Natural Grocers by Vitamin Cottage, Inc. Stock Compensation Disclosure

13. Share-Based Compensation

 

The Company adopted the 2012 Omnibus Incentive Plan (as amended, the Plan) on July 17, 2012. Restricted stock unit awards granted pursuant to the Plan, if they vest, are settled in new shares of the Company’s common stock or shares of common stock held in treasury. At the adoption of the Plan, there were 1,090,151 shares of common stock available for issuance or delivery under the Plan. In March 2019, the Company’s stockholders approved a proposal to amend the Plan to: (i) increase the number of shares of common stock reserved for issuance thereunder by 600,000 shares and (ii) extend its term by five years. In March 2024, the Company’s stockholders approved a proposal to amend the Plan to: (i) increase the number of shares of common stock reserved for issuance thereunder by 600,000 shares and (ii) extend its term by five years. As of September 30, 2025, 452,390 shares of common stock remain available for grants under the Plan. The Plan provides for awards of options, stock appreciation rights, stock grants, restricted stock units, other share-based awards and cash-based incentive awards to officers, members of the Board, certain employees who are not named executive officers and consultants. As of September 30, 2025, restricted stock units had been granted under the Plan, at no out-of-pocket cost to officers, Board members and key employees. These restricted stock units generally vest, subject to requisite service requirements, annually in installments over a five-year period or in full following a three-year or five-year period. The award recipients are not entitled to cash dividends or to vote with regard to non-vested restricted stock units, and the units are subject to forfeiture during the vesting period. Restricted stock units are granted at the market price of the Company’s stock on the date of grant and are expensed on a straight-line basis over the vesting period.

 

The shares of non-vested restricted stock units as of September 30, 2025 and 2024 were as follows:

 

		Shares				Weighted average grant date fair value
Non-vested as of September 30, 2023			414,950			$	11.28
Granted			151,544				13.38
Forfeited			(20,392	)			11.65
Vested			(208,152	)			12.37
Non-vested as of September 30, 2024			337,950				12.19
Granted			331,896				28.85
Forfeited			(16,934	)			13.97
Vested			(97,858	)			17.83
Non-vested as of September 30, 2025			555,054				21.75

 

During the years ended September 30, 2025 and 2024, the Company accelerated the vesting of certain restricted stock units upon the retirement of the Company’s former Chief Financial Officer and for two grantees, making them fully vested, resulting in incremental share-based compensation expense of $0.5 million and $0.4 million, respectively.

 

In addition, during the year ended September 30, 2025, the Company awarded fully vested stock grants totaling 2,400 shares of the Company’s common stock to 24 employees who were not named executive officers.

 

Share-based compensation expense for restricted stock unit awards to certain employees who are not named executive officers was $2.0 million, $2.1 million and $0.9 million for the years ended September 30, 2025, 2024 and 2023, respectively. Share-based compensation expense for restricted stock unit awards to named executive officers was $1.7 million, $0.5 million and $0.3 million for the years ended September 30, 2025, 2024 and 2023, respectively.

 

Each independent member of the Board receives an annual grant of restricted stock units equal to $60,000 (based on the closing price of common stock on the New York Stock Exchange on the date of grant). Such grants are made each year on the date of the Company’s annual meeting of stockholders, or on a pro rata basis in the case of a mid-year appointment. Share-based compensation expense for the Company’s awards to its Board members was $0.2 million for each of the years ended September 30, 2025, 2024 and 2023.

 

The Company recorded total share-based compensation expense before income taxes of $4.0 million, $2.8 million and $1.4 million for the years ended September 30, 2025, 2024 and 2023, respectively. The share-based compensation expense is included in cost of goods sold and occupancy costs, store expenses or administrative expenses in the consolidated statements of income consistent with the manner in which the applicable officer, Board member or key employee’s compensation expense is presented. The Company realized a tax benefit from share-based compensation of $0.5 million, $0.6 million and less than $0.1 million for the years ended September 30, 2025, 2024 and 2023, respectively.

 

As of September 30, 2025, there was $7.5 million of unrecognized share-based compensation expense related to non-vested restricted stock units, net of estimated forfeitures, which the Company anticipates will be recognized over a weighted average period of approximately 2.3 years.