Stock-Based Compensation Plans

9 Months Ended

Jun. 30, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

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, 2014, 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 419,170 at June 30, 2015.

As a result of the Spin-off and pursuant to the Employee Matters Agreement, we made certain adjustments to the exercise price and number of outstanding FRP stock options. All outstanding options held by the Company directors, Company officers and key employees on January 30, 2015 were cancelled and replaced by an equal number of FRP options at 75.14% of the previous exercise price based upon the market value of FRP less the when issued market value of the Company on that day. For FRP officers additional options were issued rather than issuing Patriot options for the 24.86% market value attributed to Patriot. The adjusted stock options are subject to the same vesting conditions and other terms that applied to the original FRP award immediately prior to the Spin-off, except as otherwise described above.

Subsequent to Spin-off, the realized tax benefit pertaining to options exercised and the remaining compensation cost of options previously granted prior to the Spin-off will be recognized by FRP or Patriot based on the employment location of the related employee or director.

The Company recorded the following stock compensation expense (including unallocated to Patriot in periods prior to the Spin-off) in its consolidated statements of income (in thousands):

	Three Months ended				Nine Months ended
	June 30,				June 30,
	2015		2014		2015		2014
Stock option grants	$	9		93		227		355
Annual director stock award		—		—		536		698
	$	9		93		763		1,053

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, 2014	326,830		$	25.43	5.0	$	3,481
Spin-off adjustment							(865	)
Spin-off conversion	17,795			20.63			155
Granted	39,425		$	26.97		$	432
Forfeited	(6,000	)		14.97		$	(35	)
Exercised	(60,300	)	$	12.95		$	(344	)
Outstanding at
June 30, 2015	317,750		$	21.64	5.9	$	2,824
Exercisable at
June 30, 2015	225,847		$	20.57	5.0	$	1,837
Vested during
nine months ended
June 30, 2015	37,546					$	329

The aggregate intrinsic value of exercisable in-the-money options was $2,679,000 and the aggregate intrinsic value of all outstanding in-the-money options was $3,429,000 based on the market closing price of $32.43 on June 30, 2015 less exercise prices.

The realized tax benefit to the Company or Patriot from options exercised in the nine months ended June 30, 2015 was $491,000. The unrecognized compensation cost of options granted but not yet vested as of June 30, 2015 was $755,000, which is expected to be recognized over a weighted-average period of 3.4 years. Gains of $1,268,000 were realized by option holders during the nine months ended June 30, 2015.