Note 8 - Stock Compensation Expense

12 Months Ended

Sep. 30, 2013

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

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

8. STOCK COMPENSATION EXPENSE

The Company maintains long-term incentive plans that authorize the Board of Directors or its Compensation Committee (the “Committee”) to grant key employees, officers and directors of the Company incentive or nonqualified stock options, stock appreciation rights, performance shares, restricted shares (“restricted stock awards”) and performance units. The Committee determines the prices and terms at which awards may be granted along with the duration of the restriction periods and performance targets. All issuances are granted out of shares authorized, as the Company has no treasury stock. The Company has the option, in its sole discretion, to settle awards under its 2008 incentive plans in cash, in lieu of issuing shares.

For fiscal 2013, 2012 and 2011, the Company recorded into selling and general administrative expenses and into its corporate/other segment $0.4 million, $1.0 million and $0.8 million, respectively, for the cost of employee and director services received in exchange for equity instruments based on the grant-date fair value of those instruments in accordance with the provisions of ASC 718. There were no recognized tax benefits during fiscal 2013, 2012 or 2011, as any benefit is offset by the Company's full valuation allowance on its net deferred tax asset. The Company has not recognized the windfall tax benefit as the resulting deduction has not been realized via a reduction of income taxes payable.

Stock option awards

During fiscal 2012 the Company awarded performance-based stock options with separate performance conditions for vesting in respect of the Company’s results and individual performances in fiscal 2012, 2013 and 2014, to named executive officers and other key employees. The Company recognizes compensation expense related to each separate service period during the applicable period. The maximum number of performance-based options available to vest subject to certain operating performance targets is 685,000 and subject to the performance measures in a given fiscal year.  During fiscal 2012, the Company granted 105,000 stock options with a vesting period through December 2012 to certain key employees. During fiscal 2013, the Company granted stock options to purchase a total of 45,000 shares of common stock with a vesting period of one to two years to certain key employees, some of which were classified as performance-based stock options similar to stock options awarded during fiscal 2012.

              Annually, options to purchase 7,500 shares of common stock are issued to each director, other than the CEO, with an exercise price equal to the fair market value of the shares. In addition, newly elected directors receive options to purchase 7,500 shares of common stock. All such options vest immediately at time of grant. Directors were issued options to purchase 37,500 shares of common stock during fiscal 2013.

The following tables summarize information for options currently outstanding and exercisable at September 30, 2013:

			Options Outstanding
Range of Exercise Prices			Number		Wtd. Avg. Remaining Life (Years)		Wtd. Avg. Exercise Price		Aggregate Intrinsic Value
$5.47	-	5.72		874,028		7	$	5.71	$	9,595,587
7.09	-	8.60		169,388		5		7.93		1,483,125
11.94	-	24.12		90,000		3		13.55		282,825
31.07				45,000		3		31.07		-
$5.47	-	31.07		1,178,416					$	11,361,537

			Options Exercisable
Range of Exercise Prices			Number		Wtd. Avg. Remaining Life (Years)		Wtd. Avg. Exercise Price		Aggregate Intrinsic Value
$5.47	-	5.72		224,028		6	$	5.69	$	2,465,087
7.09	-	8.60		101,888		3		7.97		888,400
11.94	-	24.12		90,000		3		13.55		282,825
31.07				45,000		3		31.07		-
$5.47	-	31.07		460,916					$	3,636,312

Presented below is a summary of stock option plans activity for fiscal 2012 and 2013:

	Options			Wtd. Avg. Exercise Price		Aggregate Intrinsic Value
Exercisable at September 30, 2011		403,337		$	21.43	$	395,517
Outstanding at September 30, 2011		414,587		$	21.41	$	395,517
Granted		1,331,250			6.02
Exercised		(2,000	)		2.07		11,240
Forfeited or expired		(300,000	)		17.20
Outstanding at September 30, 2012		1,443,837		$	8.12	$	2,260,688
Exercisable at September 30, 2012		300,087		$	17.06	$	66,600
Outstanding at September 30, 2012		1,443,837		$	8.12	$	2,260,688
Granted		82,500			7.48
Exercised		(40,603	)		5.95		435,948
Forfeited or expired		(307,318	)		10.26
Outstanding at September 30, 2013		1,178,416		$	7.60	$	11,361,537
Exercisable at September 30, 2013		460,916		$	10.20	$	3,636,312

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

Assumptions	Fiscal 2013			Fiscal 2012			Fiscal 2011
Expected life of option (years)	3	-	5	3	-	5		5
Risk-free interest rate	0.4%	-	0.9%	0.4%	-	0.8%		2.4	%
Volatility of stock	59%	-	75%	72%	-	79%		73	%
Forfeiture rate	0%	-	16%	0%	-	16%		0	%

The fair value of the options granted during fiscal 2013, 2012 and 2011 was $0.4 million, $4.4 million and $0.3 million, respectively. As of September 30, 2013, the Company had $2.3 million total unrecognized compensation expense, net of estimated forfeitures related to stock option plans which will be recognized as expense over a remaining weighted average period of 1 year. Cash proceeds received from the exercise of stock options were $0.2 million, $0.1 million and $0.1 million for fiscal 2013, 2012 and 2011, respectively. The Company uses historical volatility for a period of time that is comparable to the expected life of the option.

Restricted stock awards

Under the Company’s equity incentive plans, employees and directors may be granted restricted stock awards with participation rights which are valued based upon the fair market value on the date of the grant. The balance of restricted stock awards outstanding was 15,000 shares as of September 30, 2012. As of September 30, 2013, there were no restricted stock awards outstanding.

In accordance with ASC 718, the Company determined its practice of settling vested restricted stock awards in cash resulted in a modification from equity to liability accounting for the remaining unvested restricted shares. The fair value of the modified liability award is measured each reporting date through settlement and any adjustments to increase or decrease the liability are recorded either as compensation cost or a charge to equity.

During fiscal 2013, the Company continued to recognize compensation cost for the original value of the award as the fair value of the original award is greater than the period-end fair value of unvested restricted shares. The difference between the change in the fair value of the liability and stock compensation recognized during the year of less than $0.1 million was recorded to additional paid-in capital.