4. Employee Stock Plans

Stock-Based Compensation

The following table summarizes the components of stock-based compensation expense recognized in the Company’s consolidated statements of income for the periods indicated:


	Year Ended April 30,
	2018			2017			2016
	(in thousands)
Restricted stock	$	20,282		$	18,045		$	18,288
ESPP		1,187			913			590
Stock options		—			—			17

Total stock-based compensation expense, pre-tax		21,469			18,958			18,895
Tax benefit from stock-based compensation expense		(7,319	)		(4,756	)		(7,347	)

Total stock-based compensation expense, net of tax	$	14,150		$	14,202		$	11,548

Stock Incentive Plan

At the Company’s 2016 Annual Meeting of Stockholders, held on October 6, 2016, the Company’s stockholders approved an amendment and restatement to the Korn/Ferry International Amended and Restated 2008 Stock Incentive Plan (the 2016 amendment and restatement being “The Third A&R 2008 Plan”), which among other things, increased the number of shares under the plan by 5,500,000, increasing the current maximum number of shares that may be issued under the plan to 11,200,000 shares, subject to certain changes in the Company’s capital structure and other extraordinary events. The Third A&R 2008 Plan provides for the grant of awards to eligible participants, designated as either nonqualified or incentive stock options, restricted stock and restricted stock units, any of which may be performance-based or market-based, and incentive bonuses, which may be paid in cash or stock or a combination thereof. Under the Third A&R 2008 Plan, the ability to issue full-value awards is limited by requiring full-value stock awards to count 2.3 times as much as stock options.

Restricted Stock

The Company grants time-based restricted stock awards to executive officers and other senior employees generally vesting over a four-year period. In addition, certain key management members typically receive time-based restricted stock awards upon commencement of employment and may receive them annually in conjunction with the Company’s performance review. Time-based restricted stock awards are granted at a price equal to fair value, which is determined based on the closing price of the Company’s common stock on the grant date. The Company recognizes compensation expense for time-based restricted stock awards on a straight-line basis over the vesting period.

The Company also grants market-based and performance-based restricted stock units to executive officers and other senior employees. The market-based units vest after three years depending upon the Company’s total stockholder return over the three-year performance period relative to other companies in its selected peer group. The fair value of these market-based restricted stock units are determined by using extensive market data that is based on historical Company and peer group information. The Company recognizes compensation expense for market-based restricted stock units on a straight-line basis over the vesting period.

Performance-based restricted stock units vest after three years depending upon the Company meeting certain objectives that are set at the time the restricted stock unit is issued. Performance-based restricted stock units are granted at a price equal to fair value, which is determined based on the closing price of the Company’s common stock on the grant date. At the end of each reporting period, the Company estimates the number of restricted stock units expected to vest, based on the probability that certain performance objectives will be met, exceeded, or fall below target levels, and the Company takes into account these estimates when calculating the expense for the period.

Restricted stock activity is summarized below:


	April 30,
	2018					2017					2016
	Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value		Shares			Weighted- Average Grant Date Fair Value
	(in thousands, except per share data)
Non-vested, beginning of year		1,581		$	29.74		1,506		$	34.12		1,560		$	22.15
Granted		650		$	37.60		852		$	17.43		784		$	39.19
Vested		(431	)	$	26.13		(751	)	$	24.15		(809	)	$	16.35
Forfeited.		(70	)	$	33.26		(26	)	$	26.80		(29	)	$	23.38

Non-vested, end of year		1,730		$	33.45		1,581		$	29.74		1,506		$	34.12

As of April 30, 2018, there were 0.7 million shares and 0.2 million non-vested shares outstanding relating to market-based and performance-based restricted stock units, respectively, with total unrecognized compensation totaling $8.3 million and $3.0 million, respectively.

As of April 30, 2018, there was $30.8 million of total unrecognized compensation cost related to all non-vested awards of restricted stock, which is expected to be recognized over a weighted-average period of 2.3 years. During fiscal 2018 and 2017, 108,089 shares and 205,440 shares of restricted stock totaling $3.8 million and $4.8 million, respectively, were repurchased by the Company, at the option of the employee, to pay for taxes related to vesting of restricted stock.

Employee Stock Purchase Plan

The Company has an ESPP that, in accordance with Section 423 of the Internal Revenue Code, allows eligible employees to authorize payroll deductions of up to 15% of their salary to purchase shares of the Company’s common stock at 85% of the fair market price of the common stock on the last day of the enrollment period. Employees may not purchase more than $25,000 in stock during any calendar year. The maximum number of shares that may be issued under the ESPP is 3.0 million shares. During fiscal 2018, 2017 and 2016, employees purchased 198,749 shares at $31.77 per share, 207,141 shares at $20.93 per share and 95,135 shares at $28.83 per share, respectively. As of April 30, 2018, the ESPP had approximately 1.1 million shares remaining available for future issuance.

Common Stock

During fiscal 2018, 2017, and 2016, the Company issued 41,075 shares, 53,955 shares and 87,648 shares of common stock, respectively, as a result of the exercise of stock options, with cash proceeds from the exercise of $0.6 million, $0.8 million and $1.3 million, respectively.

During fiscal 2018 and 2017, the Company repurchased (on the open market) 984,079 shares and 1,140,576 shares, respectively, of the Company’s common stock for $33.1 million and $28.8 million, respectively. No shares were repurchased during fiscal 2016, other than to satisfy minimum tax withholding requirements upon the vesting of restricted stock as described above.