13. Stock Option Plans

At January 31, 2016, the Company had stock-based compensation plans as described in more detail below. The total compensation expense related to stock-based awards granted under these plans during the fiscal years ended January 31, 2016, 2015 and 2014 was approximately $1.3 million, $1.3 million and $1.1 million, respectively. The Company recognizes stock-based compensation costs net of a forfeiture rate for only those awards expected to vest over the requisite service period of the award. The Company estimates the forfeiture rate based on its historical experience regarding employee terminations and forfeitures.

The fair value of each option award is estimated as of the date of grant using a Black-Scholes-Merton option pricing formula. Expected volatility is based on historical volatility of the Company’s stock over a preceding period commensurate with the expected term of the option. The expected term is based upon historical exercise patterns. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected dividend yield was not considered in the option pricing formula since the Company does not pay dividends and has not paid any dividends since its incorporation. The weighted average grant-date fair value of options granted during the fiscal years ended January 31, 2016, 2015 and 2014 was $1.64, $6.23 and $14.63, respectively. The assumptions for the periods indicated are noted in the following table.

Weighted average Black-Scholes-Merton fair value assumptions


	Years Ended January 31,
	2016	2015	2014
Risk free interest rate	1.34 - 1.55%	1.63%	0.83%
Expected life	4.87 - 6.87 yrs	4.70 - 6.70 yrs	5.62 yrs
Expected volatility	50 - 52%	47%	60%
Expected dividend yield	0.0%	0.0%	0.0%

Cash flows resulting from tax benefits attributable to tax deductions in excess of the compensation expense recognized for those options (excess tax benefits) are classified as financing out-flows and operating in-flows. The Company had excess tax benefits of approximately $416,000 and $5,000 during the fiscal years ended January 31, 2016 and 2014, respectively.

The Company has share-based awards outstanding under five different plans: the 1994 Stock Option Plan (“1994 Plan”), the 1998 Amended and Restated Stock Awards Plan (“1998 Plan”), the 2000 Stock Option Plan (“2000 Plan”), the Mitcham Industries, Inc. Stock Awards Plan (“2006 Plan”) and the 1994 Non-Employee Director Plan (“Director Plan”), (collectively, the “Plans”). Stock options granted and outstanding under each of the plans generally vest evenly over three years (except for the Director Plan, under which options generally vest after one year) and have a 10-year contractual term. The exercise price of a stock option generally is equal to the fair market value of the Company’s common stock on the option grant date. All Plans except for the 2006 Plan have been closed for future grants. All shares available but not granted under the 1998 Plan and the 2000 Plan as of the date of the approval of the 2006 Plan were transferred to the 2006 Plan. As of January 31, 2016, there were approximately 138,000 shares available for grant under the 2006 Plan. The 2006 Plan provides for awards of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units and phantom stock. New shares are issued for restricted stock and upon the exercise of options.

Stock Based Compensation Activity

The following table presents a summary of the Company’s stock option activity for the fiscal year ended January 31, 2016:


	Number of Shares (in thousands)			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding, January 31, 2015		1,406		$	12.85		4.32	$	200
Granted		828			4.03
Exercised		—			—
Forfeited		(15	)		5.00
Expired		(261	)		10.19

Outstanding, January 31, 2016		1,958		$	9.54		6.31	$	—

Exercisable at January 31, 2016		1,196		$	10.03		4.36	$	—
Vested and expected to vest at January 31, 2016		1,900		$	8.14		6.26	$	—

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 fourth quarter of fiscal 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on January 31, 2016. This amount changes based upon the market value of the Company’s common stock. No options were exercised during the fiscal year ended January 31, 2016. Total intrinsic value of options exercised for the fiscal year ended January 31, 2015 was $509,000. The fair value of options that vested during the fiscal years ended January 31, 2016, 2015 and 2014 was approximately $1.5 million, $1.2 million and $601,000, respectively. For the fiscal year ended January 31, 2016, approximately 272,000 options vested.

As of January 31, 2016, there was approximately $1.0 million of total unrecognized compensation expense related to unvested stock options granted under the Company’s share-based compensation plans. That expense is expected to be recognized over a weighted average period of 1.6 years.

Restricted stock as of January 31, 2016 and changes during the fiscal year ended January 31, 2016 were as follows:


	Year Ended January 31, 2016
	Number of Shares (in thousands)			Weighted Average Grant Date Fair Value
Unvested, beginning of period		66		$	14.19
Granted		7			4.07
Vested		(41	)		14.22
Canceled		—			—

Unvested, end of period		32		$	11.89

As of January 31, 2016, there was approximately $104,000 of unrecognized stock-based compensation expense related to unvested restricted stock awards. That expense is expected to be recognized over a weighted average period of 0.8 years.