NOTE I — STOCKHOLDERS’ EQUITY

Share Repurchase Program

The Company’s Board of Directors has authorized a share repurchase program of 5,000,000 shares. The timing and actual number of shares repurchased, if any, will depend on a number of factors, including market conditions and prevailing stock prices, and are subject to compliance with certain covenants contained in the loan agreement. Share repurchases may take place on the open market, in privately negotiated transactions or by other means, and would be made in accordance with applicable securities laws.

During fiscal 2019, pursuant to this program, the Company acquired 723,072 of its shares of common stock for an aggregate purchase price of $20.3 million. The Company did not repurchase any shares during fiscal 2018.

Long-Term Incentive Plan

As of January 31, 2019, the Company had 717,381 shares available for grant under its long-term incentive plan. The plan provides for the grant of equity and cash awards, including restricted stock awards, stock options and other stock unit awards to directors, officers and employees. Restricted stock unit awards generally vest over a two to five year period and certain awards also include (i) market price performance conditions that provide for the award to vest only after the average closing price of the Company’s stock trades above a predetermined market level and (ii) another performance condition that requires the achievement of an operating performance target. It is the Company’s policy to grant stock options at prices not less than the fair market value on the date of the grant. Option terms, vesting and exercise periods vary, except that the term of an option may not exceed ten years.

Restricted Stock Units


		Weighted Average
	Awards	Grant Date
	Outstanding	Fair Value
Unvested as of January 31, 2016	2,048,883	$	30.79
Granted	630,642	$	25.82
Vested	(678,164)	$	22.43
Canceled	(2,500)	$	17.95
Unvested as of January 31, 2017	1,998,861	$	31.70
Granted	279,479	$	16.28
Vested	(495,372)	$	26.39
Canceled	(10,391)	$	28.42
Unvested as of January 31, 2018	1,772,577	$	29.51
Granted	529,253	$	32.34
Vested	(451,929)	$	27.49
Canceled	(28,282)	$	29.23
Unvested as of January 31, 2019	1,821,619	$	30.83

For restricted stock units with market conditions, the Company estimates the grant date fair value using a Monte Carlo simulation model. This valuation methodology utilizes the closing price of the Company’s common stock on grant date and several key assumptions, including expected volatility of the Company’s stock price, and risk-free rates of return. This valuation is performed with the assistance of a third party valuation specialist. For restricted stock units with no performance conditions, grant date fair value is based on the market price on the date of grant.

The Company recognized $19.7 million, $19.7 million and $16.9 million in share-based compensation expense for the years ended January 31, 2019, 2018 and 2017, respectively, related to restricted stock unit grants. At January 31, 2019, 2018 and 2017, unrecognized costs related to the restricted stock units totaled $19.4 million, $23.0 million and $40.7 million, respectively.

Stock Options


	2019			2018			2017
		Weighted			Weighted			Weighted
		Average			Average			Average
	Shares	Exercise		Shares	Exercise		Shares	Exercise
Stock options outstanding at beginning of year	62,666	$	11.50	251,131	$	9.16	331,651	$	10.59
Exercised	(15,600)	$	6.55	(188,465)	$	8.38	(20,520)	$	12.65
Granted	8,245	$	30.32	—	$	—	—	$	—
Cancelled or forfeited	—	$	—	—	$	—	(60,000)	$	15.87
Stock options outstanding at end of year	55,311	$	15.70	62,666	$	11.50	251,131	$	9.16
Exercisable	47,066	$	13.14	62,666	$	11.50	251,131	$	9.16

The following table summarizes information about stock options outstanding:


	Number	Weighted	Weighted		Number	Weighted
	Outstanding as of	Average	Average		Exercisable as of	Average
	January 31,	Remaining	Exercise		January 31,	Exercise
Range of Exercise Prices	2019	Contractual Life	Price		2019	Price
$5.55 - $9.20	10,000	0.26	$	6.57	10,000	$	6.57
$12.51 - $17.45	27,066	1.52	$	13.73	27,066	$	13.73
$18.11 - $30.32	18,245	3.51	$	23.63	10,000	$	18.11
	55,311				47,066

The fair value of stock options was estimated using the Black-Scholes option-pricing model. This model requires the input of subjective assumptions that will usually have a significant impact on the fair value estimate. The Company granted 8,245 stock options during the year ended January 31, 2019. No stock options were granted during the years ended January 31, 2018 and 2017.

The following table summarizes the assumptions used in the Black-Scholes option-pricing model for grants in fiscal 2019:



	2019
Weighted-average risk free rate of interest		2.5	%
Expected volatility		51.2	%
Weighted-average expected award life (in years)		2.25
Dividend yield		0	%
Weighted-average fair value	$	9.68

The weighted average volatility was developed using historical volatility for periods equal to the expected term of the options.

The risk-free interest rate was developed using the U.S. Treasury yield curve for periods equal to the expected term of the options on the grant date. An increase in the risk-free interest rate will increase stock compensation expense.

The dividend yield is a ratio that estimates the expected dividend payments to shareholders. The Company has not declared a cash dividend and has estimated dividend yield at 0%.

The expected term of stock option grants was developed after considering vesting schedules, life of the option, and historical experience. An increase in the expected holding period will increase stock compensation expense.

The Company accounts for forfeited awards as they occur as permitted by ASU 2016‑09. Ultimately, the actual expense recognized over the vesting period will be for those shares that vest.

The weighted average remaining term for stock options outstanding was 1.9 years at January 31, 2019. The aggregate intrinsic value at January 31, 2019 was $1.1 million for stock options outstanding and $1.0 million for stock options exercisable. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of the Company’s common stock as of January 31, 2019, the reporting date.

Proceeds received from the exercise of stock options were $0.1 million and $1.6 million during the years ended January 31, 2019 and 2018, respectively. The intrinsic value of stock options exercised was $0.4 million and $3.6 million for the years ended January 31, 2019 and 2018, respectively. A portion of this amount is currently deductible for tax purposes.

The Company recognized a nominal amount and $0.1 million in compensation expense for the year ended January 31, 2019 and 2017, respectively, related to stock options. No compensation expense related to stock options was recognized for the year ended January 31, 2018.