STOCK-BASED COMPENSATION

Refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2017 for a full description of our existing stock-based compensation plans.

Restricted Stock Units

We issue restricted stock units (RSUs) to certain officers and key employees of the Company. The fair value of the RSUs is based on the price of our common stock as reported on the NASDAQ Global Market on the grant dates. The typical annual grant vests over a three-year period from the date of issuance. Sixty percent of those grants are time-based and vest over a three-year period on each anniversary of the grant date, based on continued employment. The remaining forty percent of the grant will be earned based on the three-year earnings performance of the Company following the grant date. At June 30, 2018, there were 199,317 RSUs outstanding. The RSUs do not have voting rights but do receive dividend equivalents upon vesting; additionally, the shares of common stock underlying the RSUs are not considered issued and outstanding until vested and common stock is issued.

RSU activity (number of shares) for the nine months ended June 30, 2018 is summarized below:



	Number of Restricted Stock Units		Weighted Average Fair Value Per Share
Outstanding at September 30, 2017	177,737		$	37.00
Granted	88,000		29.88
Vested	(43,620	)	35.30
Forfeited/canceled	(22,800	)	41.88
Outstanding at June 30, 2018	199,317		$	33.69

During the nine months ended June 30, 2018 and 2017, we recorded compensation expense of $2.0 million and $1.7 million, respectively, related to the RSUs.

Restricted Stock

Each non-employee director receives 2,000 restricted shares of the Company’s common stock annually. Fifty-percent of the restricted stock granted to each of our non-employee directors vests immediately, while the remaining fifty-percent will vest on the first anniversary of the grant date. Compensation expense is recognized immediately for the first fifty-percent of the restricted stock granted, while compensation expense for the remaining fifty-percent is recognized over the remaining vesting period based on the price per share on the grant date. In February 2018, 12,000 shares of restricted stock were issued to our non-employee directors under the 2014 Director Plan at a price of $27.88 per share. In April 2018, we issued 2,000 shares of restricted stock to a non-employee director at a price of $27.15 per share.

During the nine months ended June 30, 2018 and 2017, we recorded compensation expense of $0.4 million and $0.6 million, respectively, related to restricted stock.