NOTE 10—COMPANY-OWNED LIFE INSURANCE POLICIES
During the year ended September 30, 2013, company-owned life insurance policies terminated upon the death of the insured, the Company’s founder and former Chairman. As a result, the Company recognized a $3,993 non-taxable gain representing the difference between the death benefit and the cash surrender value of the policies. The resulting gain was recorded as a component of nonoperating income in the accompanying consolidated statements of operations, and served to reduce the Company’s effective tax rate for the year ended September 30, 2013. The Company received total proceeds of $18,102 from the policies during the year ended September 30, 2013.