7. Equity-Based Compensation

We have equity-based compensation plans for Directors and certain employees 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. As of July 31, 2016, there were 86,479 shares which remained available to be granted under the plans. We have the ability to issue shares under the plans either from new issuances or from treasury, although we have previously always issued new shares and expect to continue to issue new shares in the future. We granted 13,495 shares of restricted stock, 199,352 restricted stock units and 447,903 performance vesting restricted stock units under the Layne Christensen Company 2006 Equity Incentive Plan during the six months ended July 31, 2016. The grants consist of both service-based awards and market-based awards. We also granted a total of 134,433 stock options during the six months ended July 31, 2016 under the Layne Christensen Company 2006 Equity Incentive Plan.

We recognized compensation cost for equity-based compensation arrangements of $0.8 million and $2.1 million for the three and six months ended July 31, 2016, respectively, and $0.7 million and $2.4 million for the three and six months ended July 31, 2015, respectively. The total income tax benefit recognized for equity-based compensation arrangements were $0.3 million and $0.8 million for the three and six months ended July 31, 2016, respectively, and $0.3 million and $0.9 million for the three and six months ended July 31, 2015, respectively. As of July 31, 2016, no tax benefit is expected to be realized for equity-based compensation arrangements due to a full valuation allowance of our domestic deferred tax assets.

As of July 31, 2016, total unrecognized compensation cost related to unvested stock options was approximately $0.3 million, which is expected to be recognized over a weighted-average period of 1.3 years. As of July 31, 2016, there was approximately $5.3 million of total unrecognized compensation cost related to nonvested restricted stock awards and restricted stock units that is expected to be recognized over a weighted-average period of 1.9 years.

A summary of nonvested share activity for the six months ended July 31, 2016, is as follows:

	Number of Shares			Weighted Average Grant Date Fair Value		Intrinsic Value (in thousands)
Nonvested stock at February 1, 2016		1,407,170		$	5.20	$	7,205
Granted - Director's restricted stock		13,495			7.04
Granted - Restricted stock units		199,352			7.04
Granted - Performance vesting shares		447,903			4.70
Vested		(26,349	)		6.22
Forfeitures		(94,368	)		10.79
Nonvested stock at July 31, 2016		1,947,203		$	5.00	$	15,578

A summary of stock option activity for the six months ended July 31, 2016, is as follows:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Intrinsic Value (in thousands)
Outstanding at February 1, 2016		839,715		$	17.61		7.1	$	—
Granted		134,433			7.04
Expired		(10,000	)		29.29
Forfeited		(27,157	)		23.20
Outstanding at July 31, 2016		936,991		$	15.81		6.9	$	399
Exercisable at February 1, 2016		576,871		$	19.00		6.5
Exercisable at July 31, 2016		771,869		$	16.80		6.7	$	399

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.

The fair value of equity-based compensation granted in the form of stock options is determined using a lattice valuation model. The valuations were made using the assumptions noted in the following table. Expected volatilities are based on historical volatility of the stock price. We use historical data to estimate early exercise and post-vesting forfeiture rates to be applied within the valuation model. The risk-free interest rate for the periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The weighted-average fair value per share at the date of grant for options granted during the six months ended July 31, 2016 was $1.59.

Assumptions:	2016
Weighted-average expected volatility		56.1%
Expected dividend yield		0.0%
Risk-free interest rate		0.6%
Expected term (in years)		1.9
Exercise multiple factor		1.4
Post-vesting forfeiture		20.3%

Nonvested stock awards having service requirements only, are valued as of the grant date closing stock price and generally vest ratably over service periods of one to five years. Other nonvested stock awards vest based upon Layne meeting various performance goals. Certain nonvested stock awards provide for accelerated vesting if there is a change of control (as defined in the plans) or the disability or the death of the executive and for equitable adjustment in the event of changes in our equity structure. We granted certain performance based nonvested stock awards during the six months ended July 31, 2016, which were valued using a Monte Carlo simulation model.

Assumptions used in the Monte Carlo simulation model for the six months ended July 31, 2016 were as follows:

Assumptions:	2016
Weighted-average fair value		4.7%
Weighted-average expected volatility		58.3%
Expected dividend yield		0.0%
Weighted-average risk free rate		0.9%