Stock-based compensation expense is included in general and administrative expenses in our consolidated statements of operations. Following is a summary of stock-based compensation expense related to stock options and restricted stock awards for the fiscal years ended 2023, 2022 and 2021, respectively.

Stock options have an exercise price equal to the fair market value of the common stock on the grant date, generally vest two or three years after the date of grant, and may be exercised thereafter until their expiration, subject to forfeiture upon termination of employment as provided in the applicable plan. Under certain conditions of retirement, eligible participants may receive a partial vesting of stock options. Stock options generally expire on the eighth anniversary from the date such options were granted, depending on the terms of the award.

The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option-pricing model (Black-Scholes Model). As of both September 30, 2023 and 2022, there was less than $0.1 million of total unrecognized compensation cost related to unvested stock options. The cost remaining as of September 30, 2023 is expected to be recognized over a weighted-average period of 1.8 years.

During fiscal 2018, the Compensation Committee of our Board of Directors approved the Employee Stock Option Program (ESOP). This program is available to all full-time employees and is designed to enable employees to share in potential price appreciation of the Company's stock. The ESOP matches stock purchases made by eligible employees meeting certain conditions with an option to purchase an additional share of the Company's shares on a one-to-one basis. The exercise price of the options granted is equal to the closing price of the Company's stock on the day the underlying shares are purchased by the employee, which is also the ESOP grant date. The options will vest on the second anniversary of the date of grant but are forfeited if (1) the eligible employee no longer works for the Company or (2) the underlying shares are sold before the two-year vesting period is over. The total number of options available under the ESOP is limited to 100,000, each for one share of the Company's common stock, of which 32,068 options were granted through the end of fiscal 2023.

During the fiscal years ended September 30, 2023 and 2022, we issued 100 and 236 stock options, respectively, all were issued under the ESOP. No stock options were issued during the fiscal year ended September 30, 2021.


	Fiscal Year Ended September 30,
	2023			2022			2021
	Shares	Weighted- Average Exercise Price		Shares	Weighted- Average Exercise Price		Shares	Weighted- Average Exercise Price
Outstanding at beginning of period	27,507	$	14.31	114,259	$	17.89	392,465	$	15.47
Granted	100	27.98		236	16.58		—	—
Exercised	(13,796)	19.00		(988)	11.32		(278,206)	14.48
Expired	—	—		(86,000)	19.11		—	—

Forfeited	(236)	16.58		—	—		—	—
Outstanding at end of period	13,575	$	9.61	27,507	$	14.31	114,259	$	17.89
Exercisable at end of period	13,475	$	9.48	27,271	$	14.29	113,309	$	17.95

The fair value of each restricted stock award with market conditions is estimated on the date of grant using the Monte Carlo valuation method. The fair value of restricted stock awards without market conditions is based on the market price of the Company's common stock on the date of grant. If applicable, the cash-settled component of any awards granted to employees is accounted for as a liability, which is adjusted to fair value each reporting period until vested.

Compensation cost arising from restricted stock awards granted to employees is recognized as an expense using the straight-line method over the vesting period. As of September 30, 2023 and 2022, there was $6.9 million and $7.3 million, respectively, of total unrecognized compensation cost related to unvested restricted stock awards. The cost remaining as of September 30, 2023 is expected to be recognized over a weighted-average period of 1.7 years.

During the fiscal year ended September 30, 2023, we issued 157,430 shares of performance-based restricted stock (2023 Performance Shares), containing market conditions, to our executive officers and certain other employees. The 2023 Performance Shares are structured to be awarded based on the Company's performance under three pre-determined financial and operational metrics at the end of the three-year performance period. After determining the number of shares earned based on the financial and operational metrics, which can range from 0% to 175% of the targeted number of shares, the award will be subject to further upward or downward adjustment by as much as 30% based on the Company's relative total shareholder return (TSR) compared against a selected small to mid-cap homebuilder peers during the three-year performance period. The 2023 Performance Shares were valued using the Monte Carlo valuation model due to the existence of the TSR market condition and had an estimated fair value of $12.67 per share on the date of grant.

