9. Share-Based Compensation

The Company’s 2008 Stock Incentive Plan can authorize up to 10,000,000 common shares, which can be granted as RSU’s, unrestricted shares, incentive stock options, nonqualified stock options, PSU’s or SAR’s. Awards under this plan generally expire seven or ten years from the date of grant, thirty days after termination of employment or six months after the date of death or termination due to disability of the grantee. As of January 31, 2016, there were 4,040,821 common shares available to grant under the 2008 Stock Incentive Plan.

A lattice binomial pricing model (“the Model”) was used to estimate the fair value of stock options and SAR’s. The Model allows for assumptions such as the risk-free rate of interest, volatility and exercise rate to vary over time reflecting a more realistic pattern of economic and behavioral occurrences. The Company uses historical data on exercise timing to determine the expected life assumption. The risk-free rate of interest for periods within the contractual life of the award is based on U.S. Government Securities Treasury Constant Maturities over the expected term of the equity instrument. The expected volatility is based on a weighted-average of the implied volatility and the Company’s most recent historical volatility.

Based on the Company’s historical experience, it has assumed an annualized forfeiture rate of 5% for its unvested share-based awards granted during the fiscal years ended January 31, 2016, 2015 and 2014. For share-based awards granted in previous years that remain unvested, an annualized forfeiture rate of 5% has been assumed. The Company will record additional expense if the actual forfeiture rate is lower than it estimated, and will record a recovery of prior expense if the actual forfeiture is higher than estimated.

Share-based compensation expense, included in “Selling, general and administrative expenses” in the Consolidated Statements of Income, for the fiscal years ended January 31, 2016, 2015 and 2014 was as follows:


	Fiscal Year Ended January 31,
	2016		2015		2014
Stock Options	$	841	$	1,377	$	2,621
Stock Appreciation Rights		1,295		2,244		2,918
Performance Stock Units (1)(2)		13,464		12,991		9,956
Restricted Stock Units		23		124		247

Total	$	15,623	$	16,736	$	15,742

(1)	Includes the reversal of $967 of previously recognized compensation expense in fiscal 2016, related to 50,004 PSU’s that will not vest as the achievement of the related performance target is not probable.

(2)	Includes the reversal of $1,396 of previously recognized compensation expense in fiscal 2015, related to 163,336 PSU’s that will not vest as the achievement of the related performance target is not probable.

The total tax benefit associated with share-based compensation expense for the fiscal years ended January 31, 2016, 2015 and 2014 was $6,182, $6,367 and $5,976, respectively. The tax benefit realized from share-based compensation for the fiscal years ended January 31, 2016, 2015, and 2014 was $14,512, $5,813, and $10,611, respectively.

Stock Options

The Company may grant stock options which generally vest over a period of one to three years. Stock options become exercisable over the vesting period in installments determined by the Company, which can vary depending upon each individual grant. Stock options granted to non-employee directors generally vest over a period of one year. The following weighted-average assumptions were used in the Model to estimate the fair value of stock options at the date of grant:


	Fiscal Year Ended January 31,
	2016			2015			2014
Expected life, in years		3.5			3.4			3.5
Risk-free interest rate		1.2	%		1.1	%		0.6	%
Volatility		32.5	%		33.0	%		36.0	%
Dividend rate		—			—			—

The following table summarizes the Company’s stock option activity for the fiscal year ended January 31, 2016:


	Shares			Weighted- Average Exercise Price		Weighted- Average Contractual Terms (years)		Aggregate Intrinsic Value
Awards outstanding at beginning of year		2,464,390		$	32.69		1.6	$	8,547
Granted		120,000			38.09
Exercised		(1,416,990	)		32.75
Forfeited or Expired		(217,025	)		33.24

Awards outstanding at end of year		950,375			33.17		2.9	$	307
Awards outstanding expected to vest		944,375			33.17		2.9	$	292

Awards exercisable at end of year		830,375		$	32.46		2.9	$	307

The following table summarizes other information related to stock options during the years ended January 31, 2016, 2015 and 2014:


	Fiscal Year Ended January 31,
	2016		2015		2014
Weighted-average grant date fair value—per share	$	7.46	$	7.02	$	9.67
Intrinsic value of awards exercised	$	14,193	$	4,852	$	30,450
Net cash proceeds from the exercise of stock options	$	46,400	$	10,693	$	35,218

Total unrecognized compensation cost of stock options granted but not yet vested, as of January 31, 2016, was $286, which is expected to be recognized over the weighted-average period of 0.3 year.

