Share-based compensation

The Company has one share-based compensation plan, the 2014 Long Term Incentive Plan (the “Plan”). The purpose of the Plan is to promote the growth and prosperity of the Company by permitting the Company to grant to its employees, directors and advisors various types of restricted stock unit awards, performance share units, and stock appreciation rights to purchase common stock of the Company. The maximum number of shares that may be issued under the Plan is 1,500,000 shares. As of February 28, 2017, the Company had approximately 1,270,511 shares reserved for future issuance under the Plan.

Restricted Stock Unit Awards

Restricted stock unit awards are valued at the market price of our common stock on the grant date. Awards issued prior to fiscal 2015 generally have a three year cliff vesting schedule and awards issued subsequent to fiscal 2015 generally vest ratably over a period of three years but these awards may vest early in accordance with the Plan’s accelerated vesting provisions.

The activity in our non-vested restricted stock unit awards for the year ended February 28, 2017 is as follows:



	Restricted Stock Units		Weighted Average Grant Date Fair Value
Non-Vested Balance as of February 29, 2016	98,693		$	45.03
Granted	73,921		56.66
Vested	(35,330	)	45.82
Forfeited	(2,737	)	50.71
Non-Vested Balance as of February 28, 2017	134,547		$	51.10

The total fair value of restricted stock units vested during fiscal years 2017, 2016, and 2015 was $1.6 million, $0.9 million and $0.8 million, respectively. For fiscal years 2017, 2016 and 2015, there were 134,547, 98,693 and 77,446, respectively, of non-vested restricted stock units outstanding with weighted average grant date fair values of $51.10, $45.03 and $41.31, respectively.

Performance Share Unit Awards

Performance share unit awards are valued at the market price of our common stock on the grant date. These awards have a three year performance cycle and will vest and become payable, if at all, on the third anniversary of the award date. The awards are subject to the Company’s degree of achievement of a target annual average adjusted return on assets during these three year periods. In addition, a multiplier may be applied to the total awards granted which is based on the Company’s total shareholder return during such three year period in comparison to a defined specific industry peer group as set forth in the plan.

The activity in our non-vested performance stock unit awards for the year ended February 28, 2017 is as follows:



	Performance Stock Units	Weighted Average Grant Date Fair Value
Non-Vested Balance as of February 29, 2016	27,415	$	46.65
Granted	24,011	57.47
Vested	—	—
Forfeited	—	—
Non-Vested Balance as of February 28, 2017	51,426	$	51.70

Stock Appreciation Rights

Stock appreciation rights awards are granted with an exercise price equal to the market value of our common stock on the date of grant. These awards generally have a contractual term of 7 years and vest ratably over a period of 3 years although some may vest immediately on issuance. These awards are valued using the Black-Scholes option pricing model.

A summary of the Company’s stock appreciation rights awards activity for the years ended February 28, 2017, February 29, 2016 and February 28, 2015 is as follows:



	2017				2016				2015
	SAR’s		Weighted Average Exercise Price		SAR’s		Weighted Average Exercise Price		SAR’s		Weighted Average Exercise Price
Outstanding at beginning of year	312,748		$	34.23	376,982		$	31.27	396,174		$	26.64
Granted	—		—		—		—		126,532		43.92
Exercised	(141,983	)	24.85		(59,441	)	14.67		(98,942	)	22.79
Forfeited	(626	)	43.92		(4,793	)	44.56		(46,782	)	44.14
Outstanding at end of year	170,139		$	42.02	312,748		$	34.23	376,982		$	31.27
Exercisable at end of year	126,975		$	41.27	217,961		$	29.83	204,107		$	21.55
Weighted average fair value for the fiscal year indicated of SARs granted during such year			$	—			$	—			$	16.94

The average remaining contractual term for those stock appreciation rights outstanding as of February 28, 2017 was 3.52 years, with an aggregate intrinsic value of $2.8 million. The average remaining contractual terms for those stock appreciation rights that are exercisable as of February 28, 2017 was 3.38 years, with an aggregate intrinsic value of $2.2 million.

The following table summarizes additional information about stock appreciation rights outstanding at February 28, 2017.



Range of Exercise Prices	Total SAR’s	Average Remaining Life	Weighted Average Exercise Price		SAR’s Currently Exercisable	Weighted Average Exercise Price
$20.91	9,954	1.00	$	20.91	9,954	$	20.91
$25.67	9,538	2.00	$	25.67	9,538	$	25.67
$39.65	950	3.52	$	39.65	950	$	39.65
$43.92	89,180	4.01	$	43.92	56,016	$	43.92
$45.26	40,000	3.68	$	45.26	30,000	$	45.26
$45.36	19,758	3.00	$	45.36	19,758	$	45.36
$46.43	759	3.72	$	46.43	759	$	46.43
$20.91 - $46.43	170,139	3.52	$	42.02	126,975	$	41.27

The Company is no longer issuing SAR's as a form of share-based compensation, therefore the Black-Scholes option pricing model was not used subsequent to fiscal 2015. Assumptions used in the Black-Scholes option pricing model for fiscal year 2015 are as follows for all stock appreciation rights:



		2015
Expected term in years		4.5
Expected dividend yield		1.20% – 1.32%
Expected price volatility		35.39% – 40.00%
Risk-free interest rate		2.32 – 2.73

Directors Grants

The Company granted each of its independent directors a total of 1,641, 1,915 and 2,000 shares of its common stock during fiscal years 2017, 2016 and 2015, respectively. These common stock grants were valued at $60.94, $52.21 and $44.90 per share for fiscal years 2017, 2016 and 2015, respectively, which was the market price of our common stock on the respective grant dates.

Employee Stock Purchase Plan

The Company also has an employee stock purchase plan, which allows employees of the Company to purchase common stock of the Company through accumulated payroll deductions. Offerings under this plan have a duration of 24 months (the "offering period"). On the first day of an offering period (the “enrollment date”) the participant is granted the option to purchase shares on each exercise date at the lower of 85% of the market value of a share of our common stock on the enrollment date or the exercise date. The participant’s right to purchase common stock under the plan is restricted to no more than $25,000 per calendar year and the participant may not purchase more than 5,000 shares during any offering period. Participants may terminate their interest in a given offering or a given exercise period by withdrawing all of their accumulated payroll deductions at any time prior to the end of the offering period.

Share-based compensation expense and related income tax benefits related to all the plans listed above were as follows for the fiscal years ended February 28, 2017, February 29, 2016 and February 28, 2015:



Year ended	2017		2016		2015
	(In thousands)
Compensation expense	$	5,870	$	4,538	$	4,080
Income tax benefits	$	2,055	$	1,588	$	1,428

Unrecognized compensation cost related to all the above at February 28, 2017 totaled $6.8 million. These costs are expected to be recognized over a weighted period of 1.91 years.

The actual tax benefit realized for tax deductions from share-based compensation during each of these fiscal years totaled $1.5 million, $1.0 million and $0.3 million, respectively.

The Company’s policy is to issue shares required under these plans from the Company’s treasury shares or from the Company’s authorized but unissued shares. The Company has no formal or informal plan to repurchase shares on the open market to satisfy these requirements.