A Monte Carlo valuation model requires the following inputs: (1) the expected dividend yield on the underlying stock; (2) the expected price volatility of the underlying stock; (3) the risk-free interest rate for the period corresponding with the expected term of the award; and (4) the fair value of the underlying stock. For the Company and each member of the peer group, the following inputs were used, as applicable, in the Monte Carlo valuation model to determine the fair value as of the grant date for performance-based restricted stock granted in each of the fiscal years ended.


	Fiscal Year Ended September 30,
	2023		2022		2021
Expected volatility range	41.5% - 86.9%		41.0% - 89.0%		26.1% - 67.0%
Risk-free interest rate	4.26	%	0.81	%	0.23	%
Dividend yield	—		—		—
Grant-date stock price range	$10.31 - $93.50		$21.40 - $142.99		$14.07 - $4,318.03

Each of our performance shares represent a contingent right to receive one share of the Company's common stock if vesting is satisfied at the end of the three-year performance period. Our performance stock award plans provide that any performance shares earned in excess of the target number of performance shares issued may be settled in cash or additional shares at the discretion of the Compensation Committee. We have no current plans to cash settle any additional performance-based restricted shares in the future.

The performance criteria of the 2021 Performance Share grant were satisfied as of September 30, 2023. Based on the actual performance level achieved, 210,176 performance-based restricted stock awards from the 2021 Performance Share grant cliff vested at the end of the three-year vesting period on November 16, 2023. Of the total $2.7 million compensation cost related to these awards, we have recognized $0.7 million, $1.2 million and $0.5 million during the fiscal years ended September 30, 2023, 2022 and 2021, respectively. The remaining $0.3 million of unrecognized compensation cost will be recognized in the first quarter of fiscal 2024.

During the fiscal year ended September 30, 2023, we also issued 425,398 shares of time-based restricted stock (Restricted Shares) to our directors, executive officers, and certain other employees. Restricted Shares are valued based on the market price of the Company's common stock on the date of the grant. The Restricted Shares granted to our non-employee directors vest on the first anniversary of the grant, while the Restricted Shares granted to our executive officers and other employees generally vest ratably over three years from the date of grant.


	Fiscal Year Ended September 30, 2023
	Performance-Based(a)			Time-Based			Total
	Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value
Beginning of period	436,146	$	17.76	412,042	$	18.52	848,188	$	18.13
Granted	249,534	14.17		425,398	12.05		674,932	12.83
Vested	(334,736)	16.80		(234,218)	18.02		(568,954)	17.30
Forfeited	(2,721)	15.20		(9,388)	14.38		(12,109)	14.56
End of period	348,223	$	16.20	593,834	$	14.15	942,057	$	14.91

(a) Grant and vesting activity during the fiscal year ended September 30, 2023 include 92,104 shares that were issued above target based on performance level achieved under performance-based restricted stock vesting in the current period.


	Fiscal Year Ended September 30, 2022
	Performance-Based(a)			Time-Based			Total
	Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value
Beginning of period	738,155	$	13.45	486,574	$	13.79	1,224,729	$	13.59
Granted	269,617	18.98		246,844	21.40		516,461	20.14
Vested	(552,417)	10.50		(286,182)	13.21		(838,599)	11.42
Forfeited	(19,209)	17.27		(35,194)	16.49		(54,403)	16.77
End of period	436,146	$	17.76	412,042	$	18.52	848,188	$	18.13

(a) Grant and vesting activity during the fiscal year ended September 30, 2022 include 177,759 shares that were issued above target based on performance level achieved under performance-based restricted stock vesting in the current period.


	Fiscal Year Ended September 30, 2021
	Performance-Based(a)			Time-Based			Total
	Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value
Beginning of period	796,024	$	14.71	610,130	$	13.85	1,406,154	$	14.34
Granted	164,296	17.90		251,788	14.21		416,084	15.67
Vested	(222,165)	22.40		(346,856)	14.36		(569,021)	17.50
Forfeited	—	—		(28,488)	11.77		(28,488)	11.77
End of period	738,155	$	13.45	486,574	$	13.79	1,224,729	$	13.59

(a) Grant and vesting activity during the fiscal year ended September 30, 2021 include 60,930 shares that were issued above target based on performance level achieved under performance-based restricted stock vesting in the current period.