The Company recognizes compensation expense for all stock-based awards based on the grant date fair value of the award. Stock-based awards consist primarily of non-qualified stock options, performance-based awards, restricted stock awards and restricted stock units. Grants related to restricted stock awards and restricted stock units are immaterial. The Company issues treasury shares for stock options and performance-based awards.

The exercise price of options granted is equal to the market price of the Company’s common stock at the date of the grant. Options are generally exercisable for up to 10 years from the date of grant and vest in equal increments over three years.

Pretax stock-based compensation expense associated with options was $7.5 million and $6.9 million for the three months ended October 31, 2022 and 2021, respectively.

Fair value is calculated using the Black-Scholes option pricing model. The weighted average fair value for options granted was $15.50 and $14.24 per share during the three months ended October 31, 2022 and 2021, respectively.


	Options	Weighted Average Exercise Price
Balance outstanding as of July 31, 2022	6,927,161	$	46.32
Granted	875,900	50.89
Exercised	(175,631)	36.60
Expired/forfeited	(27,660)	53.69
Balance outstanding as of October 31, 2022	7,599,770	$	47.04

Performance-based awards are payable in common stock and are based on a formula that measures Company performance over a three year period. These awards are settled after three years with payouts ranging from 0% to 200% of the target award depending on achievement.

Pretax performance-based awards expense was $1.8 million and $1.7 million for the three months ended October 31, 2022 and 2021, respectively.


	Performance Shares	Weighted Average Grant Date Fair Value
Balance outstanding as of July 31, 2022	188,206	$	52.20
Granted	113,100	50.89
Vested	—	—
Forfeited	—	—
Balance outstanding as of October 31, 2022	301,306	$	51.71