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EQUITY-BASED INCENTIVE AWARDS | 12 Months Ended
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Sep. 30, 2018
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 2018, awards with respect to a total of 208,095 shares, net of forfeitures, had been awarded pursuant to the Omnibus Plans and awards with respect to another 5,068 shares may be awarded under the Omnibus Plans. Stock Options The Company issued 6,000 incentive stock options during both fiscal 2018 and fiscal 2017, 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 $0.2 million in fiscal 2018 and $0.1 million in fiscal 2017 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 2018 and fiscal 2017 incentive stock option awards:
|  | Stock Option |  | Stock Option
|  | Pricing |  | Pricing
|  | Assumptions |  | Assumptions
|  | 2018 |  | 2017
Risk-free interest rate |  | 2.41 | % |  | 2.12 | %
Dividend yield |  | 0.8 | % |  | 0.6 | %
Expected volatility |  | 33.00 | % |  | 22.40 | %
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 2018, the Company had 33,800 stock options outstanding with a weighted average exercise price of $77.85 per share and 17,300 stock options which were exercisable with a weighted average price of $68.04 per share. The following is a summary of stock option activity during fiscal 2018:
|  |  |  | Weighted |
|  | Number |  | Average |
|  | of |  | Exercise |
|  | Shares |  | Price |
Outstanding at September 2017 |  | 28,300 |  | $ | 74.75 |
Granted |  | 6,000 |  |  | 90.50 |
Exercised |  | (500) |  |  | 96.50 |
Forfeited/Expired |  | — |  |  | — |
Outstanding at September 2018 |  | 33,800 |  | $ | 77.85 |
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 2018 and fiscal 2017. At September 2018, 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 29 months. The aggregate intrinsic value of stock options outstanding was approximately $0.4 million at September 2018 and $0.5 million at September 2017. The aggregate intrinsic value of stock options exercisable was approximately $0.3 million and $0.4 million at September 2018 and September 2017, respectively. The total intrinsic value of stock options exercised was $0.1 million in both fiscal 2018 and fiscal 2017. The total fair value of stock options vested was $0.4 million during both fiscal 2018 and fiscal 2017. Restricted Stock Units At September 2018, 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) |  | Restricted Stock Units(4)
Date of award: |  |  | October 2013 |  |  | October 2015 |  |  | October 2016 |  |  | October 2017
Original number of awards issued: |  |  | 17,600 |  |  | 13,250 |  |  | 13,000 |  |  | 13,000
Service period: |  |  | 36 - 60 months |  |  | 36 - 60 months |  |  | 36 months |  |  | 36 months
Estimated fair value of award at grant date: |  | $ | 1,486,000 |  | $ | 1,112,000 |  | $ | 1,191,000 |  | $ | 1,177,000
Non-vested awards outstanding at September 30, 2018: |  |  | 660 |  |  | 4,484 |  |  | 8,667 |  |  | 13,000
Fair value of non-vested awards at September 30, 2018 of approximately: |  | $ | 57,000 |  | $ | 390,000 |  | $ | 754,000 |  | $ | 1,130,000
(1)16,940 restricted stock units were vested as of September 2018. The remaining 660 restricted stock units will vest in October 2018. (2)8,766 of the restricted stock units were vested as of September 2018. 4,334 of the restricted stock units will vest in October 2018. The remaining 150 restricted stock units will vest annually in October 2018 through October 2020. (3)4,333 of the restricted stock units were vested as of September 2018. The remaining 8,667 restricted stock units will vest in equal amounts in October 2018 and October 2019. (4)13,000 of the restricted stock units will vest in equal amounts in October 2018, October 2019, and 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 $1.2 million and $1.3 million during fiscal 2018 and fiscal 2017, respectively. These amounts were recorded as accrued expenses in the Company’s Consolidated Balance Sheet at both September 2018 and September 2017. The tax benefit related to this compensation expense was approximately $0.3 million in fiscal 2018 and $0.5 million in fiscal 2017. The total intrinsic value of restricted stock units vested during fiscal 2018 and fiscal 2017 was approximately $1.2 million and $1.3 million, respectively. Total unamortized compensation expense for these awards based on the September 2018 closing price was approximately $1.1 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 16 months (the weighted‑average period). The following summarizes restricted stock unit activity under the Omnibus Plans during fiscal 2018:
|  | Number |  | Weighted |
|  | of |  | Average |
|  | Shares |  | Fair Value |
Nonvested restricted stocks units at September 2017 |  | 27,521 |  | $ | 92.25 |
Granted |  | 13,000 |  |  | 90.50 |
Vested |  | (13,710) |  |  | 90.97 |
Expired |  | — |  |  | — |
Nonvested restricted stocks units at September 2018 |  | 26,811 |  | $ | 86.95 |

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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 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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