NOTE 10 – STOCK-BASED COMPENSATION

Under the Company’s Employee Stock Option Plan, as amended and restated as of April 4, 2013 (the “Plan”), the Compensation Committee of the Board of Directors, which consists of four of the Company’s non-employee directors, has the authority to grant incentive stock options and nonqualified stock options, as well as stock appreciation rights and stock awards, for up to 11,000,000 shares of common stock. Options granted to participants under the Plan generally become exercisable in equal installments over three or five years and remain exercisable until the tenth anniversary of the date of grant. The option price may not be less than the fair market value of the stock at the time the options are granted.

The weighted-average assumptions used with the Black-Scholes option-pricing model for the calculation of the fair value of stock option grants during fiscal 2017 were: expected term of 6.0 years; risk-free interest rate of 1.42%; expected volatility of 47.81% and dividend yield of 1.01%. The weighted-average grant date fair value of options granted during the fiscal year ended January 31, 2017 was $11.17. The weighted-average assumptions used with the Black-Scholes option-pricing model for the calculation of the fair value of stock option grants during fiscal 2016 were: expected term of 5.0 years; risk-free interest rate of 1.34%; expected volatility of 48.77% and dividend yield of 0.81%. The weighted-average grant date fair value of options granted during the fiscal year ended January 31, 2016 was $12.31. The weighted-average assumptions used with the Black-Scholes option-pricing model for the calculation of the fair value of stock option grants during fiscal 2015 were: expected term of 5.0 years; risk-free interest rate of 1.64%; expected volatility of 51.13% and dividend yield of 0.68%. The weighted-average grant date fair value of options granted during the fiscal year ended January 31, 2015 was $17.99.

Total compensation expense for stock option grants recognized during the fiscal years ended January 31, 2017, 2016 and 2015 was approximately $1.3 million, net of tax of $0.8 million and $1.1 million, net of tax of $0.6 million and $1.2 million, net of tax of $0.7 million, respectively. Expense related to stock option compensation is recognized on a straight-line basis over the vesting term. As of January 31, 2017, there was approximately $2.1 million of unrecognized compensation cost related to unvested stock options. These costs are expected to be recognized over a weighted-average period of 1.8 years. Total consideration received for stock option exercises during the fiscal years ended January 31, 2017, 2016 and 2015 was approximately $1.0 million, $0.6 million and $1.7 million, respectively. The windfall tax expense realized on these exercises in fiscal 2017 was approximately $0.1 million.

Transactions for stock options under the Plan since fiscal 2014 are summarized as follows:

	Outstanding Options			Weighted- Average Exercise Price
January 31, 2014		599,406		$	26.24
Options granted		116,880		$	41.71
Options exercised		(86,066	)	$	19.75
Options cancelled		(14,000	)	$	26.59
January 31, 2015		616,220		$	30.08
Options granted		126,880		$	30.36
Options exercised		(28,450	)	$	21.49
Options cancelled		(15,050	)	$	33.32
January 31, 2016		699,600		$	30.41
Options granted		200,346		$	26.97
Options exercised		(40,588	)	$	25.68
Options cancelled		—		$	—
January 31, 2017		859,358		$	29.83

The total fair value of stock options exercised for the fiscal years ended January 31, 2017, 2016 and 2015 was approximately $0.2 million, $0.2 million and $1.6 million, respectively. The total fair value of the stock options vested for the fiscal years ended January 31, 2017 and 2016 was approximately $2.0 million and $2.9 million, respectively. There were no stock options vested for the fiscal year ended January 31, 2015.

The following table summarizes outstanding and exercisable stock options as of January 31, 2017:

Range of Exercise Prices	Number Outstanding		Weighted- Average Remaining Contractual Life (years)		Weighted- Average Exercise Price		Number Exercisable		Weighted- Average Exercise Price
$21.03 - $24.02		93,750		3.4	$	22.09		68,750	$	22.29
$24.03 - $27.02		183,612		5.2	$	26.59		183,612	$	26.59
$27.03 - $30.02		175,346		9.2	$	27.74		—	$	—
$30.03 - $33.02		293,570		5.6	$	30.98		196,040	$	31.28
$33.03 - $42.02		29,780		7.4	$	40.52		19,853	$	40.52
$42.03 - $45.02		83,300		7.2	$	42.12		14,000	$	42.12
		859,358		5.7	$	29.83		482,255	$	28.91

The total intrinsic value of outstanding stock options as of January 31, 2017, 2016 and 2015 was approximately $0.6 million, $0.3 million and $0.2 million, respectively. The total intrinsic value of exercisable stock options as of January 31, 2017, 2016 and 2015 was approximately $0.4 million, $0.3 million and $0.2 million, respectively.

Under the Plan, the Company has the ability to grant stock awards to employees. Stock awards generally vest three to five years from the date of grant. Expense for these grants is recognized on a straight-line basis over the vesting period. The fair value of stock awards is equal to the closing price of the Company’s publicly-traded common stock on the grant date.

For fiscal years 2017, 2016 and 2015, compensation expense for stock awards was approximately $3.2 million, net of tax of $2.0 million, $2.7 million, net of tax of $1.7 million and $2.4 million, net of tax of $1.5 million, respectively. Current accounting guidance requires forfeitures to be estimated at the time of grant in order to estimate the amount of share-based awards that will ultimately vest and thus, current period compensation expense has been adjusted for estimated forfeitures based on historical data. As of January 31, 2017, there was approximately $5.1 million of unrecognized compensation cost related to unvested stock awards. These costs are expected to be recognized over a weighted-average period of 1.7 years.

Transactions for stock award units under the Plan since fiscal 2014 are summarized as follows:

	Number of Stock Award Units			Weighted- Average Grant Date Fair Value
January 31, 2014		303,170		$	24.84
Units granted		164,122		$	41.32
Units vested		(118,368	)	$	18.66
Units forfeited		(11,568	)	$	33.58
January 31, 2015		337,356		$	34.72
Units granted		136,310		$	29.48
Units vested		(83,578	)	$	29.99
Units forfeited		(15,490	)	$	35.70
January 31, 2016		374,598		$	33.83
Units granted		187,777		$	27.76
Units vested		(170,010	)	$	31.85
Units forfeited		(11,207	)	$	34.50
January 31, 2017		381,158		$	31.71

Upon the vesting of a stock award, shares equal to the number of underlying stock award units are issued from the pool of authorized shares. The total fair value of stock award units that vested during fiscal 2017, 2016 and 2015 was approximately $4.8 million, $2.5 million, and $4.9 million, respectively. The windfall tax expense realized on the vested stock awards for fiscal 2017 was $0.2 million. The weighted-average grant date fair values for stock awards for fiscal 2017, 2016, and 2015 were $27.76, $29.48 and $41.32, respectively. Unvested stock award units had a total fair value of approximately $10.3 million, $9.6 million, and $8.1 million for fiscal 2017, 2016 and 2015, respectively.