Note 17 – Stock-Based Compensation

All equity compensation plans have been approved by shareholders. Under the 2014 Key Employee Stock Plan, (“the Plan”), qualified employees are eligible to receive awards that may include stock options, performance-based stock awards, and other restricted stock awards. Under the Plan, a maximum number of 6.5 million shares of our Class A stock may be issued. As of April 30, 2019, there were approximately 4,355,399 securities remaining available for future issuance under the Plan. We issue treasury shares to fund awards issued under the Plan.

Stock Option Activity:

Under the terms of our stock option plan, the exercise price of stock options granted may not be less than 100% of the fair market value of the stock at the date of grant. Options are exercisable over a maximum period of 10 years from the date of grant. For the years ended April 30, 2015 and prior, options generally vest 50% on the fourth and fifth anniversary date after the award is granted. For the year ended April 30, 2016, options vest 25% per year on April 30. We did not grant any stock option awards in the years ended April 30, 2019, 2018 and 2017. As of April 30, 2019, all outstanding options have vested allowing the participant the right to exercise their awards.

The following table provides the estimated weighted average fair value for options granted in the year ended April 30, 2016 using the Black-Scholes option-pricing model and the significant weighted average assumptions used in their determination. The expected life represents an estimate of the period of time stock options will be outstanding based on the historical exercise behavior of option recipients. The risk-free interest rate is based on the corresponding U.S. Treasury yield curve in effect at the time of the grant. The expected volatility is based on the historical volatility of our Common Stock price over the estimated life of the option, while the dividend yield is based on the expected dividend payments to be made by us.

	2016
Fair Value of Options on Grant Date	$	14.77

Weighted Average assumptions:
Expected Life of Options (years)		7.2
Risk-Free Interest Rate		2.1	%
Expected Volatility		29.7	%
Expected Dividend Yield		2.1	%
Fair Value of Common Stock on Grant Date	$	55.99

A summary of the activity and status of our stock option plans follows:

	2019									2018					2017
	Number of Options (in 000’s)			Weighted Average Exercise Price		Weighted Average Remaining Term (in years)		Aggregate Intrinsic Value (in millions)		Number of Options (in 000’s)			Weighted Average Exercise Price		Number of Options (in 000’s)			Weighted Average Exercise Price
Outstanding at Beginning of Year		611		$	48.88						1,429		$	47.39		1,966		$	46.62
Granted		—		$	—						—		$	—		—		$	—
Exercised		(229	)	$	47.21						(788	)	$	45.97		(469	)	$	43.74
Expired or Forfeited		(10	)	$	56.97						(30	)	$	54.24		(68	)	$	49.91
Outstanding at End of Year		372		$	49.70		2.8	$	0.8		611		$	48.88		1,429		$	47.39
Exercisable at End of Year		372		$	49.70		2.8	$	0.8		530		$	47.43		1,064		$	46.04
Vested and Expected to Vest in the Future at April 30		372		$	49.70		2.8	$	0.8		599		$	48.90		1,249		$	45.88

The intrinsic value is the difference between our common stock price and the option grant price. The total intrinsic value of options exercised during the years ended April 30, 2019, 2018, and 2017 was $4.4 million, $10.4 million, and $20.5 million, respectively. The total grant date fair value of stock options vested during the years ended April 30, 2019 and 2018 was $4.8 and $13.4 million, respectively.

As of April 30, 2019, there is no unrecognized share-based compensation expense related to stock options.

The following table summarizes information about stock options outstanding and exercisable at April 30, 2019:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number of Options (in 000’s)		Weighted Average Remaining Term (in years)		Weighted Average Exercise Price		Number of Options (in 000’s)		Weighted Average Exercise Price
$	35.04		11		0.2	$	35.04		11	$	35.04
$	39.53 to $40.02		101		2.3	$	39.71		101	$	39.71
$	48.06 to $49.55		106		2.3	$	48.69		106	$	48.69
$	55.99 to $59.70		154		3.6	$	57.87		154	$	57.87
Total/Average			372		2.8	$	49.70		372	$	49.70

Performance-Based and Other Restricted Stock Activity:

Under the terms of our long-term incentive plans, performance-based restricted unit awards are payable in restricted shares of our Class A Common Stock upon the achievement of certain three-year financial performance-based targets. During each three-year period, we adjust compensation expense based upon our best estimate of expected performance. For the years ended April 30, 2015 and prior, restricted performance shares vest 50% on the first and second anniversary date after the award is earned. For the years ended April 30, 2016 and 2017, restricted performance shares vest 50% on June 30 following the end of the three-year performance cycle and 50% on April 30 of the following year. Beginning in the year ended April 30, 2018, restricted performance share units vest 100% on June 30 following the end of the three-year performance cycle.

