(b)	Stock-Based Compensation Plans - During fiscal 2022, the Company had two active stock-based compensation plans, the 2012 Stock Incentive Plan, which became effective January 25, 2012 (the “2012 Plan”) and the 2021 Omnibus Award Plan, which became effective January 27, 2021 (the “2021 Plan”).

The 2021 Plan is authorized to grant new shares for options, restricted shares or restricted share units for up to 2,839 shares, including 1,839 non-granted shares from the 2012 Plan permitted to be carried forward and added to the 2021 Plan authorized limit.

Considering grants, cancellation and forfeitures that have occurred during the year, as

of September 30, 2022,

the

remaining authorized limit

under the 2021 Plan totals approximately

2,200 shares. Options may be granted at exercise prices not less than 100% of the closing market value of the underlying common shares on the date of grant and have maximum terms up to ten years. Vesting schedules for options, restricted shares and restricted share units are established at the time of grant and may be set based on future service periods, achievement of performance targets, or a combination thereof. All options contain provisions restricting their transferability and limiting their exercise in the event of termination of employment, or the disability or death of the optionee. We recognize compensation expense for all share-based payments made to employees, based upon the fair value of the share-based payment on the date of the grant.

During fiscal years 2020 through 2022, we granted, in the aggregate for the three-year period, approximately 875 restricted share units (with weighted-average grant date fair values of $10.13 per share in fiscal 2020, $18.81 per share in fiscal 2021 and $20.50 per share in fiscal 2022) to certain employees, including CEO Jack Kenny, as separately detailed below. The units granted in fiscal 2022 were generally time-vested restricted share units vesting in total on the fourth anniversary of the grant date, while units granted in fiscal 2021 and 2020 were generally time-vested restricted share units vesting in total on the third anniversary of the grant date.

Additionally, during fiscal 2022, we granted approximately 105 restricted share units (with a weighted-average grant date fair value of $19.54 per share) to certain employees, including

Mr.

Kenny to incentivize the achievement of certain Company and segment net revenues and operating targets in fiscal 2024. These awards can only be earned if specified net revenues and operating income thresholds are achieved during fiscal 2024, with increased amounts available to be earned as established increased levels are achieved, which range from 50% to 200% of the “targeted” payout. Based upon information available as September 30, 2022, it is estimated that these performance-based restricted stock units will be paid out at the target level, and the associated stock compensation expense is being recorded ratably through September 30, 2024. Such expense totaled approximately $510 during fiscal 2022.

During fiscal 2020, in connection with Mr. Kenny’s Amended and Restated Employment Agreement, effective October 1, 2019, we granted to Mr. Kenny: (i) options to purchase approximately 198 shares of common stock of the Company (with a grant date fair value of $3.38 per share) vesting on a pro rata basis over the three years ending October 1, 2022; and (ii) approximately 100 restricted share units (with a grant date fair value of $10.10 per share) vesting 100% on the October 1, 2022, which are included within the restricted share units noted above.

Giving effect to these grants, cancellations and certain other activities for restricted shares and restricted share units throughout the years, including conversions to common shares, forfeitures, and new hire and employee promotion grants, approximately 790 restricted share units remain outstanding as of September 30, 2022, with a weighted-average grant date fair value of $15.93 per share, a weighted-average remaining vesting period of 1.08 years and an aggregate intrinsic value of $24,898. The weighted-average grant date fair value of the approximate 306 restricted share units that vested during fiscal 2022 was $17.34 per share.

The amount of stock-based compensation expense was $6,900, $4,156 and $3,802 for the years ended September 30, 2022, 2021 and 2020, respectively. The fiscal 2022 expense is comprised of $1,414 related to stock options and $5,486 related to restricted share units; the fiscal 2021 expense is comprised of $1,080 related to stock options and $3,076 related to restricted share units ; and the fiscal 2020 expense is comprised of $1,006 related to stock options and $2,796 related to restricted share units. The total income tax benefit recognized in the Consolidated Statements of Operations for these stock-based compensation arrangements was $1,638, $1,516 and $898, for the years ended September 30, 2022, 2021 and 2020, respectively. As of September 30, 2022, we expect future stock compensation expense for unvested options and unvested restricted share units to total $905 and $5,821, respectively, which will be recognized during fiscal years 2023 through 2026.

We recognize stock-based compensation expense only for the portion of shares that we expect to vest. As such, we apply estimated forfeiture rates to our stock-based compensation expense calculations. These rates have been derived using historical forfeiture data, stratified by several employee groups, and range from 0% to 16% in each of the years ended September 30, 2022, 2021 and 2020. During the years ended September 30, 2022, 2021 and 2020, we recorded $192, $183 and $148, respectively, in stock-based compensation expense to adjust estimated forfeiture rates to actual.

We have elected to use the Black-Scholes option pricing model to determine grant-date fair value for stock options, with the following assumptions: (i) expected share price volatility based on the average of Meridian’s historical volatility over the options’ expected lives and implied volatility based on the value of tradable call options; (ii) expected life of options based on contractual lives, employees’ historical exercise behavior and employees’ historical post-vesting employment termination behavior; (iii) risk-free interest rates based on treasury rates that correspond to the expected lives of the options; and (iv) dividend yield based on the expected yield on underlying Meridian common stock. A summary of these key assumptions are as follows:


Year ended September 30,	2022		2021			2020
Share price volatility		51%-59%		53%-59	%		34	%
Life of option		4.00-7.06 yrs.		4.00-7.47 yrs.			6.51 yrs.
Risk-free interest rates		0.95%-1.73%		0.26%-0.79	%		1.60	%
Dividend yield		0%		0	%		0	%

A summary of the status of our stock option plans as of September 30, 2022, and changes during the year ended September 30, 2022, is presented in the table and narrative below:


	Options			Wtd Avg Exercise Price		Wtd Avg Remaining Life (Yrs)		Aggregate Intrinsic Value
Outstanding beginning of period		1,001		$	15.31
Grants		163			19.52
Exercises		(186	)		13.27
Forfeitures		—			—
Cancellations		(9	)		20.26

Outstanding end of period		969		$	16.55		6.19	$	14,515

Exercisable end of period		612		$	16.62		4.97	$	9,124

A summary of the status of our nonvested options as of September 30, 2022, and changes during the year ended September 30, 2022, is presented below:


	Options			Weighted- Average Grant Date Fair Value
Nonvested beginning of period		403		$	5.70
Granted		163			9.26
Vested		(209	)		5.73
Forfeitures		—			—

Nonvested end of period		357		$	7.30

For the years ended September 30, 2022, 2021 and 2020: (i) the weighted average grant-date fair value of options granted was $9.26, $9.18 and $3.54, respectively; (ii) the total intrinsic value of options exercised was $3,032, $2,890 and $1,585, respectively; and (iii) the total grant-date fair value of options that vested was $1,187, $621 and $528, respectively.

Cash received from options exercised was $2,450, $3,052 and $3,559 for the years ended September 30, 2022, 2021 and 2020, respectively.