In June 2010, the Company adopted the 2010 Share Incentive Plan. The plan permits the grant of options to purchase the Class A common shares, share appreciation rights, restricted shares, restricted share units, dividend equivalent rights and other instruments as deemed appropriate by the administrator under the plans. In August 2013, the Company amended and restated the 2010 Share Incentive Plan (the “Amendment”). Pursuant to the Amendment, the maximum aggregate number of Class A common shares that may be issued pursuant to all awards under the share incentive plan is equal to five percent (5%) of the total issued and outstanding shares as of the date of the Amendment. However, the shares reserved may be increased automatically if and whenever the unissued share reserve accounts for less than one percent (1%) of the total then issued and outstanding shares, so that after the increase, the shares unissued and reserved under this plan immediately after each such increase shall equal five percent (5%) of the then issued and outstanding shares.

In June, 2020, the Company adopted the 2020 Share Incentive Plan. The 2020 Plan permits the grant of options to purchase Class A common shares, restricted shares, restricted share units and other instruments as deemed appropriate by the administrator under the plan. Pursuant to the 2020 Plan, the maximum aggregate number of shares that may be issued pursuant to all awards (including incentive share options) (the “Award Pool”) is initially five percent (5)% of the total issued and outstanding shares as of the effective date of the 2020 Plan, provided that (A) the Award Pool shall be increased automatically if and whenever the number of shares that may be issued pursuant to ungranted awards under the 2020 Plan (the “Ungranted Portion”) accounts for less than one percent (1)% of the then total issued and outstanding shares of the Company, so that for each automatic increase, the Ungranted Portion immediately after such increase shall equal five percent (5)% of the then total issued and outstanding shares of the Company, and (B) the size of the Award Pool shall be equitably adjusted in the event of any share dividend, subdivision, reclassification, recapitalization, split, reverse split, combination, consolidation or similar transactions.

The Company’s 2010 Share Incentive Plan has ceased to be used for grants of future awards upon the effectiveness of the 2020 Plan.

During the year ended February 29, 2020, the Company granted 1,376,628 service-based non-vested shares to employees and directors which generally vest annual in equal batches over a period of 1 to 8 years.

During the year ended February 28, 2021, the Company granted 1,737,898 service-based non-vested shares to employees and directors which generally vest annual in equal batches over a period of 1 to 6 years.

During the year ended February 28, 2022, the Company granted 5,685,826 service-based non-vested shares to employees and directors which generally vest annual in equal batches over a period of 0 to 8 years.

The activities of non-vested shares granted with service condition were summarized as follows:


	Service Condition
	Number of	Weighted
	non-vested	average grant date
	shares	fair value

Outstanding as of February 28, 2021	8,384,326	79.67

Granted	5,685,826	34.30
Forfeited	3,696,601	81.56
Vested	2,139,084	67.91

Outstanding as of February 28, 2022	8,234,467	50.55

The Company recorded compensation expense of $114,027, $146,410 and $125,596 for the years ended February 29, 2020, February 28, 2021 and 2022 related to service-based non-vested shares, respectively.

As of February 28, 2022, the unrecognized compensation expense related to the service-based non-vested share awards amounted to $311,900, which is expected to be recognized over a weighted-average period of 3.7 years. The total fair value of service-based non-vested shares that vested during the years ended February 29, 2020, February 28, 2021 and 2022 was $77,012, $111,331 and $145,265, respectively.

During the year ended February 28, 2022, the Company granted 531,612 performance-based non-vested shares to employees which generally vest annual in equal batches over a period of 0 to 8 years. The vesting of awards is subject to the satisfaction of both a service and performance condition based on individual performance evaluations.

The activities of non-vested shares granted with performance condition were summarized as follows:


	Performance Condition
	Number of	Weighted
	non-vested	average grant date
	shares	fair value

Outstanding as of February 28, 2021	556,613	220.87

Granted	531,612	119.56
Forfeited	412,944	148.03
Vested	316,132	208.65

Outstanding as of February 28, 2022	359,149	164.42

The Company recorded compensation expense related to performance-based non-vested shares of nil, $54,556 and $45,147 for the years ended February 29, 2020, February 28, 2021 and 2022, respectively.

As of February 28, 2022, the unrecognized compensation expense related to the performance-based non-vested share awards amounted to $50,228, which is expected to be recognized over a weighted-average period of 3.4 years.

The total fair value of performance-based non-vested share that vested during the year ended February 28, 2022 was $ 65,961.

Share options granted to employees and directors expire ranging from 8 to 12 years from the date of grant.