We may also grant individual restricted unit awards payable in restricted shares of our Class A Common Stock to key employees in connection with their employment. For the years ended April 30, 2015 and prior, the restricted shares generally vest 50% at the end of the fourth and fifth years following the date of the grant. Starting with the year ended April 30, 2016 grants, restricted shares vest ratably 25% per year.

Under certain circumstances relating to a change of control or termination, as defined, the restrictions would lapse, and shares would vest earlier.

Activity for performance-based and other restricted stock awards during the years ended April 30, 2019, 2018, and 2017 was as follows (shares in thousands):

	2019					2018			2017
	Restricted Shares			Weighted Average Grant Date Value		Restricted Shares			Restricted Shares
Nonvested Shares at Beginning of Year		861		$	53.22		913			915
Granted		415		$	62.63		525			509
Change in Shares Due to Performance		(19	)	$	44.17		(107	)		(67	)
Vested and Issued		(357	)	$	54.95		(318	)		(267	)
Forfeited		(144	)	$	55.37		(152	)		(177	)
Nonvested Shares at End of Year		756		$	57.38		861			913

As of April 30, 2019, there was $28.1 million of unrecognized share-based compensation cost related to performance-based and other restricted stock awards, which is expected to be recognized over a period up to 4 years, or 2.2 years on a weighted average basis.

Compensation expense for restricted stock awards is measured using the closing market price of our Class A Common Stock at the date of grant. The total grant date value of shares vested during the years ended April 30, 2019, 2018, and 2017 was $19.6 million, $15.7 million, and $12.1 million, respectively.

President and CEO New Hire Equity Awards

On October 17, 2017, we announced Brian A. Napack as the new President and Chief Executive Officer of Wiley effective December 4, 2017 (the "Commencement Date"). Upon the Commencement Date, Mr. Napack also became a member of our Board of Directors (the "Board"). In connection with his appointment, Wiley and Mr. Napack entered into an employment offer letter (the "Employment Agreement").

The Employment Agreement provides that beginning with the year ended April 30, 2018–2020 performance cycle, eligibility to participate in annual grants under our Executive Long-Term Incentive Program (ELTIP). Targeted long-term incentive for this cycle is equal to 300% of base salary, or $2.7 million. Sixty percent of the ELTIP value will be delivered in the form of target performance share units and forty percent in restricted share units. The grant date fair value for restricted share units was $59.15 per share and included 20,611 restricted share units, which vest 25% each year starting on April 30, 2018 to April 30, 2021. In addition, there was a performance share unit award with a target of 30,916 units and a grant date fair value of $59.15. The performance metrics are based on cumulative EBITDA for the year ended April 30, 2018-2020 and cumulative normalized free cash flow for the year ended April 30, 2018–2020.

The awards are described in further detail in Mr. Napack’s Employment Agreement filed with the SEC as Exhibit 10.1 to our Current Report on Form 8-K filed on October 17, 2017.

In addition, the Employment Agreement provides for a sign-on grant of restricted share units, with a grant value of $4.0 million, converted to shares using our Class A closing stock price as of the Commencement Date, and vesting in two equal installments on the first and second anniversaries of the employment date. The grant date fair value for this award was $59.15 per share and included 67,625 units at the date of grant. Grants are subject to forfeiture in the case of voluntary termination prior to vesting and accelerated vesting in the case of earlier termination of employment without Cause, due to death or Disability or Constructive Discharge, or upon a Change in Control (as such terms are defined in the Employment Agreement).

The awards are described in further detail in Mr. Napack’s Employment Agreement filed with the SEC as Exhibit 10.1 to our Current Report on Form 8-K filed on October 17, 2017.

Director Stock Awards:

Under the terms of our 2018 Director Stock Plan (the “Director Plan”), each non-employee director, other than the Chairman of the Board, receives an annual award of restricted shares of our Class A Common Stock equal in value to 100% of the annual director stock retainer fee, based on the stock price at the close of the New York Stock Exchange on the date of grant. Such restricted shares will vest on the earliest of (i) the day before the next Annual Meeting following the grant, (ii) the non-employee director’s death or disability (as determined by the Governance Committee), or (iii) a change in control (as defined in the 2014 Key Employee Stock Plan). The granted shares may not be sold or transferred during the time the non-employee director remains a director. There were 18,991 restricted shares awarded under the Director Plan for the year ended April 30, 2019, and 19,900, and 20,243 shares awarded under the Director Plan for the years ended April 30, 2018, and 2017, respectively.