Stock Appreciation Rights

The Company may grant SAR’s which generally vest over a five year period. Each vested SAR entitles the holder the right to the differential between the value of the Company’s common share price at the date of exercise and the value of the Company’s common share price at the date of grant. There were no SAR’s granted during the fiscal years ended January 31, 2016 and 2015. The following weighted-average assumptions were used in the Model to estimate the fair value of SAR’s at the date of grant:


	Fiscal Year Ended January 31,
	2016		2015		2014
Expected life, in years		—		—		5.6
Risk-free interest rate		—		—		1.0	%
Volatility		—		—		46.0	%
Dividend rate		—		—		—

The following table summarizes the Company’s SAR activity for the fiscal year ended January 31, 2016:


	Awards			Weighted- Average Exercise Price			Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Awards outstanding at beginning of year		893,408		$	30.89			4.6	$	3,990
Granted		—			—
Exercised		(520,358	)		29.68
Forfeited or Expired		(68,950	)		(36.25	)

Awards outstanding at end of year		304,100			31.74			3.5	$	—
Awards outstanding expected to vest		302,687			31.74			3.5	$	—

Awards exercisable at end of year		224,180		$	31.25			3.5	$	—

The following table summarizes other information related to SAR’s during the years ended January 31, 2016, 2015 and 2014:


	Fiscal Year Ended January 31,
	2016		2015		2014
Weighted-average grant date fair value—per share	$	—	$	—	$	14.11
Intrinsic value of awards exercised	$	7,386	$	654	$	848

Total unrecognized compensation cost of SAR’s granted, but not yet vested, as of January 31, 2016, was $379, which is expected to be recognized over the weighted-average period of 1.6 years.

Performance Stock Units

The Company may grant PSU’s which vest based on the achievement of various company performance targets and external market conditions. The fair value of the PSU’s are determined using a Monte Carlo simulation. This model uses assumptions including the risk free interest rate, expected volatility of the Company’s stock price and expected life of the awards. The Company makes certain estimates about the number of awards which will vest. Once the Company determines that it is probable that the performance targets will be met, compensation expense is recorded for these awards. If any of these performance targets are not met, the awards are forfeited. Each PSU is equal to one common share with varying maximum award value limitations. PSU’s typically vest over a five year period.

The following table summarizes the Company’s PSU activity for the fiscal year ended January 31, 2016:


	Shares			Weighted- Average Fair Value
Non-vested awards outstanding at beginning of year		3,992,209		$	21.32
Granted		1,471,000			18.94
Vested		(435,996	)		17.58
Forfeited		(843,915	)		22.72

Non-vested awards outstanding at end of year		4,183,298		$	20.64

The weighted-average grant date fair value of PSU’s awarded during the fiscal years ended January 31, 2016, 2015 and 2014 was $18.94, $23.40 and $25.13, per share, respectively. Unrecognized compensation cost related to unvested PSU’s as of January 31, 2016 was $44,682, which is expected to be recognized over a weighted-average period of 3.0 years.

Restricted Stock Units

The Company may grant RSU’s which vest based on the achievement of specified service and external market conditions. RSU’s typically vest over a three to five year period.

The following table summarizes the Company’s RSU activity for the fiscal year ended January 31, 2016:


	Shares			Weighted- Average Fair Value
Non-vested awards outstanding at beginning of year		5,000		$	39.06
Granted		—			—
Vested		(5,000	)		39.06
Forfeited		—			—

Non-vested awards outstanding at end of year		—		$	—

There were no RSU’s granted during the fiscal year ended January 31, 2016 and January 31, 2015. The weighted-average grant date fair value of RSU’s awarded during the fiscal year ended January 31, 2014 was $39.06 per share. No RSU’s vested during the fiscal year ended January 31, 2014. There were no unrecognized compensation costs related to unvested RSU’s as of January 31, 2016.