plan The Company has an Omnibus Incentive Plan (“the Omnibus Plan”) which provides for equity incentives to employees. The Omnibus Plan was designed with the intent of encouraging employees to acquire a vested interest in the growth and performance of the Company. The Omnibus Plan permits the issuance of up to 150,000 shares of the Company’s common stock in the form of stock options, restricted stock awards, restricted stock units, performance share awards as well as awards such as stock appreciation rights, performance units, performance shares, bonus shares, and dividend share awards payable in the form of common stock or cash. The number of shares issuable under the Omnibus Plan is subject to customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. At December 2012, awards with respect to a total of 131,195 shares, net of forfeitures, had been awarded pursuant to the Omnibus Plan and awards with respect to another 18,805 shares may be awarded under the plan. Stock Options During Q1 2013, the Company issued 8,000 incentive stock options to various employees, pursuant to the provisions of the Company’s Omnibus Plan. These awards vest in equal installments over three and five year service periods. The awards had an estimated fair value at the grant date of approximately $0.1 million using the Black-Scholes option pricing model. The following assumptions were used in connection with the Black- Scholes option pricing calculation:
|  | Stock Option Pricing Assumptions |
|  | Q1 2013 |
Risk-free interest rate |  | 1.46% |
Dividend yield |  | 1.10% |
Expected volatility |  | 25.00% |
Expected life in years |  | 6 |
The stock options issued by the Company expire ten years from the grant date and include graded vesting schedules ranging between three and five years. Stock options issued and outstanding at December 2012 are summarized as follows:
|  |  |  |  |  | Remaining |  |  |  | Exercisable |
|  | Exercise Price |  | Number Outstanding |  | Weighted-Average Contractual Life |  | Weighted-Average Exercise Price |  | Number Exercisable |  | Weighted-Average Exercise Price |
Fiscal 2007 |  | $18.00 |  | 25,000 |  | 3.95 years |  | $ | 18.00 |  | 25,000 |  | $ | 18.00 |
Fiscal 2010 |  | $51.50 |  | 5,500 |  | 7.33 years |  | $ | 51.50 |  | 2,200 |  | $ | 51.50 |
Fiscal 2012 |  | $53.80 - $65.97 |  | 6,500 |  | 8.84 years |  | $ | 54.74 |  | 1,200 |  | $ | 53.80 |
Fiscal 2013 |  | $62.33 |  | 8,000 |  | 4.38 years |  | $ | 62.33 |  | — |  | $ | — |
|  |  |  | 45,000 |  |  |  | $ | 35.28 |  | 28,400 |  | $ | 22.11 |
The following is a summary of stock option activity for the three months ended December 2012:
|  | Number of Shares |  | Weighted Average Exercise Price |
Outstanding at September 2012 |  | 37,042 |  | $ | 29.43 |
Granted |  | 8,000 |  | 62.33 |
Exercised |  | (42 | ) | 28.80 |
Forfeited/Expired |  | — |  | — |
Outstanding at December 2012 |  | 45,000 |  | $ | 35.28 |
Restricted Stock Units During Q1 2013 the Company issued 15,000 restricted stock unit awards to members of its management team pursuant to the provisions of the Company’s Omnibus Plan. Nonvested restricted stock units at December 2012 are as follows:
|  | Restricted Stock Units(1) |  | Restricted Stock Units(2) |  | Restricted Stock Units(3) |
Date of award: |  | November 22, 2010 |  | October 26, 2011 |  | October 23, 2012 |
Original number of awards issued: |  | 12,000 |  | 15,900 |  | 15,000 |
Service period: |  | 36 months |  | 36 months |  | 36 months |
Estimated fair value of award at grant date |  | $864,000 |  | $855,000 |  | $935,000 |
Awards outstanding at December 2012 |  | 4,000 |  | 10,600 |  | 15,000 |
Fair value of non-vested awards at December 2012: |  | $258,000 |  | $683,000 |  | $967,000 |
(1) 8,000 of the restricted stock units were vested at December 2012. The remaining 4,000 restricted stock units will vest on November 22, 2013. (2) 5,300 of the restricted stock units were vested as of December 2012. The remaining 10,600 restricted stock units will vest in equal amounts on October 25, 2013 and October 25, 2014. (3) The 15,000 restricted stock units will vest in equal amounts on October 23, 2013, October 23, 2014 and October 23, 2015. There is no direct cost to the recipients of the restricted stock units, except for any applicable taxes. The recipients of the restricted stock units are entitled to the customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. All cash dividends and/or distributions payable to restricted stock recipients will be held in escrow until all the conditions of vesting have been met. The restricted stock units provide that the recipients can elect, at their option, to receive either common stock in the Company, or a cash settlement based upon the closing price of the Company’s shares, at the time of vesting. Based on these award provisions, the compensation expense recorded in the Company’s Condensed Statement of Operations reflects the straight-line amortized fair value based on the period end closing price.
|  | Number of Shares |  | Weighted Average Fair Value |
Nonvested restricted stock units at September 2012 |  | 36,700 |  | $ | 65.00 |
Granted |  | 15,000 |  | 62.33 |
Vested |  | (22,100 | ) | 62.86 |
Expired |  | — |  | — |
Nonvested restricted stock units at December 2012 |  | 29,600 |  | $ | 64.45 |
All Equity-Based Awards (stock options and restricted stock units) Net income before income taxes included compensation expense of approximately $0.3 million during both Q1 2013 and Q1 2012 related to the amortization of all equity-based compensation awards. Total unamortized compensation expense related to these awards at December 2012 and December 2011 was approximately $1.9 million and $2.3 million, respectively.

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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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