Stock-Based Compensation

The Company has various stock-based compensation plans. During the quarter ended October 31, 2015, the Board of Directors of the Company approved grants of a total of 6,300 service-based restricted stock units (RSUs) to non-employee directors. The service-based RSUs vest daily through the end of the two-year vesting period as long as the recipient continuously remains a member of the Board, and entitle the recipient to receive one share of the Company's common stock per unit granted. During the six-months ended October 31, 2015, the Board of Directors of the Company also approved grants of non-statutory stock options and service-based and performance-based RSUs to key employees. The employee non-statutory stock option grants totaled 30,700 shares of the Company’s common stock with an exercise price of $57.11 per share. The options vest evenly over a three-year period and have a ten-year contractual term. The employee performance-based RSUs totaled 48,201 units and the employee service-based RSUs totaled 16,049 units. The performance-based RSUs entitle the recipients to receive one share of the Company’s common stock per unit granted if applicable performance conditions are met and the recipient remains continuously employed with the Company until the units vest. The service-based RSUs entitle the recipients to receive one share of the Company’s common stock per unit granted if they remain continuously employed with the Company until the units vest. All of the Company’s RSUs granted to employees cliff-vest three years from the grant date.

For the three- and six-month periods ended October 31, 2015 and 2014, stock-based compensation expense was allocated as follows:



	Three Months Ended October 31,				Six Months Ended October 31,
(in thousands)	2015		2014		2015		2014
Cost of sales and distribution	$	141	$	127	$	299	$	282
Selling and marketing expenses	250		216		530		473
General and administrative expenses	441		478		966		1,009
Stock-based compensation expense	$	832	$	821	$	1,795	$	1,764

During the six months ended October 31, 2015, the Board of Directors of the Company also approved grants of 7,616 cash-settled performance-based restricted stock tracking units (RSTUs) and 2,499 cash-settled service-based RSTUs for more junior level employees. Each performance-based RSTU entitles the recipient to receive a payment in cash equal to the fair market value of a share of the Company's common stock as of the payment date if applicable performance conditions are met and the recipient remains continuously employed with the Company until the units vest. The service-based RSTUs entitle the recipients to receive a payment in cash equal to the fair market value of a share of the Company's common stock as of the payment date if they remain continuously employed with the Company until the units vest. All of the RSTUs cliff-vest three years from the grant date. Since the RSTUs will be settled in cash, the grant date fair value of these awards is recorded as a liability until the date of payment. The fair value of each cash-settled RSTU award is remeasured at the end of each reporting period and the liability is adjusted, and related expense recorded, based on the new fair value. The Company recognized expense of $220 thousand and $115 thousand for the three-month periods ended October 31, 2015 and 2014, respectively, and $501 thousand and $164 thousand for the six-month periods ended October 31, 2015 and 2014, respectively, related to RSTUs. A liability for payment of the RSTUs is included in the Company's balance sheets in the amount of $921 thousand and $420 thousand as of October 31, 2015 and April 30, 2015, respectively.