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Stock-Based Compensation

12 Months Ended

Jul. 31, 2015

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 17—Stock-Based Compensation

Stock-Based Compensation Plans

On December 15, 2014, the Company’s stockholders ratified the 2015 Stock Option and Incentive Plan, which became effective on January 1, 2015. Shares available for future grants under the Company’s 2005 Stock Option and Incentive Plan are no longer available. The 2015 Stock Option and Incentive Plan is intended to provide incentives to officers, employees, directors and consultants of the Company, including stock options, stock appreciation rights, limited rights, deferred stock units, and restricted stock. At July 31, 2015, the Company had 0.5 million shares of Class B common stock reserved for award under its 2015 Stock Option and Incentive Plan and 0.1 million shares were available for future grants.

In fiscal 2015, fiscal 2014 and fiscal 2013, there was no income tax benefit resulting from tax deductions in excess of the compensation cost recognized for the Company’s stock-based compensation.

Stock Options

Option awards are generally granted with an exercise price equal to the market price of the Company’s stock on the date of grant. Option awards generally vest on a graded basis over three years of service and have ten-year contractual terms. The fair value of stock options was estimated on the date of the grant using a Black-Scholes valuation model and the assumptions in the following table. No option awards were granted in fiscal 2014 and fiscal 2013. Expected volatility is based on historical volatility of the Company’s Class B common stock and other factors. The Company uses historical data on exercise of stock options, post vesting forfeitures and other factors to estimate the expected term of the stock-based payments granted. The risk free rate is based on the U.S. Treasury yield curve in effect at the time of grant.

Year ended July 31		2015
ASSUMPTIONS
Average risk-free interest rate			1.63	%
Expected dividend yield			—
Expected volatility			51.4	%
Expected term			6.0 years

A summary of stock option activity for the Company is as follows:

		Number of Options (in thousands)				Weighted- Average Exercise Price				Weighted- Average Remaining Contractual Term (in years)				Aggregate Intrinsic Value (in thousands)
Outstanding at July 31, 2014			611			$	14.24
Granted			135				15.97
Exercised			(245	)			13.98
Cancelled / Forfeited			(77	)			16.22
OUTSTANDING AT JULY 31, 2015			424			$	14.58				7.4			$	1,167
EXERCISABLE AT JULY 31, 2015			147			$	17.02				4.1			$	132

The weighted-average grant date fair value of options granted by the Company during fiscal 2015 was $7.94. The total intrinsic value of options exercised during fiscal 2015, fiscal 2014 and fiscal 2013 was $1.3 million, $0.2 million and $0.2 million, respectively. At July 31, 2015, there was $1.7 million of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of 1.8 years.

In August 2013, in connection with the Straight Path Spin-Off, the exercise price of each outstanding option to purchase the Company’s Class B common stock was reduced by 15.29% of the exercise price based on the change in the trading price of the Company’s Class B common stock following the Straight Path Spin-Off. Further, each holder of options to purchase the Company’s Class B common stock shared ratably in a pool of options to purchase 32,155 shares of Straight Path Class B common stock. The Company accounted for the August 2013 reduction in the exercise price of the Company’s outstanding stock options and the grant of new options in Straight Path as a modification. The Company determined that there was no incremental value from the modification, and therefore, the Company did not record a stock-based compensation charge.

Restricted Stock

The fair value of restricted shares of the Company’s Class B common stock is determined based on the closing price of the Company’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three years of service.

A summary of the status of the Company’s grants of restricted shares of Class B common stock is presented below:

(in thousands)		Number of Non-vested Shares				Weighted- Average Grant- Date Fair Value
Non-vested shares at July 31, 2014			540			$	13.00
Granted			366				17.36
Vested			(454	)			12.34
Forfeited			(32	)			13.04
NON-VESTED SHARES AT JULY 31, 2015			420			$	17.50

At July 31, 2015, there was $6.1 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, which is expected to be recognized over a weighted-average period of 1.5 years. The total grant date fair value of shares vested in fiscal 2015, fiscal 2014 and fiscal 2013 was $5.6 million, $8.7 million and $3.5 million, respectively.

Straight Path IP Group Stock

On September 24, 2012, the Company’s Board of Directors approved a grant of 10% of the equity of the Company’s former subsidiary, Straight Path IP Group, to Howard Jonas. These Straight Path IP Group shares vested immediately. The Company recorded stock-based compensation expense of $0.7 million in fiscal 2013 for the grant of these shares, based on the estimated fair value of the shares on the grant date.