Share-Based Payments

12 Months Ended

Apr. 30, 2020

Share-based Payment Arrangement [Abstract]

Note 13: Share-Based Payments

We provide for equity-based incentives to be awarded to key employees and non-employee directors. Currently, these incentives consist of restricted shares, restricted stock units (which may also be referred to as deferred stock units), performance units, and stock options. These awards are administered primarily through the 2010 Equity and Incentive Compensation Plan initially approved by our shareholders in August 2010 and re-approved in August 2015. Awards under this plan may be in the form of stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares, performance units, incentive awards, and other share-based awards. Awards under this plan may be granted to our non-employee directors, consultants, officers, and other employees. Deferred stock units granted to non-employee directors vest immediately and, along with dividends credited on those deferred stock units, are paid out in the form of common shares upon termination of service as a non-employee director. At April 30, 2020, there were 4,781,736 shares available for future issuance under this plan.

Under the 2010 Equity and Incentive Compensation Plan, we have the option to settle share-based awards by issuing common shares from treasury, issuing new Company common shares, or issuing a combination of common shares from treasury and new Company common shares.

Stock Options: Under the 2010 Equity and Incentive Compensation Plan, we granted 193,831 options during 2020 and granted no stock options during 2019 and 2018. Stock options granted in 2020 vest ratably over a period of three years. The exercise price of all stock options granted was equal to the market value of the shares on the date of grant, and all stock options granted and outstanding have a contractual term of 10 years.

The fair value of each stock option is estimated on the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions for stock options granted in 2020:


	2020
Expected volatility (%)	20.1	%
Dividend yield (%)	2.8	%
Risk-free interest rate (%)	1.9	%
Expected life of stock options (years)	6.0

Expected volatility was calculated in accordance with the provisions of FASB ASC 718, Compensation – Stock Compensation, based on consideration of both historical and implied volatilities. The expected life of a stock option represents the period from the grant date through the expected exercise date of the option. This was calculated using a simplified method whereby the midpoint between the vesting date and the end of the contractual term is utilized to compute the expected term.

The following table is a summary of our stock option activity.


	Number of Stock Options	Weighted-Average Exercise Price
Outstanding at May 1, 2019	400,000	$	113.24
Granted	193,831	121.93
Exercised	(62,750)	111.66
Cancelled	(42,026)	120.67
Outstanding at April 30, 2020	489,055	$	116.25
Exercisable at April 30, 2020	314,750	$	113.21

The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the stock option. The total intrinsic value for stock options outstanding and exercisable was $1.0 and $0.8 at

April 30, 2020, respectively, with an average remaining contractual term of 6.5 years and 5.0 years, respectively. The total intrinsic value of stock options exercised during 2020 and 2018 was $0.2 and $0.6, respectively, and there were no stock options exercised in 2019. The closing market price of our common stock on the last trading day of 2020 was $114.91 per share. The stock options granted during 2020 have a weighted-average grant date fair value of $17.82 per option.

Compensation cost related to stock options is recognized ratably over the service period from the grant date through the end of the requisite service period. During 2020, we recognized compensation cost of $1.3, and during 2019, we did not recognize

any compensation cost, as the requisite service period for the previous options granted ended on April 30, 2018. The compensation expense for stock option awards totaled $0.4 for the year ended April 30, 2018, which was included in other special project costs in the Statement of Consolidated Income. The tax benefit related to the stock option expense was $0.3 and $0.1 for 2020 and 2018, respectively. As of April 30, 2020, we had unrecognized compensation cost of $1.8 related to the stock options that were granted in 2020.

Cash received from stock option exercises was $7.1 and $3.9 for the years ended April 30, 2020 and 2018, respectively.

There were no stock options exercised in 2019.

Other Equity Awards: The following table is a summary of our restricted shares, deferred stock units, and performance units.


	Restricted Shares and Deferred Stock Units	Weighted- Average Grant Date Fair Value		Performance Units	Weighted- Average Conversion Date Fair Value
Outstanding at May 1, 2019	583,576	$	118.44	85,154	$	123.68
Granted	245,945	121.19		168,212	123.68
Converted	85,154	123.68		(85,154)	123.68
Vested	(123,714)	119.13		—	—
Forfeited	(54,277)	117.30		(14,995)	123.68
Outstanding at April 30, 2020	736,684	$	119.93	153,217	$	123.68

The weighted-average grant date fair value of equity awards other than stock options that vested in 2020, 2019, and 2018 was $14.7, $17.0, and $17.1, respectively. The vesting date fair value of equity awards other than stock options that vested in 2020, 2019, and 2018 was $14.5, $17.0, and $20.7, respectively. The weighted-average grant date fair value of restricted shares, deferred stock units, and performance units is the average of the high and the low share price on the date of grant. The following table summarizes the weighted-average fair values of the equity awards granted.


Year Ended April 30,	Restricted Shares and Deferred Stock Units	Weighted- Average Grant Date Fair Value		Performance Units	Weighted- Average Conversion Date Fair Value
2020	245,945	$	121.19	168,212	$	123.68
2019	194,932	104.33		85,154	123.68
2018	136,127	126.80		84,051	103.86

The restricted shares and deferred stock units granted in 2020 under our new long-term incentive compensation program vest ratably over a three-year period from date of grant. The remaining restricted shares and deferred stock units generally vest over four years from the date of grant or upon the attainment of a defined age and years of service, subject to certain retention requirements. The performance units granted in 2020 vest over three years from the date of grant and are converted to restricted shares upon vest based on the performance achieved during the service period. During 2019 and 2018, the performance units granted represented the number of restricted shares received by certain executive officers, subsequent to year-end, upon conversion of the performance units earned during the one year period.