EQUITY-BASED INCENTIVE AWARDS

12 Months Ended

Sep. 30, 2023

EQUITY-BASED INCENTIVE AWARDS

EQUITY-BASED INCENTIVE AWARDS

12. EQUITY-BASED INCENTIVE AWARDS:

Omnibus Plans

The Company has three equity-based incentive plans, the 2014 Omnibus Incentive Plan, the 2018 Omnibus Incentive Plan, and the 2022 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 195,000 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 2023, awards with respect to a total of 125,998 shares, net of forfeitures, had been awarded pursuant to the Omnibus Plans and awards with respect to another 69,002 shares may be awarded under the Omnibus Plans.

Restricted Stock Units

At September 2023, 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)
Date of award:		October 2020
Original number of awards issued:		20,500
Service period:		36 months
Estimated fair value of award at grant date:	$	1,415,000
Non-vested awards outstanding at September 2023:		6,834
Fair value of non-vested awards at September 2023 of approximately:	$	1,408,000

(1) 13,666 of the restricted stock units were vested as of September 2023. The remaining 6,834 restricted stock units will vest in October 2023.

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”.

Income from operations before income taxes included compensation expense related to the amortization of the Company’s restricted stock unit awards of approximately $1.1 million during fiscal 2023 and $2.3 million during fiscal 2022. These amounts were recorded as accrued expenses in the Company’s Consolidated Balance Sheets at both September 2023 and September 2022. The tax benefit related to this compensation expense was approximately $0.3 million in fiscal 2023 and $0.6 million in fiscal 2022. The total intrinsic value of restricted stock units vested during fiscal 2023 and fiscal 2022 was approximately $2.4 million and $3.5 million, respectively.

At September 2023, there was no unamortized compensation expense for these awards based on the grant date fair value.

The following summarizes restricted stock unit activity under the Omnibus Plans during fiscal 2023:

	Number	Weighted
	of	Average
	Shares	Fair Value
Nonvested restricted stock units at September 2022	18,519	$	210.00
Granted	—		—
Vested	(11,685)		181.92
Expired	—		—
Nonvested restricted stock units at September 2023	6,834	$	206.00

Restricted Stock Awards

At September 2023, the Compensation Committee of the Board of Directors had authorized and approved the following restricted stock awards to members of the Company’s management team pursuant to the provisions of the Company’s Omnibus Plans:

	Restricted  Stock Awards (1)		Restricted  Stock Awards (2)
Date of award:		October 2021		October 2022
Original number of awards issued:		15,100		15,100
Service period:		36 months		36 months
Estimated fair value of award at grant date:	$	2,089,000		2,824,000
Non-vested awards outstanding at September 2023:		10,067		15,100
Fair value of non-vested awards at September 2023 of approximately:	$	2,074,000		3,111,000

(1) 5,033 of the restricted stock awards were vested as of September 2023. 5,033 restricted stock awards will vest in October 2023 and 5,034 will vest in October 2024.

(2) The 15,100 restricted stock awards will vest in equal amounts in October 2023, October 2024 and October 2025.

There is no direct cost to the recipients of the restricted stock awards, except for any applicable taxes. The restricted stock awards provide that the recipients receive common stock in the Company, subject to certain restrictions until such time as the awards vest. The recipients of the restricted stock awards 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 compensation expense recorded in the Company’s Statement of Operations reflects the straight-line amortized fair value.

The following summarizes restricted stock award activity under the Omnibus Plans during fiscal 2023:

	Number	Weighted
	of	Average
	Shares	Fair Value
Nonvested restricted stock awards at September 2022	15,100	$	210.00
Granted	15,100		187.02
Vested	(5,033)		186.26
Expired	—		—
Nonvested restricted stock awards at September 2023	25,167	$	206.00

Income from operations before income taxes included compensation expense related to the amortization of the Company’s restricted stock awards of approximately $1.6 million during fiscal 2023 and $0.7 million during fiscal 2022. The tax benefit related to this compensation expense was approximately $0.4 million in fiscal 2023 and $0.2 million in fiscal 2022. At September 2023, total unamortized compensation expense related to restricted stock awards was approximately $2.6 million. This unamortized compensation expense is expected to be amortized over approximately the next 16 months.