The Transcat, Inc. 2003 Incentive Plan, as Amended and Restated (the “2003 Plan”), provides for, among other awards, grants of restricted stock units and stock options to directors, officers and key employees at the fair market value at the date of grant. At September 23, 2017, 1.1 million shares were available for future grant under the 2003 Plan.

Restricted Stock Units: The Company generally grants performance-based restricted stock units as a primary component of executive compensation. The units generally vest following the third fiscal year from the date of grant subject to certain cumulative diluted earnings per share growth targets over the eligible period. The restricted stock units granted in June 2017 were time vested. Compensation cost ultimately recognized for performance-based restricted stock units will equal the grant date fair market value of the unit that coincides with the actual outcome of the performance conditions. On an interim basis, the Company records compensation cost based on the estimated level of achievement of the performance conditions. The expense relating to the time vested restricted stock units is recognized on a straight-line basis over the requisite service period for the entire award.

The Company achieved 50% of the target level for the performance-based restricted stock units granted in the fiscal year ended March 28, 2015 and as a result, issued 25 shares of common stock to executive officers and certain key employees during the first quarter of fiscal year 2018. The following table summarizes the non-vested performance-based restricted stock units outstanding as of September 23, 2017:

Date Granted	Measurement Period	Total Number of Units Granted	Grant Date Fair Value Per Unit		Estimated Level of Achievement at September 23, 2017
April 2015	April 2015 - March 2018	63	$	9.59	50% of target level
April 2016	April 2016 - March 2019	84	$	10.13	115% of target level
April 2017	April 2017 – March 2020	77	$	12.90	100% of target level
June 2017	July 2017 – June 2020	3	$	12.00	Time Vested

Total expense relating to performance-based restricted stock units, based on grant date fair value and the achievement criteria, was $0.4 million and $0.3 million, respectively in the first six months of fiscal years 2018 and 2017. Total expense relating to time vested restricted stock units was less than $0.1 million for the first six months of fiscal year 2018. As of September 23, 2017, unearned compensation to be recognized over the grants’ respective service periods totaled $1.4 million.

Stock Options: Options generally vest over a period of up to four years using a straight-line basis and expire ten years from the date of grant. The expense relating to options is recognized on a straight-line basis over the requisite service period for the entire award.

The following table summarizes the Company’s options as of and for the first six months of fiscal year 2018:

	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding as of March 25, 2017		241	$	7.48

Granted		165		12.00
Exercised		(89)		7.29
Forfeited		(15)		7.36
Redeemed		(20)		7.72
Outstanding as of September 23, 2017		282	$	10.17	5	$	969
Exercisable as of September 23, 2017		282	$	10.17	5	$	969

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the second quarter of fiscal year 2018 and the exercise price, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all holders exercised their options on September 23, 2017. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s common stock.

Total expense related to stock options was $0.4 million and $0.1 million during each of the first six months of fiscal years 2018 and 2017, respectively. There was no total unrecognized compensation cost related to non-vested stock options as of September 23, 2017. The aggregate intrinsic value of stock options exercised in the first six months of fiscal year 2018 was $0.6 million. Cash received from the exercise of options in the first six months of fiscal year 2018 was $0.6 million.