STOCKHOLDERS' EQUITY

Common Stock Dividend Distribution

During the year ended September 30, 2017, the Company declared a cash distribution of $0.18 per share, which was paid on October 4, 2017. The Company did not declare or pay any dividends during the years ended September 30, 2016 and 2015.

Stock Based Compensation

The Company's Amended and Restated 2016 Incentive Plan (the "Plan") permits the Company to grant: (i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, up to a maximum of 600,000 shares; and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards.

Restricted Stock Units

Pursuant to the Plan, in June 2016, the Company issued restricted stock units (the "Units") to acquire up to 450,000 shares of common stock . The Units entitle the recipients, subject to continued service through March 31, 2021 (the “Performance Period”), to receive in the aggregate, (i) 200,000 shares (the “TSR Award”) of common stock based on achieving, during the Performance Period, specified levels in compounded annual growth rate (“CAGR”) in total stockholder return (“TSR”), and (ii) 200,000 shares of common stock based on achieving, during the Performance Period, specified levels in CAGR in adjusted funds from operations, as determined pursuant to the performance agreement (the "AFFO Award"). In addition, up to 50,000 shares may be added to or subtracted from the TSR Award, based on attaining or failing to attain, as the case may be, during the Performance Period, of CAGR in TSR relative to the CAGR in TSR for the REITs that comprise, with specified exceptions, the FTSE NAREIT Equity Apartment Index. Finally, recipients are entitled to receive cash dividends with respect to the shares of common stock underlying their Units as if the underlying shares were outstanding during the Performance Period, if, when, and to the extent, the related Units vest. The Units were determined not to be participating securities and accordingly, for accounting purposes, the shares underlying the Units are excluded in the outstanding shares reflected on the consolidated balance sheet and from the calculation of basic earnings per share. Though the 450,000 shares underlying the units are contingently issuable shares, 350,000 of the such shares have not been included in the diluted earnings per share as the performance and market criteria with respect to the AFFO Award and a portion of the TSR Award have not been met. The Company included 100,000 shares of common stock underlying the TSR Awards in the calculation of diluted earnings per share as the market criteria with respect to such portion of the TSR award has been met at September 30, 2017.

For the TSR Awards, a third party appraiser prepared a Monte Carlo simulation pricing model to assist management in determining the fair value. For the AFFO Awards, the fair value is based on the market value on the date of grant. Expense is not recognized on the Units which the Company does not expect to vest as a result of conditions the Company does not expect to be met. The total amount recorded as deferred compensation with respect to the Units is $1,401,000 and is being charged to general and administrative expense over the Performance Period. The deferred compensation expense to be recognized is net of certain forfeiture and performance assumptions. The Company recorded $240,000 and $146,000 of compensation expense related to the amortization of unearned compensation with respect to the Units in the years ended September 30, 2017 and 2016, respectively. At September 30, 2017, $1,015,000 has been deferred as unearned compensation and will be charged to expense over the balance of the Performance Period.

Restricted Stock

In January 2017, the Company granted 147,500 shares of restricted stock pursuant to the Plan. As of September 30, 2017, an aggregate of 689,375 shared of unvested restricted stock are outstanding pursuant to the Plan and the 2012 Incentive Plan (the "Prior Plan"). No additional awards may be granted under the Prior Plan. All shares of restricted stock vest five years from the date of grant and under specified circumstances, including a change in control, may vest earlier. For financial statement purposes, the restricted stock is not included in the outstanding shares shown on the consolidated balance sheets until they vest, but are included in the earnings per share computation. During the years ended September 30, 2017, 2016 and 2015, the Company recorded $978,000 and $859,000, and $906,000 respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards. At September 30, 2017, 2016, and 2015, $2,356,000 and $2,089,000 and $2,184,000,

NOTE 12—STOCKHOLDERS' EQUITY (continued)

respectively, has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards. The weighted average vesting period of these restricted shares is 2.3 years.

Changes in number of restricted shares outstanding under the Company's equity incentive plans are shown below:



	Year Ended September 30,
	2017		2016		2015
Outstanding at beginning of the year	666,775		672,875		648,225
Issued	147,500		141,050		142,950
Cancelled	—		(16,850	)	—
Vested	(124,900	)	(130,300	)	(118,300	)
Outstanding at the end of the year	689,375		666,775		672,875

The following table reflects the compensation expense recorded for all incentive plans (dollars in thousands):



	Year Ended September 30,
	2017		2016		2015
Restricted stock grants	$	978	$	859	$	906
Restricted stock units	240		146		—
Total compensation	$	1,218	$	1,005	$	906

Earnings (Loss) Per Share

The following table sets forth the computation of basic and diluted earnings (loss) per share (dollars in thousands):



	Year Ended September 30,
	2017		2016		2015
Numerator for basic and diluted earnings per share attributable to common stockholders:
Net income (loss) attributable to common stockholders	$	13,600	$	31,289	$	(2,388	)

Denominator:
Denominator for basic earnings per share—weighted average number of shares	13,993,638		14,017,279		14,133,352
Effect of diluted securities	25,205		—		—
Denominator for diluted earnings per share—adjusted weighted average number of shares and assumed conversions	14,018,843		14,017,279		14,133,352

Basic earnings (loss) per share	$	0.98	$	2.23	$	(0.17	)
Diluted earnings (loss) per share	$	0.98	$	2.23	$	(0.17	)

Share Buyback

In February 2016, pursuant to a share purchase program then in effect, the Company purchased 252,000 shares of common stock at a market price of $6.29 per share for an aggregate purchase price, including commissions, of $1,584,000.

On March 11, 2016, the Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $5,000,000 of shares of common stock through September 30, 2017. Pursuant to this authorization, the

NOTE 12—STOCKHOLDERS' EQUITY (continued)

Company, from such date through September 30, 2017, repurchased 98,318 shares of common stock at an average market price of $7.37 per share, for an aggregate purchase price, including commissions, of $724,000.

On September 12, 2017, the Board of Directors authorized the Company, effective as of October 1, 2017, to purchase up to $5.0 million of its shares of common stock through September 30, 2019. No shares have been repurchased pursuant to this repurchase plan.