13. EQUITY AWARD PLANS

The Company has three equity award plans: the 1994 Director Stock Option Plan (the “Director Plan”), the Amended and Restated 1987 Stock Option Plan (the “1987 Plan”) and the Amended and Restated 2005 Equity Incentive Plan (the “2005 Plan”). The Director Plan expired on December 31, 2004 and no further awards may be granted under the Director Plan. The 1987 Plan expired on December 9, 2007, and no further awards may be issued under the 1987 Plan. Options issued under the Director Plan and the 1987 Plan will remain outstanding until they have expired, been exercised or have otherwise terminated. Up to a total of 4,350,000 options were able to be issued under the 1987 Plan and the Director Plan (including up to a total of 400,000 options which were issuable under the Director Plan), but 521,354 of these options became unavailable for grant upon the expiration of the 1987 Plan on December 9, 2007 and the expiration of the Director Plan on December 31, 2004. In January 2006, the stockholders of the Company approved the adoption of the 2005 Plan and, subsequently, have approved amendments to increase the number of issuable shares. Under the 2005 Plan, employees, directors, consultants and other individuals who provide services to the Company may be granted awards in the form of options, stock appreciation rights, restricted stock or restricted stock units. Up to 2,800,000 shares of the Company’s common stock may be issued in respect of awards under the 2005 Plan, as amended, with no more than 1,500,000 of those shares permitted to be issued in respect of restricted stock or restricted stock units granted under the 2005 Plan. Awards of options to purchase the Company’s common stock will have exercise prices as determined by the Compensation Committee of the Board (the “Compensation Committee”), but such exercise prices may not be lower than the fair market value of the stock on the date of grant.

No options have been granted by the Company with an exercise price less than the fair market value of the Company’s common stock on the date of grant for any of the periods presented. The majority of the options issued under the plans vest ratably over four or five-year periods, although some options have both market price and time vesting requirements, and options issued under the plans generally expire ten years from the date of grant. Restricted stock awards issued under the 2005 Plan have restrictions that lapse ratably over periods ranging from one to five years. The non-executive chairman of the Company’s Board is granted 6,000 shares of restricted stock and each non-employee director, other than the non-executive chairman, of the Company’s Board is granted 4,000 shares of restricted stock on an annual basis that will vest one year from the date of grant. The Company issues new shares of common stock upon exercise of vested options. As of September 30, 2013, there were 1,095,106 shares of the Company’s common stock available for grant under the 2005 Plan, with no more than 641,347 of those shares permitted to be issued in respect of restricted stock or restricted stock units granted under the 2005 Plan.

Stock option activity for all plans was as follows:

	Outstanding Options					Weighted Average Remaining Life		Aggregate Intrinsic Value
	(in thousands)					(years)		(in thousands)

Balance—September 30, 2012		607		$	13.05
Granted		107			20.23
Exercised		(163	)		10.01
Forfeited		(1	)		10.70
Expired		(2	)		18.70
Balance—September 30, 2013		548		$	15.35		6.9		$	9,021
Exercisable—September 30, 2013		210		$	11.40		5.2		$	4,280

During the years ended September 30, 2013, 2012 and 2011, the total intrinsic value of options exercised was $2,080,000, $1,544,000 and $9,659,000, respectively. The total cash received from these option exercises was $744,000, $107,000 and $2,285,000, respectively, and the actual tax benefit realized for the tax deductions from these option exercises was $784,000, $580,000 and $3,617,000, respectively. During fiscal 2013, 2012 and 2011, options to purchase 101,949, 119,600 and 368,800 shares of common stock, respectively, with aggregate exercise prices of $890,000, $1,007,000 and $2,428,000, respectively, were exercised by the option holders and net-share settled by the Company, such that the Company withheld 39,934, 51,041 and 109,926 shares of the Company’s common stock, respectively, which had a fair market value equal to the aggregate exercise prices of the options.

The weighted average fair value of stock options granted during fiscal 2013, 2012 and 2011 was estimated to be $7.98, $6.17 and $9.69 per option share, respectively. The weighted average fair value of each option granted is calculated on the date of grant using the Black-Scholes option pricing model.

