8. Stock and Stock Option Plans

The Company has stock option and employee incentive plans that provide for the granting of options to purchase or the issuance of shares of common stock at a price fixed by the Board of Directors or a committee. As of October 31, 2013, there were 232,892 shares which remain available to be granted under the plans. The Company has the ability to issue shares under the plans either from new issuances or from treasury, although it has previously always issued new shares and expects to continue to issue new shares in the future. The Company granted 22,289 restricted stock units under the Layne Christensen Company 2006 Equity Incentive Plan during the nine months ended October 31, 2013. The Company also granted 80,613 performance vesting shares under the Layne Christensen Company 2006 Equity Incentive Plan during the nine months ended October 31, 2013. The grants consist of both service based awards and market based awards.

The Company recognized compensation cost for these share-based plans of $0.5 million and $0.8 million for the three months ended October 31, 2013 and 2012, respectively, and $2.5 million and $3.1 million of compensation cost for these share-based plans during the nine months ended October 31, 2013 and 2012, respectively. Of these amounts, $1.1 million and $1.4 million, respectively, related to nonvested stock. The total income tax benefit recognized for share-based compensation arrangements was $1.0 million and $1.2 million for the nine months ended October 31, 2013 and 2012, respectively.

A summary of nonvested share activity for the nine months ended October 31, 2013, is as follows:


	Number of Shares			Average Grant Date Fair Value		Intrinsic Value (in thousands)
Nonvested stock at February 1, 2013		275,666		$	27.41	$	5,905
Granted - Directors		4,744			21.08
Granted - Restricted stock units		22,289			20.96
Granted - Performance vesting shares		80,613			14.61
Vested		(10,065	)		27.21
Canceled		(8,099	)		20.89
Forfeitures		(22,808	)		17.88

Nonvested stock at October 31, 2013		342,340			24.83	$	6,621

Options outstanding at October 31, 2013, related exercise price and remaining contractual term were as follows:


Grant Date	Options Outstanding		Options Exercisable		Exercise Price		Remaining Contractual Term (Months)
6/04		20,000		20,000	$	16.60		8
6/04		38,076		38,076		16.65		8
6/05		10,000		10,000		17.54		20
9/05		90,957		90,957		23.05		23
1/06		118,750		118,750		27.87		27
6/06		80,000		80,000		29.29		32
6/07		65,625		65,625		42.26		44
7/07		15,500		15,500		42.76		45
2/08		62,463		62,463		35.71		51
1/09		6,000		6,000		24.01		62
2/09		105,141		105,138		15.78		63
2/09		4,580		4,580		15.78		63
6/09		87,784		87,784		21.99		67
6/09		2,472		2,472		21.99		67
2/10		66,440		66,440		27.79		75
2/10		2,721		2,721		25.44		75
2/11		83,100		59,342		33.10		87
3/11		1,312		874		34.50		89
6/11		2,096		1,397		28.71		91
7/11		17,893		11,927		29.31		93
2/12		168,930		79,771		24.32		99
4/12		27,135		9,030		21.77		101
7/12		4,708		1,553		20.89		104
8/12		9,554		3,152		20.56		105
4/13		190,234		45,613		21.08		113
5/13		14,952		—		20.40		114
9/13		8,648		—		19.49		118

		1,305,071		989,165

All options were granted at an exercise price equal to the fair market value of the Company’s common stock at the date of grant. The weighted average fair value at the date of grant for the options granted was $8.15 and $10.93 for the nine months ended October 31, 2013 and 2012, respectively. The fair value was based on a weighted average exercise multiple of 2.15, a post-vesting weighted average forfeiture assumption of 2.51%, no dividend yield, an average risk-free rate of 1.09% and 1.32%, respectively, and assumed average volatility of all options outstanding are expected to be 43.47%. The options have terms of ten years from the date of grant and generally vest ratably over periods of one month to five years.

Transactions for stock options for the nine months ended October 31, 2013, were as follows:


	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Intrinsic Value (in thousands)
Outstanding at February 1, 2013		1,285,303		$	25.97		5.5	$	1,784
Granted		218,176			20.97
Exercised		(72,611	)		15.96
Forfeited		(125,797	)		28.67

Outstanding at October 31, 2013		1,305,071			25.43		5.6		566

Exercisable at February 1, 2013		965,750			25.95		4.5		1,710
Exercisable at October 31, 2013		989,165			26.20		4.6		566

The aggregate intrinsic value was calculated using the difference between the current market price and the exercise price for only those options that have an exercise price less than the current market price.