Stock-Based Compensation

3 Months Ended

Dec. 31, 2013

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

Stock-Based Compensation

Stock-Based Compensation

The Company may issue stock options and restricted stock which vest upon the satisfaction of a performance condition and/or a service condition. In addition, the Company issues shares pursuant to an employee stock purchase plan.

The following table reflects stock-based compensation expense recorded during the three months ended December 31, 2013 and 2012 (in thousands):

	Three months ended December 31,
	2013		2012
Restricted stock	$	2,641	$	2,384
Employee stock purchase plan	113		127
	$	2,754	$	2,511

The fair value per share of restricted stock is equal to the quoted price of the Company’s common stock on the date of grant, net of estimated forfeitures. The expense related to these awards is being recorded ratably over the vesting period. In addition, for stock-based awards where vesting is dependent upon achieving certain operating performance goals, the Company estimates the likelihood of achieving the performance goals.

During the three months ended December 31, 2013, the Company granted 1,332,000 shares of restricted stock to members of senior management of which 523,875 shares vest over the service period. The vesting of the remaining 808,125 shares will vary based on the achievement of certain financial performance goals which will be measured at the end of fiscal year 2014, and a continuing required service period. Total compensation expense on both of these awards is a maximum of $20.2 million, net of cancellations. Changes to the projected attainment against performance targets during fiscal 2014 may result in an adjustment to the amount of cumulative compensation recorded as of the date the estimate is revised.

During the three months ended December 31, 2012, the Company granted 1,183,500 shares of restricted stock to members of senior management of which 524,250 shares vest over a required service period. The vesting of the remaining 659,250 shares vary based on he achievement of certain financial performance goals which were measured at the end of fiscal year 2013, and a continuing required service period. Based on the Company’s results for fiscal 2013 relative to the financial performance goals established in the grant, 448,290 shares were earned. These awards will vest over the remaining service period. Total compensation expense on the awards granted during the three months ended December 31, 2012 is a maximum of $7.4 million, net of cancellations. However, the final compensation expense related to these awards is dependent on the award holders completing the remaining service period.

Stock Option Activity

The following table summarizes stock option activity for the three months ended December 31, 2013:

	Number of Options	Weighted- Average Remaining Contractual Term	Weighted Average Exercise Price		Aggregate Intrinsic Value (In Thousands)
Outstanding at September 30, 2013	15,540		$	15.86
Outstanding at December 31, 2013	15,540	0.6 years	$	15.86	$	—
Vested at December 31, 2013	15,540	0.6 years	$	15.86	$	—
Options exercisable at December 31, 2013	15,540	0.6 years	$	15.86	$	—

Based on the Company’s closing stock price of $10.49 as of December 31, 2013, there was no intrinsic value to the option holders.

No stock options were granted during the three months ended December 31, 2013 or 2012. There were no stock option exercises in the three months ended December 31, 2013 or 2012.

As of December 31, 2013, there was no future compensation cost related to stock options as all outstanding stock options have vested.

Restricted Stock Activity

The following table summarizes restricted stock activity for the three months ended December 31, 2013:

	Shares		Weighted Average Grant-Date Fair Value
Outstanding at September 30, 2013	2,915,413		$	11.25
Awards granted	1,332,000		9.45
Awards vested	(339,639	)	9.08
Awards canceled	(354,766	)	10.38
Outstanding at December 31, 2013	3,553,008		$	10.87

The fair value of restricted stock awards vested during the three months ended December 31, 2013 and 2012 was $3.1 million and $2.9 million, respectively.

As of December 31, 2013, the unrecognized compensation cost related to restricted stock that is expected to vest is $18.5 million and will be recognized over an estimated weighted average service period of 1.9 years.

Employee Stock Purchase Plan

There were no shares purchased under the employee stock purchase plan during the three months ended December 31, 2013 and 2012.