Equity-based Compensation |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity-based Compensation |
Equity-Based Compensation
Restricted Stock Awards
On February 23, 2018, the Company sold to certain employees a total of 126,000 restricted shares of common stock at a purchase price of $0.04 per share. The Company recorded proceeds of $5,000 from the sale of these restricted shares, which were issued from treasury shares. The Company recorded a reduction to additional paid-in capital of approximately $0.5 million representing the cost of treasury shares issued in excess of the purchase price paid by the employees.
Half of the shares vested immediately on February 23, 2018, and the remaining half of the shares vested on July 1, 2018, upon the respective employees' continuous employment through the vesting date. The grant date fair value of the shares was estimated to be $7.78 per share.
During the fiscal year ended September 30, 2018, the Company recorded compensation expense in connection with these grants in the amount of $1.0 million, which is reflected as general and administrative expenses on the Company’s Consolidated Statements of Income. At September 30, 2018, there was no unrecognized compensation expense related to these awards.
2017 Options
On March 7, 2017, the Company granted to a certain employee a non-plan option to purchase 74,592 shares of the Company’s common stock at an exercise price of approximately $0.04 per share. The option has an expiration date of March 7, 2027. The options are classified as equity awards. The grant date fair value was $5.52 per share, calculated using the Black-Scholes option pricing model applied to the following inputs.
The option vested 100% at the date of grant and is exercisable only during a change in control event as defined by the award, which has not occurred. Unrecognized compensation expense in connection with this option at September 30, 2018 was $0.4 million. At September 30, 2018, all 74,592 options were outstanding and vested. No portion of this option was exercisable or had intrinsic value at September 30, 2018 because a change of control event had not occurred through that date.
2016 Equity Incentive Plan
On August 22, 2016, the Company granted to certain employees options to purchase 252,000 shares of the Company’s common stock with an exercise price of $3.37 per share and an expiration date of August 22, 2026 pursuant to the Company's 2016 Equity Incentive Plan (the "2016 Equity Incentive Plan").
The options are classified as equity awards and do not contain performance conditions or market conditions. The grant date fair value was $2.90 per share, calculated using the Black-Scholes option pricing model applied to the following inputs:
On May 8, 2017, all agreements evidencing options granted under the 2016 Equity Incentive Plan were modified to immediately vest all remaining unvested options outstanding. Accordingly, all remaining unrecognized compensation expense was recognized during that period. Total compensation expense recorded during the fiscal year ended September 30, 2017 in connection with these options was $0.5 million and there was no unrecognized compensation expense related to these options at September 30, 2017. Accordingly, there was no compensation expense incurred in connection with these options during the fiscal year ended September 30, 2018, and there was no unrecognized compensation expense at September 30, 2018.
The following is a summary of changes to the number of unvested options under the 2016 Equity Incentive Plan during the fiscal years ended September 30, 2017 and September 30, 2018:
The intrinsic value of options exercised during the fiscal year ended September 30, 2017 was $0.4 million. No options were outstanding under the 2016 Equity Incentive Plan at September 30, 2018 or September 30, 2017.
The following is a summary of activity related to options under the 2016 Equity Incentive Plan during the fiscal years ended September 30, 2018 and September 30, 2017:
The Company received proceeds of $0.6 million from option holders upon exercises during the fiscal year ended September 30, 2017. Shares were issued from treasury shares.
2010 Non-Plan Stock Option Agreement
In June 2018, certain employees of the Company exercised options to purchase 768,984 shares of Class B common stock at an exercise price of $5.70 per share. These options were granted in 2010 pursuant to a non-plan option agreement and were classified as equity awards. These shares were issued from treasury shares at an average cost of approximately $3.64 per share. The transaction was executed as a cashless exercise through which the Company concurrently repurchased from the option holders the number of shares of Class B common stock required to fund the exercise price for all options and meet statutory federal, state and payroll tax withholding requirements applicable to the employees associated with their exercises. The Company purchased a total of 521,902 shares of Class B common stock, at the $13.17 per share closing price of the Company’s Class A common stock on the date of exercise, resulting in a net increase of 247,082 shares of Class B common stock outstanding. Of the aggregate repurchase price, the Company retained $4.4 million which was recorded to additional paid-in capital reflecting the total exercise price, and withheld $2.5 million which was submitted to taxing authorities for employees’ payroll tax obligations.
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