9.	Equity Incentive Plan

The Company previously maintained the ESSA Bancorp, Inc. 2007 Equity Incentive Plan (the “Plan”). The Plan provided for a total of 2,377,326 shares of common stock for issuance upon the grant or exercise of awards. Of the shares that were available under the Plan, 1,698,090 were available to be issued in connection with the exercise of stock options and 679,236 were available to be issued as restricted stock. The Plan allowed for the granting of non-qualified stock options (“NSOs”), incentive stock options (“ISOs”), and restricted stock. Options granted under the plan were granted at no less than the fair value of the Company’s common stock on the date of the grant. As of the effective date of the 2016 Equity Incentive Plan (detailed below), no further grants will be made under the Plan and forfeitures of outstanding awards under the Plan will be added to the shares available under the 2016 Equity Incentive Plan.

The Company replaced the 2007 Equity Incentive Plan with the ESSA Bancorp, Inc. 2016 Equity Incentive Plan (the “2016 Plan”) which was approved by shareholders on March 3, 2016. The 2016 Plan provides for a total of 250,000 shares of common stock for issuance upon the grant or exercise of awards. The 2016 Plan allows for the granting of restricted stock, restricted stock units, ISOs and NSOs.

Certain officers, employees and outside directors were granted in aggregate 1,140,469 NSOs; 317,910 ISOs; and 590,320 shares of restricted stock on May 23, 2008. Certain officers were granted in aggregate 30,000 shares of restricted stock on April 1, 2013, 19,880 shares of restricted stock on July 22, 2014, 21,843 shares of restricted stock on May 20, 2015, 23,491 shares of restricted stock on March 4, 2016, 20,675 shares of restricted stock on December 13, 2016 and 3,296 shares of restricted stock on March 29, 2017. In accordance with generally accepted accounting principles, the Company expenses the fair value of all share-based compensation grants over the requisite service periods.

The Company classifies share-based compensation for employees and outside directors within “Compensation and employee benefits” in the Consolidated Statement of Income to correspond with the same line item as compensation paid.

Stock options vest over a five-year service period and expire ten years after the grant date. The Company recognizes compensation expense for the fair values of these awards, which vest on a straight-line basis over the requisite service period of the awards.

The 2013 restricted stock shares vested over an 18 month service period. The 2014 restricted shares vest over a 39 month service period. The 2015 restricted shares vest over a 40 month service period. The March 4, 2016 restricted shares vest over a 43 month service period. The December 13, 2016 restricted shares vest over a 46 month service period. The March 29, 2017 restricted shares vest over 42 months for 1,296 shares and over 18 months for 2,000 shares. The product of the number of shares granted and the grant date market price of the Company’s common stock determines the fair value of restricted shares under the Company’s restricted stock plan.

For the six months ended March 31, 2017 and 2016, the Company recorded $145,000 and $79,000 of share-based compensation expense, respectively, comprised of restricted stock expense. Expected future compensation expense relating to the restricted shares issued in 2014, at March 31, 2017 is $32,000 over the remaining vesting period of 0.5 years. Expected future compensation expense relating to the restricted shares issued in 2015, at March 31, 2017 is $123,000 over the remaining vesting period of 1.5 years. Expected future compensation expense relating to the restricted shares issued in March 2016, at March 31, 2017 is $213,000 over the remaining vesting period of 2.5 years. Expected future compensation expense relating to the restricted shares issued in December 2016, at March 31, 2017 is $313,000 over the remaining vesting period of 3.5 years. Expected future compensation expense relating to the restricted shares (1,296) issued in March 2017, at March 31, 2017 is $19,000 over the remaining vesting period of 3.5 years. Expected future compensation expense relating to the restricted shares (2,000) issued in March 2017, at March 31, 2017 is $29,000 over the remaining vesting period of 1.5 years.

The following is a summary of the Company’s stock option activity and related information for its option grants for the six month period ended March 31, 2017.

	Number of Stock Options		Weighted- average Exercise Price		Weighted- average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding, September 30, 2016		905,987	$	12.35		1.67	$	1,341
Granted		—		—		—		—
Exercised		488,491		12.35		1.17		—
Forfeited		—		—		—		—
Outstanding, March 31, 2017		417,496	$	12.35		1.17	$	932
Exercisable at March 31, 2017		417,496	$	12.35		1.17	$	932

The following is a summary of the status of the Company’s restricted stock as of March 31, 2017, and changes therein during the six month period then ended:

	Number of Restricted Stock		Weighted- average Grant Date Fair Value
Nonvested at September 30, 2016		31,896	$	13.11
Granted		23,971		16.28
Vested		—		—
Forfeited		—		—
Nonvested at March 31, 2017		55,867	$	14.50