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EQUITY-BASED INCENTIVE AWARDS | 12 Months Ended
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Sep. 30, 2016
EQUITY-BASED INCENTIVE AWARDS |
EQUITY-BASED INCENTIVE AWARDS | 10. EQUITY-BASED INCENTIVE AWARDS: Omnibus Plan The Company has two equity-based incentive plans, the 2007 Omnibus Incentive Plan and 2014 Omnibus Incentive Plan (collectively “the Omnibus Plans”), which provide for equity incentives to employees. Each Omnibus Plan was designed with the intent of encouraging employees to acquire a vested interest in the growth and performance of the Company. The Omnibus Plans together permit the issuance of up to 225,000 shares of the Company’s common stock in the form of stock options, restricted stock awards, restricted stock units, performance share awards as well as awards such as stock appreciation rights, performance units, performance shares, bonus shares, and dividend share awards payable in the form of common stock or cash. The number of shares issuable under the Omnibus Plans is subject to customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. At September 2016, awards with respect to a total of 173,555 shares, net of forfeitures, had been awarded pursuant to the Omnibus Plans and awards with respect to another 51,445 shares may be awarded under the Omnibus Plans. Stock Options The Company issued 5,500 and 6,000 incentive stock options during fiscal 2016 and fiscal 2015, respectively, to various employees pursuant to the provisions of the Company’s 2014 Omnibus Plan. These awards vest in equal installments over a five year service period. The awards had an estimated fair value at the grant date of approximately $0.1 million in both fiscal years using the Black‑Scholes option pricing model. The following assumptions were used in connection with the Black‑Scholes option pricing calculation as it relates to the fiscal 2016 and fiscal 2015 incentive stock option awards:
|  | Stock Option |  | Stock Option
|  | Pricing |  | Pricing
|  | Assumptions |  | Assumptions
|  | 2016 |  | 2015
Risk-free interest rate |  | 1.98 | % |  | 1.93 | %
Dividend yield |  | 0.9 | % |  | 0.9 | %
Expected volatility |  | 24.30 | % |  | 22.70 | %
Expected life in years |  | 6 |  |  | 6 |
The stock options issued by the Company expire ten years from the grant date and include a five year graded vesting schedule. At September 2016, the Company had 22,800 stock options outstanding with a weighted average exercise price of $69.79 per share and 9,200 stock options which were exercisable with a weighted average price of $59.05 per share. The following is a summary of stock option activity during fiscal 2016:
|  |  |  | Weighted |
|  | Number |  | Average |
|  | of |  | Exercise |
|  | Shares |  | Price |
Outstanding at September 2015 |  | 21,100 |  | $ | 64.16 |
Granted |  | 5,500 |  |  | 83.90 |
Exercised |  | (3,800) |  |  | 58.95 |
Forfeited/Expired |  | — |  |  | — |
Outstanding at September 2016 |  | 22,800 |  | $ | 69.79 |
Net income before income taxes included compensation expense related to the amortization of the Company’s stock option awards of $0.1 million during both fiscal 2016 and fiscal 2015. At September 2016, total unamortized compensation expense related to stock options was approximately $0.2 million. This unamortized compensation expense is expected to be amortized over approximately the next 40 months. The aggregate intrinsic value of stock options outstanding was approximately $0.5 million and $0.3 million at September 2016 and September 2015, respectively. The aggregate intrinsic value of stock options exercisable was approximately $0.3 million and $0.2 million at September 2016 and September 2015, respectively. The total intrinsic value of stock options exercised was $0.1 million and $1.6 million in fiscal 2016 and fiscal 2015, respectively. The total fair value of stock options vested was $0.4 million during both fiscal 2016 and fiscal 2015. Restricted Stock Units At September 2016, the Compensation Committee of the Board of Directors had authorized and approved the following restricted stock unit awards to members of the Company’s management team pursuant to the provisions of the Company’s Omnibus Plans:
|  | Restricted Stock Units(1) |  | Restricted Stock Units(2) |  | Restricted Stock Units(3) |
Date of award: |  |  | October 2013 |  |  | October 2014 |  |  | October 2015 |
Original number of awards issued: |  |  | 17,600 |  |  | 13,000 |  |  | 13,250 |
Service period: |  |  | 36 - 60 months |  |  | 36 months |  |  | 36 - 60 months |
Estimated fair value of award at grant date: |  | $ | 1,486,000 |  | $ | 1,083,000 |  | $ | 1,112,000 |
Awards outstanding at September 30, 2016 |  |  | 6,649 |  |  | 8,668 |  |  | 13,250 |
Fair value of non-vested awards at September 30, 2016: |  | $ | 605,000 |  | $ | 788,000 |  | $ | 1,205,000 |
(1)10,951 restricted stock units were vested as of September 2016. 4,669 restricted stock units will vest in October 2016. The remaining 1,980 restricted stock units will vest in equal amounts in October 2016, October 2017, and October 2018. (2)4,332 of the restricted stock units were vested as of September 2016. The remaining 8,668 restricted stock units will vest in equal amounts in October 2016, and October 2017. (3)13,000 of the restricted stock units will vest in equal amounts in October 2016, October 2017, and October 2018. The remaining 250 restricted stock units will vest annually in October 2016 through October 2020. There is no direct cost to the recipients of the restricted stock units, except for any applicable taxes. The recipients of the restricted stock units are entitled to the customary adjustments in the event of stock splits, stock dividends, and certain other distributions on the Company’s common stock. All cash dividends and/or distributions payable to restricted stock recipients will be held in escrow until all the conditions of vesting have been met. The restricted stock units provide that the recipients can elect, at their option, to receive either common stock in the Company, or a cash settlement based upon the closing price of the Company’s shares, at the time of vesting. Based on these award provisions, the compensation expense recorded in the Company’s Statement of Operations reflects the straight‑line amortized fair value based on the period end closing price under the liability method. Net income before income taxes included compensation expense related to the amortization of the Company’s restricted stock unit awards of approximately $1.3 million and $1.2 million during fiscal 2016 and fiscal 2015, respectively. The tax benefit related to this compensation expense was approximately $0.5 million in both fiscal 2016 and 2015, respectively. The total intrinsic value of restricted stock units vested was approximately $1.3 million during both fiscal 2016 and fiscal 2015. Total unamortized compensation expense for these awards based on the September 2016 closing price was approximately $1.3 million. This unamortized compensation expense, plus any changes in the fair value of the awards through the settlement date, are expected to be amortized over approximately the next 17 months (the weighted‑average period). The following summarizes restricted stock unit activity under the Omnibus Plans during fiscal 2016:
|  | Number |  | Weighted |
|  | of |  | Average |
|  | Shares |  | Fair Value |
Nonvested restricted stock units at September 30, 2015 |  | 29,977 |  | $ | 80.00 |
Granted |  | 13,250 |  | $ | 83.90 |
Vested |  | (14,660) |  | $ | 83.95 |
Expired |  | — |  |  | — |
Nonvested restricted stock units at September 30, 2016 |  | 28,567 |  | $ | 90.96 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=65895303&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=68057994&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14) -URI http://asc.fasb.org/extlink&oid=27013229&loc=d3e301413-122809 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 + Details
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