NOTE 10 — STOCK-BASED COMPENSATION

The Company’s board of directors may make awards under the 2011 Stock Plan (the “Stock Plan”) to officers, directors and key employees. Awards may include incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), and restricted or unrestricted stock. All stock options awarded under the Stock Plan shall have an exercise price per share at least equal to the common stock’s market value per share at the date of grant. ISOs shall have a term no longer than ten years; NSOs may have up to a ten-year term. In the past, stock options typically became exercisable one year from the date of award. Commencing in January 2018, stock options were awarded with three-year vesting schedules. As of April 30, 2018, there were approximately 1.0 million shares of the Company’s common stock reserved for issuance under the Company’s stock plans, including 20,500 shares of the Company’s common stock available for future awards.

Summaries of stock option activity under the Company’s stock plans for the three months ended April 30, 2018 and 2017, along with corresponding weighted average per share amounts, are presented below (shares in thousands):

	Shares	Exercise Price		Remaining Term (years)	Fair Value
Outstanding, February 1, 2018	889	$	44.83	7.91	$	11.74
Granted	97	$	37.60
Exercised	—	—

Outstanding, April 30, 2018	986	$	44.12	7.90	$	11.44

Exercisable, April 30, 2018	692	$	44.01	7.11	$	11.65

	Shares		Exercise Price		Remaining Term (years)	Fair Value
Outstanding, February 1, 2017	707		$	39.04	7.82	$	10.22
Granted	105		$	64.25
Exercised	(27	)	$	31.53

Outstanding, April 30, 2017	785		$	42.68	7.94	$	11.29

Exercisable, April 30, 2017	485		$	28.17	6.83	$	7.51

The changes in the number of non-vested options to purchase shares of common stock for the three months ended April 30, 2018 and 2017, and the weighted average fair value per share for each number, are presented below (shares in thousands):

	Shares		Fair Value
Non-vested, February 1, 2018	302		$	13.55
Granted	97		$	8.74
Vested	(105	)	$	16.37

Non-vested, April 30, 2018	294		$	10.95

	Shares		Fair Value
Non-vested, February 1, 2017	270		$	14.93
Granted	105		$	16.37
Vested	(75	)	$	9.01

Non-vested, April 30, 2017	300		$	17.38

In April 2018 and pursuant to terms of the Stock Plan, the Company awarded performance-based restricted stock units to two senior executives covering up to 36,000 shares of common stock. The release of the stock restrictions depends on the total shareholder return performance of the Company’s common stock measured against the performance of a peer-group of common stocks over a three-year period.

Compensation expense amounts related to stock awards were $0.6 million and $1.1 million for the three months ended April 30, 2018 and 2017, respectively. At April 30, 2018, there was $3.3 million in unrecognized compensation cost related to outstanding stock options and restricted stock units. The Company expects to recognize the compensation expense for these awards over the next three years. The total intrinsic value of the stock options exercised during the three months ended April 30, 2017 was $1.0 million. There were no stock options exercises during the three months ended April 30, 2018. At April 30, 2018, the aggregate market values of the shares of common stock subject to outstanding and exercisable stock options that were “in-the-money” as of April 30, 2018 exceeded the aggregate exercise prices of such options by $5.0 million and $4.7 million, respectively.

The Company estimates the weighted average fair value of stock options on the date of award using a Black-Scholes option pricing model, which was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The Company believes that its stock option exercise activity has become and remains sufficient to provide it with a reasonable basis upon which to estimate the expected life of newly awarded stock options. The fair values of stock options granted during the periods presented below were estimated on the corresponding date of award using the Black-Scholes option-pricing model based on the following weighted average assumptions:

	Three Months Ended April 30,
	2018		2017
Dividend yield	2.7	%	1.1	%
Expected volatility	36.0	%	36.0	%
Risk-free interest rate	2.0	%	1.6	%
Expected life (in years)	3.3		3.4