13. EQUITY AWARD PLANS (Continued)

Weighted-average assumptions for option grants were as follows:

	Year Ended September 30,
	2013			2012			2011

Expected dividend yield		3.5	%		4.5	%		3.2	%
Expected price volatility		59.6	%		63.0	%		62.5	%
Risk-free interest rate		0.8	%		1.0	%		2.4	%
Expected life		5.5 years			5.5 years			5.8 years

Expected dividend yield was determined using a weighted average of the Company’s annualized dividend rate compared to the market price of the Company’s common stock as of the grant date. Expected volatility was determined using a weighted average of the historic volatility of the Company’s common stock as of the option grant date measured over a period equal to the expected life of the grant. Risk-free interest rates were based on the United States Treasury yield curve in effect at the date of the grant. Expected lives were determined using a weighted average of the historic lives of previously issued grants of the Company’s options.

The following table summarizes information about stock options outstanding as of September 30, 2013:

	Options Outstanding							Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Life		Weighted Average Exercise Price			Number Exercisable		Weighted Average Exercise Price
	(in thousands)		(years)					(in thousands)

$ 3.52 to $ 6.50		35		3.0		$	5.10		30		$	5.41
6.51 to 7.00		90		4.6			6.87		90			6.87
7.01 to 14.00		92		5.9			11.79		27			11.55
14.01 to 19.00		85		8.2			15.96		13			16.88
19.01 to 20.00		105		9.1			19.86		1			19.17
20.01 to 22.00		40		7.7			20.62		16			20.62
22.01 to 29.63		101		7.5			22.43		33			22.13
$ 3.52 to $29.63		548		6.9		$	15.35		210		$	11.40

Restricted stock activity for the 2005 Plan was as follows:

	Outstanding Shares
	(in thousands)

Nonvested—September 30, 2012		215		$	16.02
Granted		107			20.98
Vested		(86	)		14.52
Forfeited		(10	)		16.75
Nonvested—September 30, 2013		226		$	18.92

In each of November 2012 and December 2011, the Compensation Committee established the performance goals for the award of performance-based RSUs for four executive officers, under the 2005 Plan. The RSUs earned, if any, under the November 2012 awards (the “2012 Awards”) will be based on the Company’s cumulative operating income, as reflected in the Company’s financial statements, from fiscal 2013 through fiscal 2015. The RSUs earned, if any, under the December 2011 awards (the “2011 Awards”)

13. EQUITY AWARD PLANS (Continued)

will be based on the Company’s cumulative operating income, as reflected in the Company’s financial statements, with respect to fiscal 2012 through fiscal 2014. The grant of any RSUs under these awards will generally be further contingent on the continued employment of the executive officers with the Company, through the date on which the shares in respect of these RSUs, if any, are issued following the end of the applicable performance periods, as well as the achievement of certain minimum levels of operating income in the final fiscal year of each applicable performance period. Any dividends declared on the shares of the Company’s common stock underlying the RSUs will be credited as additional RSUs based on the fair market value of the Company’s common stock on the dividend payment date. The additional RSUs, if any, will be earned on the same terms as the original RSUs. For the 2012 Awards, the executive officers will earn a cumulative total of 18,541 RSUs, excluding RSUs from dividends declared, if the Company’s cumulative operating income for fiscal 2013 through fiscal 2015 equals or exceeds a threshold of $109,582,000, and will ratably earn up to a maximum cumulative total of 55,621 RSUs, excluding RSUs from dividends declared, if the Company’s operating income during such performance period equals or exceeds $132,201,000. For the 2011 Awards, the executive officers will earn a cumulative total of 19,531 RSUs, excluding RSUs from dividends declared, if the Company’s cumulative operating income for fiscal 2012 through fiscal 2014 equals or exceeds a threshold of $120,000,000, and will ratably earn up to a maximum cumulative total of 58,590 RSUs, excluding RSUs from dividends declared, if the Company’s operating income during such performance period equals or exceeds $132,000,000.

As of September 30, 2013, $5,143,000 of total unrecognized compensation cost related to all non-vested equity awards is expected to be recognized over a weighted-average period of 1.3 years.

During fiscal 2013, 2012 and 2011, certain stock option exercises and vesting restricted stock awards were net-share settled by the Company such that the Company withheld shares of the Company’s common stock, which had a fair market value equivalent to the minimum statutory obligation for the applicable income and employment taxes for the awards, and the Company remitted the cash value to the appropriate taxing authorities. The total shares withheld in connection with tax obligations, which were 34,125, 30,849 and 128,646, respectively, during fiscal 2013, 2012 and 2011, are reflected as repurchase of common stock in the accompanying financial statements, and were based on the value of the Company’s common stock on the exercise or vesting date. The remaining shares, net of those withheld, were delivered to the award holders. Total payments for tax obligations to the tax authorities were $725,000, $597,000 and $2,786,000 for fiscal 2013, 2012 and 2011, respectively.