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EQUITY-BASED INCENTIVE AWARDS | 12 Months Ended
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Sep. 30, 2020
EQUITY-BASED INCENTIVE AWARDS |
EQUITY-BASED INCENTIVE AWARDS | 12. EQUITY-BASED INCENTIVE AWARDS: Omnibus Plans The Company has two equity-based incentive plans, the 2014 Omnibus Incentive Plan and 2018 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 135,000 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 2020, awards with respect to a total of 101,280 shares, net of forfeitures, had been awarded pursuant to the Omnibus Plans and awards with respect to another 33,720 shares may be awarded under the Omnibus Plans. Stock Options No incentive stock options awards were issued during fiscal 2020. The Company issued 5,450 incentive stock option awards to employees during fiscal 2019 pursuant to the provisions of the Company’s 2014 Omnibus Plan. These awards vest in equal installments over a five year service period. The fiscal 2019 incentive stock option awards had an estimated grant date fair value of approximately $0.2 million 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 2019 incentive stock option awards:
|  | Stock Option
|  | Pricing
|  | Assumptions
|  | 2019
Risk-free interest rate |  | 2.55 | %
Dividend yield |  | 0.8 | %
Expected volatility |  | 45.10 | %
Expected life in years |  | 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 2020, the Company had 34,350 stock options outstanding with a weighted average exercise price of $80.33 per share and 22,890 stock options which were exercisable with a weighted average exercise price of $72.67 per share. The following is a summary of stock option activity during fiscal 2020:
|  |  |  | Weighted
|  | Number |  | Average
|  | of |  | Exercise
|  | Shares |  | Price
Outstanding at September 2019 |  | 36,450 |  | $ | 78.67
Granted |  | — |  |  | —
Exercised |  | (2,100) |  |  | 51.50
Forfeited/Expired |  | — |  |  | —
Outstanding at September 2020 |  | 34,350 |  | $ | 80.33
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 2020 and fiscal 2019. At September 2020, 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 less than $0.1 million at September 2020 and $0.2 million at September 2019. The aggregate intrinsic value of stock options exercisable was less than $0.1 million and $0.2 million at September 2020 and September 2019, respectively. The total intrinsic value of stock options exercised was less than $0.1 million in both fiscal 2020 and fiscal 2019. The total fair value of stock options vested was $0.4 million during both fiscal 2020 and fiscal 2019. Restricted Stock Units At September 2020, 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 2015 |  |  | October 2017 |  |  | October 2018 |  |  | October 2019
Original number of awards issued: |  |  | 13,250 |  |  | 13,000 |  |  | 15,050 |  |  | 14,550
Service period: |  |  | 36 - 60 months |  |  | 36 months |  |  | 36 months |  |  | 36 months
Estimated fair value of award at grant date: |  | $ | 1,112,000 |  | $ | 1,177,000 |  | $ | 1,264,000 |  | $ | 1,007,000
Non-vested awards outstanding at September 30, 2020: |  |  | 50 |  |  | 4,334 |  |  | 10,037 |  |  | 14,550
Fair value of non-vested awards at September 30, 2020 of approximately: |  | $ | 3,000 |  | $ | 280,000 |  | $ | 648,000 |  | $ | 940,000
(1)13,200 of the restricted stock units were vested as of September 2020. The remaining 50 restricted stock units will vest in October 2020. (2)8,666 of the restricted stock units were vested as of September 2020. The remaining 4,334 restricted stock units will vest in October 2020. (3)5,013 of the restricted stock units were vested as of September 2020. 5,018 restricted stock units will vest in October 2020 and 5,019 will vest in October 2021. (4)The 14,550 restricted stock units will vest in equal amounts in October 2020, October 2021, and October 2022. 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 liability method under “ASC 718 – Compensation – Stock Compensation”. Net income before income taxes included compensation expense related to the amortization of the Company’s restricted stock unit awards of approximately $1.0 million and $1.2 million during fiscal 2020 and fiscal 2019, respectively. These amounts were recorded as accrued expenses in the Company’s Consolidated Balance Sheets at both September 2020 and September 2019. The tax benefit related to this compensation expense was approximately $0.2 million and $0.3 million in fiscal 2020 and fiscal 2019, respectively. The total intrinsic value of restricted stock units vested during fiscal 2020 and fiscal 2019 was approximately $0.9 million and $1.1 million, respectively. Total unamortized compensation expense for these awards based on the grant date fair value 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 2020:
|  | Number |  | Weighted
|  | of |  | Average
|  | Shares |  | Fair Value
Nonvested restricted stocks units at September 2019 |  | 28,151 |  | $ | 76.25
Granted |  | 14,550 |  |  | 69.20
Vested |  | (13,730) |  |  | 74.02
Expired |  | — |  |  | —
Nonvested restricted stocks units at September 2020 |  | 28,971 |  | $ | 64.59

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