The Company recorded and of compensation expense related to current and past restricted stock grants, non-qualified stock options 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 stock 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. 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 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 weighted average contractual term of years, a weighted average 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 weighted average contractual term of years, a year vesting term, and a weighted average exercise price of

This fair value of awards during the months ended was estimated as of the grant date using the range of assumptions listed below:

 

		Six months ended March 31, 2020
	Dividend yield		0%
	Expected volatility	39.5	-	41.5%
	Risk-free interest rate	1.65	-	1.69%
	Expected life (years)	4	-	6
	Vesting period (years)	3	-	5

 

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 as of the 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. 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 as of September 30, 2019			290,750			$	11.86
	Granted			116,600				12.43
	Exercised			(4,000	)			2.58
	Cancelled or Forfeited			(48,000	)			13.35
	Outstanding as of March 31, 2020			355,350			$	11.95

 

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 and exercisable 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 elected at the Company’s Annual Meeting of Shareholders restricted stock awards totaling shares of common stock, with a vesting term of approximately year and a fair value of per share. The Company also granted performance stock units entitling the participant to receive the same number of shares of the Company’s common stock, upon achievement of a fiscal year performance goal. The shares issued to the participant in settlement of the performance stock unit, if any, will be restricted stock subject to forfeiture that will vest year following the settlement date of the performance stock unit. The Company has determined the fair value per underlying share of the performance stock unit awards to be as of the grant date. These performance stock unit awards were forfeited during the months ended

 

During the months ended the Company granted non-employee directors elected at the Company’s Annual Meeting of Shareholders restricted stock awards totaling shares of common stock, with a vesting term of approximately 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 as of September 30, 2019			130,440			$	13.25
	Granted			19,455				11.30
	Vested			(5,740	)			14.01
	Forfeited			(9,875	)			12.03
	Unvested as of March 31, 2020			134,280			$	13.02

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 and per share, respectively. In the shareholders of Clearfield approved an increase of shares to the Company’s ESPP share pool. As a result, as of the Company has shares of common stock available for future purchase under the ESPP.