Stockholders' Equity

6 Months Ended

Mar. 31, 2014

Stockholders' Equity

Stockholders' Equity

Note 9 - Stockholders’ Equity

Long Term Equity Incentive Plan

On March 21, 2013, the Executive Compensation Committee of the Board of Directors (Compensation Committee) approved a long- term equity incentive award program and awarded 264,549 RSUs with time-based vesting and 161,962 RSUs with performance-based vesting to certain officers, directors and management. On December 12, 2013, the Compensation Committee approved additional awards of 110,812 RSUs with time-based vesting and 152,694 RSUs with performance-based vesting. On March 1, 2014 an additional 21,158 RSUs with time-based vesting were approved and awarded.

Each RSU represents a contingent right to receive one share of our common stock. Dividend equivalent rights accrue with respect to the RSUs when and as dividends are paid on our common stock and vest proportionately with the RSUs to which they relate. Vested shares are delivered to the recipient following each vesting date.

The RSUs with time-based vesting that were granted in March 2013 will vest in four equal installments on each of October 1, 2013, 2014, 2015 and 2016, subject to the recipient’s continued service through such date. The RSUs with time-based vesting that were granted in December 2013 will vest in four equal installments on each of October 1, 2014, 2015, 2016 and 2017, subject to the recipient’s continued service through such date. The RSUs with time-based vesting that were granted in March 2014 will vest in three installments on October 1, 2014, 2015 and 2016. The first installment is equal to 27% of the award, the second installment is equal to 33% of the award, and the third installment is equal to 40% of the award. This is subject to the recipient’s continued service through such date.

The performance period for the performance-based vesting RSUs granted on March 21, 2013 is the period from October 1, 2012 to September 30, 2015. The performance period for the performance-based vesting RSUs granted on December 12, 2013 is October 1, 2013 to September 30, 2016. Recipients of the performance-based vesting RSUs will be eligible to vest in the RSUs at the end of the three-year performance period based on Cubic’s achievement of performance goals established by the Executive Compensation Committee over the performance period, subject to the recipient’s continued service through the end of the respective performance period. For the performance-based RSUs granted to date, the vesting will be contingent upon Cubic meeting one of three types of vesting criteria over the performance period. These three categories of vesting criteria consist of revenue growth targets, earnings targets, and return on equity targets. The level at which Cubic’s performs against scalable targets over the performance period will determine the percentage of the RSUs that will ultimately vest.

Through March 31, 2014, Cubic has granted 711,175 restricted stock units of which 69,994 have vested. At March 31, 2014, the total number of unvested RSUs that are ultimately expected to vest, after consideration of expected forfeitures and estimated vesting of performance-based RSUs is 363,311.

The following table summarizes our RSU activity for the six months ended March 31, 2014. The weighted-average grant date fair value of each RSU represents the fair market value of one share of our common stock at the grant date:

	Unvested Restricted Stock Units
			Weighted-
			Average Grant-
	Number of Shares		Date Fair Value
Unvested at September 30, 2013	421,369		$	43.76
Granted	263,506		49.51
Vested	(69,994	)	43.76
Forfeited	(458	)	43.76
Unvested at December 31, 2013	614,423		46.22
Granted	21,158		52.00
Vested	—		—
Forfeited	(8,522	)	49.88
Unvested at March 31, 2014	627,059		$	46.46