STOCK-BASED COMPENSATION

We determined the fair value of stock options and restricted stock issued under our long term incentive plans as of the grant date. The fair value of restricted stock was determined by the closing market price of our Common Stock on the date of grant multiplied by the number of shares granted. The fair value of the stock options was estimated on the date of the grant using a Black-Scholes option valuation model that used various assumptions. The risk free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant. Expected life (estimated period of time outstanding) of a grant was determined by reference to the vesting schedule and past exercise behavior. The dividend rate at the date of grant was used as the best estimate of future dividends. Expected volatility was determined by calculating the standard deviation of our stock price for the five years immediately prior to the grant date. This period of time closely resembles the expected term. All stock options issued under our plans have an exercise price equal to the closing market price of our Common Stock on the date of grant.

STOCK OPTIONS

The Oil-Dri Corporation of America 2006 Long Term Incentive Plan (“2006 Plan”) permits the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based and cash-based awards. Our employees and outside directors are eligible to receive grants under the 2006 Plan. The total number of shares of stock subject to grants under the 2006 Plan may not exceed 937,500. Stock options have been granted to our outside directors with a vesting period of one year and stock options granted to employees generally vest 25% two years after the grant date and in each of the three following anniversaries of the grant date. In addition, shares of restricted stock have been issued under the 2006 Plan as described in the restricted stock section below. As of July 31, 2018, there were 366,658 shares available for future grants under this plan.

A summary of stock option transactions under the plans is shown below.



	Number of Shares (in thousands)		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Options outstanding and exercisable at July 31, 2016	10		$	17.00	0.3	$	205
Exercised	(10	)	$	17.00		$	211
Options outstanding and exercisable at July 31, 2017	—		$	—		$	—
Options outstanding and exercisable at July 31, 2018	—		$	—		$	—

The amount of cash received from the exercise of options during fiscal year 2017 was $170,000 and the related tax benefit was $80,000.

The related compensation expense was recognized over the period from the date of grant to the date when the award is no longer contingent on the employee providing additional service to us. No stock-based compensation expense related to stock options was recognized during either fiscal year 2018 or 2017.

RESTRICTED STOCK

All non-vested restricted stock as of July 31, 2018 was issued under the 2006 Plan with vesting periods generally from two to five years.

A summary of restricted stock transactions under the plans is shown below.



	Number of Shares (in thousands)		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term (Years)	Unamortized Expense (in thousands)
Non-vested restricted stock outstanding at July 31, 2016	194		$	29.09	3.8	$	4,282
Granted	31		$	36.84
Vested	(39	)	$	26.38
Forfeited	(1	)	$	31.24
Non-vested restricted stock outstanding at July 31, 2017	185		$	30.96	2.8	$	3,893
Granted	27		$	42.59
Vested	(28	)	$	29.88
Forfeited	(6	)	$	35.90
Non-vested restricted stock outstanding at July 31, 2018	178		$	32.74	1.7	$	3,050

Stock-based compensation for restricted stock of $1,349,000 and $934,000, net of related tax effect, was recognized in fiscal years 2018 and 2017, respectively. The total restricted stock compensation related tax benefit was $426,000 and $573,000 in fiscal years 2018 and 2017, respectively.