6.	Stock-based Compensation

On February 9, 2016, the shareholders of the Company approved the Amended and Restated Beacon Roofing Supply, Inc. 2014 Stock Plan (the “2014 Plan”). The 2014 Plan provides for discretionary awards of stock options, stock awards, restricted stock units, and stock appreciation rights (“SARs”) for up to 5,000,000 shares of common stock to selected employees and non-employee directors. The 2014 Plan mandates that all forfeited, expired, and withheld shares, including those from the predecessor plans, be returned to the 2014 Plan and made available for issuance. As of March 31, 2017, there were 4,051,683 shares of common stock available for issuance.

Prior to the 2014 Plan, the Company maintained the amended and restated Beacon Roofing Supply, Inc. 2004 Stock Plan (the “2004 Plan”). Upon shareholder approval of the 2014 Plan, the Company ceased issuing equity awards from the 2004 Plan and mandated that all future equity awards will be issued from the 2014 Plan.

For all equity awards granted prior to October 1, 2014, in the event of a change in control of the Company, all awards are immediately vested. Beginning in fiscal 2015, equity awards contain a “double trigger” change in control mechanism. Unless an award is continued or assumed by a public company in an equitable manner, an award shall become fully vested immediately prior to a change in control (at 100% in the case of a performance-based restricted stock award). If an award is so continued or assumed, vesting will continue in accordance with the terms of the award, unless there is a qualifying termination within one-year following the change in control, in which event the award shall become fully vested immediately (at 100% in the case of a performance-based restricted stock award).

Stock Options

Non-qualified stock options generally expire 10 years after the grant date and, except under certain conditions, the options are subject to continued employment and vest in one-third increments over a three-year period following the grant dates.

The fair values of the options granted during the six months ended March 31, 2017 were estimated on the dates of grants using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Risk-free interest rate	1.97	%
Expected volatility	28.83	%
Expected life (in years)	5.30
Dividend yield	—

The following table summarizes all stock option activity for the period presented (in thousands, except share, per share, and time period amounts):

					Weighted-Average
			Weighted-		Remaining		Aggregate
	Options		Average		Contractual Term		Intrinsic
	Outstanding		Exercise Price		(Years)		Value¹

Balance as of September 30, 2016		2,312,789	$	25.55		6.3	$	38,225
Granted		245,818		47.40
Exercised		(316,827)		21.20
Canceled		(22,271)		24.19
Balance as of March 31, 2017		2,219,509	$	28.60		6.5	$	45,630
Vested and expected to vest after March 31, 2017		2,167,911	$	28.51		6.5	$	44,759
Exercisable as of March 31, 2017		1,487,885	$	25.40		5.4	$	35,350

Aggregate intrinsic value as represents the difference between the closing fair value of the underlying common stock and the exercise price of outstanding, in-the-money options on the date of measurement

During the three months ended March 31, 2017 and 2016, the Company recorded stock-based compensation expense related to stock options of $1.3 million and $1.6 million, respectively. During the six months ended March 31, 2017 and 2016, the Company recorded stock-based compensation expense related to stock options of $2.6 million and $7.7 million, respectively. As of March 31, 2017, there was $7.0 million of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 2.1 years.

The following table summarizes additional information on stock options for the period presented (in thousands, except per share amounts):

	Six Months Ended
	March 31,
	2017		2016

Weighted-average fair value of stock options granted	$	14.21	$	12.89
Total fair value of stock options vested		4,998		11,020
Total intrinsic value of stock options exercised		7,906		14,415

Restricted Stock Units

Restricted stock unit (“RSU”) awards granted to employees are subject to continued employment and generally vest after three years. The Company also grants certain RSU awards to management that contain an additional vesting condition tied directly to a defined performance metric for the Company. The actual number of RSUs that will vest can range from 0% to 150% of the grant, depending upon actual Company performance below or above the target level. The Company estimates performance in relation to the established target when determining the projected number of RSUs that will vest and calculating the compensation cost related to these awards.

RSUs granted to non-employee directors are subject to continued service and vest after one year (except under certain conditions). Generally, the common shares underlying the RSUs are not eligible for distribution until the director’s service on the Board has terminated. For non-employee director RSU grants made prior to fiscal year 2014, the share distribution date is six months after the director’s termination of service on the board. RSU grants made in fiscal year 2014 and thereafter have no such holding period requirement. Additionally, beginning in fiscal year 2016 non-employee directors holding common stock and outstanding vested unexercised/unsettled equity awards with a fair value that is greater than or equal to five times the annual cash retainer may elect to have future grants settle simultaneously with vesting.

The following table summarizes all restricted stock unit activity for the period presented:

	RSUs		Weighted-Average
	Outstanding		Grant Date Fair Value
Balance at September 30, 2016		705,434	$	34.55
Granted		267,042		47.28
Released		(65,651)		36.33
Forfeited		(7,463)		44.53
Balance at March 31, 2017		899,362	$	38.27
Vested and expected to vest after March 31,2017		832,557	$	38.27

During the three months ended March 31, 2017 and 2016, the Company recorded stock-based compensation expense related to restricted stock units of $2.5 million and $1.9 million, respectively. During the six months ended March 31, 2017 and 2016, the Company recorded stock-based compensation expense related to restricted stock units of $5.0 million and $3.0 million, respectively. As of March 31, 2017, there was $17.5 million of total unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 2.1 years.

The following table summarizes additional information on RSUs for the period presented (in thousands):

	Six Months Ended
	March 31,
	2017		2016

Total fair value of RSUs released	$	2,385	$	369
Total intrinsic value of RSUs released		3,071		403