Stockholders' Equity

12 Months Ended

Sep. 30, 2020

12. STOCKHOLDERS’ EQUITY

Equity Incentive Plan

The Company’s 2006 Equity Incentive Plan, as amended and restated (the “Equity Incentive Plan”), provides for grants of stock options as well as grants of stock, including restricted stock. Approximately 3.0 million shares of common stock are authorized for issuance under the Equity Incentive Plan, of which approximately 928,669 shares were available for issuance at September 30, 2020.

Stock Repurchase Program

In 2015, our Board of Directors authorized a stock repurchase program for the purchase from time to time of up to 1.5 million shares of the Company’s common stock, and on May 2, 2019, authorized the repurchase from time to time of up to an additional 1.0 million shares of our common stock under the stock repurchase program. Share purchases are made for cash in open market transactions at prevailing market prices or in privately negotiated transactions or otherwise. The timing and amount of purchases under the program are determined based upon prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. All or part of the repurchases may be implemented under a Rule 10b5-1 trading plan, which allows repurchases under pre-set terms at times when the Company might otherwise be prevented from purchasing under insider trading laws or because of self-imposed blackout periods. The program does not require the Company to purchase any specific number of shares and may be modified, suspended or reinstated at any time at the Company’s discretion and without notice.

We repurchased 263,160 shares of our common stock during the year ended September 30, 2020, in open market transactions at an average price of $23.29 per share.

We repurchased 467,819 shares of our common stock during the year ended September 30, 2019, in open market transactions at an average price of $17.34 per share.

Treasury Stock

During the year ended September 30, 2020, we issued 113,408 shares of common stock from treasury and repurchased 56,806 shares of common stock from our employees to satisfy statutory tax withholding requirements upon the vesting of certain performance phantom stock units under the Equity Incentive Plan. We also repurchased 263,160 shares of common stock on the open market pursuant to our stock repurchase program, and 208,597 shares were forfeited by former employees and returned to treasury stock. During the year ended September 30, 2020, we issued 6,789 unrestricted shares of common stock from treasury to members of our Board of Directors as part of their overall compensation and 5,750 unrestricted shares to satisfy the exercise of outstanding options.

During the year ended September 30, 2019, we issued 216,679 shares of common stock from treasury and repurchased 97,003 shares of common stock from our employees to satisfy statutory tax withholding requirements upon the vesting of certain performance phantom stock units under the Equity Incentive Plan. We also repurchased 467,819 shares of common stock on the open market pursuant to our stock repurchase program. During the year ended September 30, 2019, we issued 1,923 unrestricted shares of common stock from treasury to members of our Board of Directors as part of their overall compensation and 22,500 unrestricted shares to satisfy the exercise of outstanding options. We also issued 283,195 shares out of treasury for restricted shares granted upon the appointment of the Company’s former Chief Executive Officer in March 2019.

Restricted Stock

During the years ended September 30, 2020, 2019, and 2018, we recognized $2,441, $776, and $256, respectively, in compensation expense related to our restricted stock awards. During the year ended September 30, 2020, $1,100 of the compensation expense was settled with cash. At September 30, 2020, the unamortized compensation cost related to outstanding unvested restricted stock was $312. A summary of restricted stock awards for the years ended September 30, 2020, 2019, and 2018 is provided in the table below:


	Year Ended September 30,
	2020	2019	2018
Unvested at beginning of year	283,195	—	140,668
Granted	69,338	283,195	—
Vested	(105,000)	—	(140,668)
Forfeited	(208,597)	—	—
Unvested at end of year	38,936	283,195	—

The fair value of shares vesting during the years ended September 30, 2020, 2019, and 2018 was $2,984, zero and $2,201, respectively. Fair value was calculated as the number of shares vested times the market price of shares on the date of vesting. The weighted average grant date fair value of unvested restricted stock at September 30, 2020 was $23.57.

All the restricted shares granted under the Equity Incentive Plan (vested or unvested) participate in dividends issued to common shareholders, if any.

Director Phantom Stock Units

Director phantom stock units (“Director PSUs”) are primarily granted to the members of the Board of Directors as part of their overall compensation. These Director PSUs are contractual rights to receive one share of the Company's common stock and are paid via unrestricted stock grants to each director upon their departure from the Board of Directors. We record compensation expense for the full value of the grant on the date of grant. For the years ended September 30, 2020, 2019, and 2018, we recognized $390, $300, and $189, respectively, in compensation expense related to these grants.

Employee Phantom Stock Units

An employee phantom stock unit (an “Employee PSU”) is a contractual right to receive one share of the Company’s common stock. Depending on the terms of each grant, Employee PSUs may vest upon the achievement of certain specified performance objectives and continued performance of services, or may vest based on continued performance of services through the vesting date.

As of September 30, 2019, the Company had outstanding Employee PSUs, which, subject to the achievement of certain performance metrics, could have resulted in the issuance of 162,840 shares of common stock. During the year ended September 30, 2020, 3,435

Employee PSUs were forfeited and 45,686 vested, and the Company granted additional Employee PSUs, which, subject to the achievement of certain performance metrics, could result in the issuance of 90,782 shares of common stock. As of September 30, 2020, a maximum of 204,501 shares of common stock may be issued under outstanding Employee PSUs.

During the year ended September 30, 2020 and 2019, we recognized compensation expense of $1,443 and $1,151, respectively, related to Employee PSUs. The vesting of these awards is subject to either the achievement of specified levels of cumulative net income before taxes or specified stock price levels and continued performance of services through mid-December 2021 and 2022, or based on continued performance through the vesting date alone. At September 30, 2020, it is deemed probable that of a portion of the awards which vest based on performance conditions will vest.

Stock Options

We did not issue stock options during the years ended September 30, 2020, 2019 and 2018.

The following table summarizes activity relating to options granted in the years ended September 30, 2013 and 2015.


	Shares	Weighted Average Exercise Price
Outstanding, September 30, 2017	45,750	$	6.42
Options granted	—	—
Exercised	1,500	7.21
Forfeited and canceled	—	—
Outstanding, September 30, 2018	44,250	$	6.39
Options granted	—	—
Exercised	22,500	6.43
Forfeited and canceled	—	—
Outstanding, September 30, 2019	21,750	$	6.35
Options granted	—	—
Exercised	5,750	5.95
Forfeited and canceled	—	—
Outstanding, September 30, 2020	16,000	$	6.49

The following table summarizes options outstanding and exercisable at September 30, 2020:


Outstanding and Exercisable as of September 30, 2020	Remaining Contractual Life in Years	Weighted-Average Exercise Price
8,000	2.58	$5.76
1,000	4.29	$7.27
7,000	4.34	$7.21
16,000		$6.49

Our 2013 and 2015 options cliff vested at the end of a two year period ending at the anniversary date of the grant. All options expire ten years from the grant date if they are not exercised. Upon exercise of stock options, it is our policy to first issue shares from treasury, then issue new shares. Unexercised stock options expire May 2023, January 2025 and February 2025.

During the years ended September 30, 2020, 2019, and 2018, we recognized zero in compensation expense related to our stock option awards.

The intrinsic value of stock options outstanding and exercisable was $405 and $254 at September 30, 2020, and 2019, respectively. The intrinsic value is calculated as the difference between the fair value as of the end of the period and the exercise price of the stock options.