During the year ended February 29, 2020, the Company granted 203,179 share options to employees at exercise prices ranging from $63.00 to $115.80. These share options vest annually in equal batches over a period from 3 to 4 years.

During the year ended February 28, 2021, the Company granted 82,003 share options to employees at exercise prices ranging from $208.41 to $239.01. These share options vest annually in equal batches over a period from 4 to 6 years.

During the year ended February 28, 2022, the Company granted 115,690 share options to employees at exercise prices ranging from $40.00 to $175.14. These share options vest annually in equal batches over a period from 3 to 6 years.

The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions used for grants during the applicable periods:


	For the year ended		For the year ended		For the year ended
	February 29, 2020		February 28, 2021		February 28, 2022
Risk-free interest rate⁽¹⁾	1.63%‑2.35	%	0.31%‑0.51	%	0.96%-1.06	%
Expected life (years)⁽²⁾	6.00‑6.25		6.25‑7.43		6.00-6.50
Expected dividend yield⁽³⁾	0	%	0	%	0	%
Volatility⁽⁴⁾	34.2%‑35.1	%	35.8%‑35.9	%	37.4%-58.3	%
Fair value of options at grant date per share	$43.53 to $72.09		$65.55 to $90.06		$4.02 to $74.82

Risk-free interest rate for periods within the contractual life of the option is based upon the U.S. treasury yield curve in effect at the time of grant.

(2)

Expected life (years)

Assumption of the expected term were based on the vesting and contractual terms and employee demographics.

(3)

Expected dividend yield

The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the options.

25. SHARE-BASED COMPENSATION – continued

Share options - continued

(4)

Volatility

The volatility assumption was estimated based on historical volatility of the Company’s share price applying the guidance provided by ASC 718. The Company begins to estimate the volatility assumption solely based on its historical information since October 2010.

The activities of share options for the years ended February 28, 2022 were as follows:


		Weighted	Weighted	Aggregate
		average	average remaining	intrinsic
	Number	exercise price	contractual	value
Share options	of shares	(US$)	life (Years)	(US$)

Outstanding as of February 28, 2021	538,583	67.58	6.96	88,975

Granted	115,690	47.01
Exercised	56,296	23.33
Forfeited	131,552	56.00

Outstanding as of February 28, 2022	466,425	71.09	6.54	1,049

Vested and expected to vest as of February 28, 2022	466,425	71.09	6.54	1,049
Exercisable as of February 28, 2022	295,080	44.00	5.61	480

The Company recorded compensation expense of $3,916, $3,979 and $4,089 for the years ended February 29, 2020, February 28, 2021 and 2022 related to share options, respectively.

Total intrinsic value of options exercised for the years ended February 29, 2020, February 28, 2021 and 2022 was $12,139, $74,154 and $6,034, respectively. The total fair value of options vested during the years ended February 29, 2020, February 28, 2021 and 2022 was $3,225, $4,315 and $4,029 respectively.

As of February 28, 2022, there was $6,828 unrecognized share-based compensation expense related to share options, which is expected to be recognized over a weighted-average vesting period of 3.4 years.

The total compensation expense is recognized on a straight-line basis over the respective vesting periods. The Group recorded the related compensation expense of $117,943, $204,945 and $174,832 for the years ended February 29, 2020, February 28, 2021 and 2022, respectively.

25. SHARE-BASED COMPENSATION – continued

Share options - continued

Table below shows the summary of share-based compensation expense:


	For the year ended		For the year ended		For the year ended
	February 29,		February 28,		February 28,
	2020		2021		2022

Cost of revenues	$	1,074	$	1,803	$	1,134
Selling and marketing expenses		19,356		56,609		53,850
General and administrative expenses		97,513		146,533		119,848

Total	$	117,943	$	204,945	$	174,832

Stock Option Exercise Price Adjustment

In September 2021, the Company’s Board of Directors approved the adjustment of exercise prices for certain options vesting on and after July 26, 2021 on a one-for-one basis to $3.00 per share which represented the per share fair value of the Company’s common stock as of the date of the adjustment. There was no modification to the vesting schedule or other terms of the previously issued options. As a result, 194,059 unvested options originally granted to purchase Class A common share at prices ranging from $14.49 to $239.01 per share were modified under this program.

The Company treated the adjustment of exercise price as a modification of the original awards and calculated incremental compensation costs for the difference between the fair value of the awards immediately before and after modification, which resulted in incremental stock-based compensation expense of $2,084. Expense related to vested shares was expensed on the repricing date and expense related to unvested shares is being amortized over the remaining vesting period of such stock options.