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, stock options, 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 May 31, 2018, the Company has approximately 1,264,299 shares available 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 of our non-vested restricted stock unit awards for the three months ended May 31, 2018 is as follows:



	Restricted Stock Units		Weighted Average Grant Date Fair Value
Non-vested balance as of February 28, 2018	109,777		$	56.62
Granted	82,371		42.00
Vested	(36,730	)	54.64
Forfeited	(5,228	)	57.19
Non-vested balance as of May 31, 2018	150,190		$	49.07

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 of our non-vested performance share unit awards for the three months ended May 31, 2018 is as follows:



	Performance Stock Units		Weighted Average Grant Date Fair Value
Non-vested balance as of February 28, 2018	70,030		$	54.59
Granted	46,183		42.00
Vested	(3,378	)	46.65
Forfeited	(27,109	)	49.28
Non-vested balance as of May 31, 2018	85,726		$	49.80

Stock Appreciation Rights

Stock appreciation rights 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 three 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 activity for the three months ended May 31, 2018 is as follows:



	SARs		Weighted Average Exercise Price
Outstanding as of February 28, 2018	148,513		$	43.29
Granted	—		—
Exercised	(4,078	)	44.42
Forfeited	—		—
Outstanding as of May 31, 2018	144,435		$	43.26
Exercisable as of May 31, 2018	144,435		$	43.26

The average remaining contractual term for those stock appreciation rights outstanding at May 31, 2018 is 2.43 years, with an aggregate intrinsic value of $0.2 million. The average remaining contractual terms for those stock appreciation rights that are exercisable as of May 31, 2018 is 2.43 years, with an aggregate intrinsic value of $0.2 million.

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. The fair value of the estimated number of shares to be issued under each offering is determined using the Black-Scholes option-pricing model. For the three months ended May 31, 2018, the Company issued 37,224 shares under the Employee Stock Purchase Plan.

Share-based Compensation Expense

Share-based compensation expense and related income tax benefits related to all the plans listed above were as follows (in thousands):



	Three Months Ended May 31,
	2018		2017
Compensation expense	$	1,358	$	1,194
Income tax benefits	$	306	$	382

Unrecognized compensation cost related to restricted stock units, performance share unit awards, stock appreciation rights, and the employee stock purchase plan at May 31, 2018 totals $10.4 million.

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.