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

 

The Company uses the Black-Scholes option pricing model to determine the weighted average 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 year vesting term, and a weighted average exercise price of There were stock options granted during the months ended The weighted-average 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:

 

		Three months ended December 31, 2018
Dividend yield		0%
Weighted average expected volatility		37.77%
Weighted average risk-free interest rate		2.92%
Weighted average expected life (years)		3.0
Vesting period (years)		3.0

 

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 generally 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 as of September 30, 2018			138,500			$	10.99
Granted			172,000				12.17
Exercised			(3,750	)			2.58
Cancelled or Forfeited			-				-
Outstanding as of December 31, 2018			306,750			$	11.76

 

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 exercised stock options totaled shares, resulting in of proceeds to the Company.

 

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.

 

There were restricted stock awards granted during the months ended and 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, 2018			248,613			$	14.65
Granted			-				-
Vested			(1,700	)			13.64
Forfeited			(3,838	)			14.49
Unvested as of December 31, 2018			243,075			$	14.66

 

 

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. After the employee purchase on shares of common stock were available for future purchase under the ESPP.