Quarterly report pursuant to Section 13 or 15(d)

Share Based Payments

 v2.3.0.11
Share Based Payments
 9 Months Ended
Jun. 30, 2011
Share Based Payments [Abstract]  
Share Based Payments
Note 6.   Share-Based Payments

The Company maintains an equity incentive plan (the “2007 Equity Incentive Plan”) that provides for the grants of stock options, restricted shares, stock-based performance units and certain other types of stock-based awards. Under the 2007 Equity Incentive Plan, which has a ten-year term, the maximum number of shares available for grants or awards is an aggregate of 2,200,000.  The Company also maintains a stock incentive plan (the “1992 Incentive Stock Plan”) that previously provided for grants of stock options, restricted shares and certain other types of stock-based awards.  There will be no further grants under the 1992 Incentive Stock Plan.  At June 30, 2011, there were 1,134,844 shares reserved for future issuance under the 2007 Equity Incentive Plan. Both plans are administered by the Compensation Committee of the Board of Directors.

The option price for each stock option granted under either plan may not be less than the fair market value of the Company's common stock on the date of grant.  Outstanding stock options are generally exercisable in one-third increments upon the attainment of 10%, 33% and 60% appreciation in the market value of the Company's Class A Common Stock.  In addition, options generally vest in one-third increments after three, four and five years, respectively, from the grant date (but, in any event, not until the attainment of the market value thresholds).  The options expire on the earlier of ten years from the date of grant, upon employment termination, or within specified time limits following voluntary employment termination (with the consent of the Company), retirement or death.  The Company generally settles employee stock option exercises with treasury shares.  With respect to outstanding restricted share grants, generally one-half of the shares vest on the third anniversary of the grant.  For shares granted prior to fiscal 2011, the remaining one-half of the shares vest in one-third increments upon attainment of 10%, 25% and 40% appreciation in the market value of the Company's Class A Common Stock. For shares granted in fiscal 2011, the remaining one-half of the shares vest in one-third increments upon attainment of 5%, 15% and 25% appreciation in the market value of the Company's Class A Common Stock.  Additionally, beginning in fiscal 2009, restricted shares cannot vest until the first anniversary of the grant date.  Unvested restricted shares generally expire on the earlier of five years from the date of grant, upon employment termination, or within specified time limits following voluntary employment termination (with the consent of the Company), retirement or death.  The Company issues restricted shares from treasury shares.

For the three-month periods ended June 30, 2011 and 2010, total stock-based compensation cost totaled $1,693 and $1,633, respectively.  For the nine-month periods ended June 30, 2011 and 2010, total stock-based compensation cost totaled $5,301 and $4,926, respectively.  The associated future income tax benefit recognized was $660 and $636 for the three-month periods ended June 30, 2011 and 2010, respectively, and $2,067 and $1,921 for the nine-month periods ended June 30, 2011 and 2010, respectively.
 
For the three-month periods ended June 30, 2011 and 2010, the amount of cash received from the exercise of stock options was $1,079 and $23, respectively. For the nine-month periods ended June 30, 2011 and 2010, the amount of cash received from the exercise of stock options was $1,570 and $749, respectively. In connection with these exercises, the tax benefits realized by the Company were $421 and $8 for the three-month periods ended June 30, 2011 and 2010, respectively, and $612 and $159 for the nine-month periods ended June 30, 2011 and 2010, respectively.

Changes to restricted stock for the nine months ended June 30, 2011 were as follows:

         
Weighted-
  
         
average
  
         
grant-date
  
   
Shares
    
fair value
  
Non-vested at September 30, 2010
     437,442     $ 36.06  
Granted
     199,960       30.79  
Vested
     (58,030 )      38.42  
Expired or forfeited
     (1,173 )      34.72  
Non-vested at June 30, 2011
     578,199       34.00  

As of June 30, 2011, the total unrecognized compensation cost related to unvested restricted stock was $5,104 and is expected to be recognized over a weighted average period of 1.5 years.

The transactions for shares under options for the nine months ended June 30, 2011 were as follows:

               
Weighted-
        
         
Weighted-
    
average
    
Aggregate
  
         
average
    
remaining
    
intrinsic
  
   
Shares
    
exercise price
    
contractual term
    
value
  
Outstanding, September 30, 2010
     953,326     $ 36.32              
Granted
     -       -              
Exercised
     (60,299 )     26.03              
Expired or forfeited
     (13,914 )     36.77              
Outstanding, June 30, 2011
     879,113       37.02       4.3     $ 2,770  
Exercisable, June 30, 2011
     518,927       35.74       3.9     $ 2,298  

No shares were earned during the three-month and nine-month periods ended June 30, 2011. No shares were earned during the three-month period ended June 30, 2010.  The fair value of shares earned during the nine-month period ended June 30, 2010 was $3,120.  The intrinsic value of options (which is the amount by which the stock price exceeded the exercise price of the options on the date of exercise) exercised during the nine-month periods ended June 30, 2011 and 2010 was $721 and $479, respectively.
 
The transactions for non-vested options for the nine months ended June 30, 2011 were as follows:

         
Weighted-average
  
         
grant-date
  
Non-vested shares:
  
Shares
    
fair value
  
Non-vested at September 30, 2010
     366,179     $ 13.54  
Granted
     -       -  
Vested
     -       -  
Expired or forfeited
     (5,993 )     11.20  
Non-vested at June 30, 2011
     360,186       13.58  

As of June 30, 2011, the total unrecognized compensation cost related to non-vested stock options was approximately $88. This cost is expected to be recognized over a weighted-average period of 0.4 years in accordance with the vesting periods of the options.

The fair value of each restricted stock grant is estimated on the date of grant using a binomial lattice valuation model.  The following table indicates the assumptions used in estimating fair value of restricted stock for the nine months ended June 30, 2011 and 2010.

   
Nine Months Ended June 30,
  
   
2011
    
2010
  
Expected volatility
     30.0 %     30.0 %
Dividend yield
     1.0 %     .8 %
Average risk free interest rate
     1.2 %     2.3 %
Average expected term (years)
     2.0       2.2  


The risk free interest rate is based on United States Treasury yields at the date of grant. The dividend yield is based on the most recent dividend payment and average stock price over the 12 months prior to the grant date.  Expected volatilities are based on the historical volatility of the Company's stock price.  The expected term represents an estimate of the average period of time for restricted shares to vest.  The option characteristics for each grant are considered separately for valuation purposes.

Under the Company's Director Fee Plan, directors (except for the Chairman of the Board) who are not also officers of the Company each receive, as an annual retainer fee, either cash or shares of the Company's Class A Common Stock equivalent to $60.  The equivalent amount paid to a non-employee Chairman of the Board is $130. Where the annual retainer fee is provided in shares, each director may elect to be paid these shares on a current basis or have such shares credited to a deferred stock account as phantom stock, with such shares to be paid to the director subsequent to leaving the Board.  The value of deferred shares is recorded in other liabilities.  A total of 14,794 shares had been deferred under the Director Fee Plan at June 30, 2011.  Additionally, directors who are not also officers of the Company each receive an annual stock-based grant (non-statutory stock options, stock appreciation rights and/or restricted shares) with a value of $80.  A total of 22,300 stock options have been granted under the plan.  At June 30, 2011, 17,800 options were outstanding and vested. Additionally, 64,923 shares of restricted stock have been granted under the plan, 23,623 of which were unvested at June 30, 2011.  A total of 300,000 shares have been authorized to be issued under the Director Fee Plan.