Shareholders' Equity and Stock-Based Compensation

12 Months Ended

Sep. 30, 2020

Shareholders' Equity and Stock-Based Compensation

NOTE 11 - SHAREHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Shareholders’ Equity

Under the Company’s Certificate of Incorporation, as amended, certain rights of the holders of the Company’s common stock are modified by shares of Class B stock for as long as such shares shall remain outstanding. During that period, holders of common stock will have the right to elect approximately 25% of the Company’s Board of Directors, and conversely, holders of Class B stock will be entitled to elect approximately 75%

of the Company’s Board of Directors. During the period when shares of common stock and Class B stock are outstanding, certain matters submitted to a vote of shareholders will also require approval of the holders of common stock and Class B stock, each voting separately as a class. Common stock and Class B shareholders have equal rights with respect to dividends, preferences, and rights, including rights in liquidation.

Stock-Based Compensation

On March 17, 2009, the shareholders of the Company approved the 2009 Incentive Compensation Plan (the “2009 Plan”). The 2009 Plan provides that the total number of shares of Company stock that may be subject to the granting of awards under the 2009 Plan (“Awards”)

equals

800,000 shares of common stock and 160,000 shares of Class B stock

, subject to adjustment pursuant to the terms of

the 2009 Plan. Persons eligible to receive Awards under the 2009 Plan include employees, directors, consultants and other persons who provide services to the Company. The 2009 Plan imposes individual limitations on the amount of certain Awards, in part, to comply with Internal Revenue Code, Section 162(m).

As of September 30, 2020

and 2019

, all outstanding common stock options

issued under the 2009 Plan

had been fully vested. These options amounted to 177,492 at September 30, 2020. As long as the

employees remain

employed by the Company, these options are exercisable through October 1, 2021.

As of September 30, 2020

and 2019

, 45,000 outstanding Class B stock options

issued under the 2009 Plan

were fully vested and are exercisable through October 1, 2021 as long as the employee remains employed by the Company. In addition, 30,000 outstanding Class B stock options

issued under the 2009 Plan

were fully vested

at September 30, 2020, and were 75% vested as of September 30, 2019,

and are exercisable through September 26, 2026 as long as the employee remains employed by the Company.

As of September 30, 2020,

options

are available for granting of Awards under the 2009 Plan.

following table summarizes option activity under the

2009

Plan:


	Number of Shares			Average Exercise Price Per Share
Options outstanding at September 30, 2018		317,492		$	5.984
Options exercised during fiscal 2019		(45,000	)	$	5.126

Options outstanding at September 30, 2019		272,492		$	6.126
Options exercised during fiscal 2020		(20,000	)	$	5.126

Options outstanding at September 30, 2020		252,492		$	6.205

options were granted, forfeited or cancelled during the years ended September 30, 2020 or September 30, 2019. The weighted average remaining contractual life on the options outstanding as of September 30, 2020 is

1.6 years under the 2009 Plan.