The Company recorded and of compensation expense related to current and past option grants, restricted stock grants and the Company’s Employee Stock Purchase Plan (“ESPP”) for the and months ended respectively. For the months ended of this expense is included in selling, general and administrative expense, and is included in cost of sales. For the months ended of this expense is included in selling, general and administrative expense, and is included in cost of sales. The Company recorded and of compensation expense related to current and past option grants, restricted stock grants and ESPP for the and months ended respectively. For the months ended of this expense is included in selling, general and administrative expense, and is included in cost of sales. For the months ended of this expense is included in selling, general and administrative expense, and is included in cost of sales. As of of total unrecognized compensation expense related to non-vested restricted stock awards and stock options is expected to be recognized over a period of approximately years.

 

The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted. During the months ended the Company granted employees non-qualified stock options to purchase an aggregate of shares of common stock with a contractual term of years, a year vesting term, and an exercise price of During the months ended the Company granted employees non-qualified stock options to purchase an aggregate of shares of common stock with a contractual term of years, a year vesting term, and an exercise price of The fair value at the grant date for options issued during the months ended was

 

This fair value was estimated at the grant date using the assumptions listed below:

 

		Nine months ended June 30, 2019
Dividend yield			0	%
Average expected volatility			37.77	%
Average risk-free interest rate			2.92	%
Expected life (years)			3
Vesting period (years)			3

 

The expected stock price volatility is based on the historical volatility of the Company’s stock for a period approximating the expected life. The expected life represents the period of time that options are expected to be outstanding after their grant date. The risk-free interest rate reflects the interest rate at grant date on -coupon U.S. governmental bonds having a remaining life similar to the expected option term.

 

Options are granted at fair market values determined on the date of grant and vesting normally occurs over a to -year period. However, options granted to directors have a year vesting period and a -year contractual term. The maximum contractual term is normally years. Shares issued upon exercise of a stock option are issued from the Company’s authorized but unissued shares.

 

The following is a summary of stock option activity during the months ended

 

		Number of options				Weighted average exercise price
Outstanding at September 30, 2018			138,500			$	10.99
Granted			172,000				12.17
Exercised			(6,750	)			2.58
Cancelled or Forfeited			(12,000	)			12.17
Outstanding at June 30, 2019			291,750			$	11.83

 

The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. As of the weighted average remaining contractual term for all outstanding stock options was years and their aggregate intrinsic value was During the months ended the Company received proceeds of from the exercise of stock options. During the months ended the Company received proceeds of from the exercise of stock options.

 

The Company’s Stock Compensation Plan permits its Compensation Committee to grant stock-based awards, including stock options and restricted stock, to key employees and non-employee directors. The Company has made restricted stock grants that vest over to years.

 

During the months ended the Company granted non-employee directors restricted stock awards totaling shares of common stock, with a vesting term of approximately year and a fair value of per share.

 

During the months ended the Company granted non-employee directors restricted stock awards totaling shares of common stock, with a vesting term of approximately year and a fair value of per share. Also, the Company granted employees a restricted stock award totaling shares of common stock, with a vesting term of year and a fair value of per share.

 

Restricted stock transactions during the months ended are summarized as follows:

 

		Number of shares				Weighted average grant date fair value
Unvested shares at September 30, 2018			248,613			$	14.65
Granted			4,340				14.40
Vested			(84,237	)			17.16
Forfeited			(11,230	)			14.44
Unvested at June 30, 2019			157,486			$	13.31

Clearfield, Inc.’s ESPP allows participating employees to purchase shares of the Company’s common stock at a discount through payroll deductions. The ESPP is available to all employees subject to certain eligibility requirements. Terms of the ESPP provide that participating employees purchase the Company’s common stock on a voluntary after-tax basis. Employees purchase the Company’s common stock at a price that is less than the lower of of the fair market value of share of common stock at the beginning or end of each stock purchase period or phase. The ESPP is carried out in month phases, with phases beginning on and of each calendar year. For the phases that ended on and employees purchased and shares at a price of per share. After the employee purchase on shares of common stock were available for future purchase under the ESPP.