19.

STOCK OPTION PLAN

Following an increase of 5,000,000 during the year ended January 31, 2019, a reserve of 10,814,828 subordinate voting shares are available to be granted in stock options to officers, employees and, in limited circumstances, to consultants of the Company under the Company’s stock option plan. Such stock options are time vesting and 25% of the options will vest on each of the first, second, third and fourth anniversary of the grant. The stock options have a ten-year term at the end of which the options expire.

Under the stock option plan existing prior to the initial public offering of the Company’s subordinate voting shares, the options vested or were eligible to vest in equal annual instalments on each of the five anniversary dates of the date of grant and were exercisable for a period of up to ten years from the grant date.

The following table summarizes the weighted-average fair value of options granted and the main assumptions that were used to calculate the fair value during the years ended January 31, 2019 and 2018:


	January 31, 2019		January 31, 2018
Weighted-average fair value at grant date		$18.02		$11.66
Weighted average assumptions used in the fair value models
Share price		$60.48		$39.93
Risk-free interest rate		2.20%		1.16%
Expected life		6.25 years		6.25 years
Expected volatility		27.64%		30.43%
Expected annual dividend per share		0.60%		0.80%

The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted. The expected volatility used in option pricing models is calculated based on historical volatility of similar listed entities.

The number of stock options varied as follows:


	Number of options			Weighted average exercise price
Balance as at February 1, 2017		2,840,433			$22.39
Granted		1,106,900			39.61
Forfeited/Cancelled		(87,150	)		24.77
Exercised ^[a]		(460,449	)		18.07
Balance as at January 31, 2018		3,399,734			28.52
Granted		937,150			60.16
Forfeited/Cancelled		(189,387	)		48.88
Exercised ^[b]		(264,478	)		23.50
Balance as at January 31, 2019		3,883,019			$35.51

^[a]	The weighted average stock price on these exercised stock options was $39.78.

^[b]	The weighted average stock price on these exercised stock options was $61.04.

The following table summarizes information about stock options outstanding and exercisable, as at January 31, 2019:

Outstanding

Exercisable

Exercise price range

Number of
options

Weighted-
average

exercise

price

Weighted-
average
remaining life
(years)

Number of
options

Weighted-
average

exercise

price

$0 to $4

26,894

$0.85

2.1

26,894

$0.85

$16 to $20

17,550

19.00

7.1

9,125

18.90

$20 to $24

1,045,175

20.86

6.1

724,425

21.09

$24 to $28

955,900

27.08

6.0

795,050

26.96

$28 to $32

3,000

29.03

4.9

3,000

29.03

$36 to $40

963,950

39.45

8.4

215,000

39.45

$40 to $44

119,500

40.46

9.4

11,275

40.90

$44 to $48

13,800

47.67

9.0

3,450

47.67

$60 to $64

737,250

62.69

9.4

—

Balance as at January 31, 2019

3,883,019

$35.51

7.4

1,788,219

$25.78

The following table summarizes information about stock options outstanding and exercisable, as at January 31, 2018:


	Outstanding						Exercisable
Exercise price range	Number of options		Weighted- average exercise price		Weighted- average remaining life (years)		Number of options		Weighted- average exercise price
$0 to $4		56,180		$0.60		2.5		56,180		$0.60
$4 to $8		9,029		6.63		4.5		7,648		6.54
$16 to $20		18,125		18.92		8.1		5,025		18.66
$20 to $24		1,147,725		20.86		7.1		646,000		21.26
$24 to $28		1,057,100		27.07		7.0		601,725		26.91
$28 to $32		5,875		29.03		5.9		5,875		29.03
$36 to $40		1,046,800		39.45		9.4		—		—
$40 to $44		45,100		40.90		9.7		—		—
$44 to $48		13,800		47.67		10.0		—		—
Balance as at January 31, 2018		3,399,734		$28.52		7.7		1,322,453		$22.89

Share based compensation expense of $11.1 million for the year ended January 31, 2019 ($8.5 million for the year ended January 31, 2018) has been recorded in general and administrative expenses in the consolidated statements of net income.

As at January 31, 2019, the total unrecognized compensation cost related to unvested share-based payments totalled $15.1 million ($12.2 million as at January 31, 2018).