2.  STOCK BASED COMPENSATION

The Company maintains stock equity incentive plans under which the Company grants non-qualified stock options, stock appreciation rights, stock awards, performance awards, or stock units to employees, directors and consultants.

Stock Option Compensation Expense

The compensation cost for stock options granted to employees and directors is measured at the grant date, based on the fair value of the award using the Black-Scholes pricing model, and is recognized as an expense, on a straight-line basis, over the requisite service period (the vesting period of the stock option) which is one to ten years. We recorded stock-based compensation expense, related to stock options granted to employees and directors, of approximately $570,000 and $1,671,000 during the nine months ended July 31, 2016 and 2015, respectively, and approximately $240,000 and $445,000 during the three months ended July 31, 2016 and 2015, respectively.

The compensation cost for stock options granted to consultants is measured based on fair value at each reporting period, using the Black-Scholes pricing model, and is recognized as an expense over the requisite service period of the grant. We recorded stock-based compensation expense, related to stock options granted to consultants, of approximately $-0- and $668,000 during the nine months ended July 31, 2016 and 2015, respectively, and approximately $-0- and $335,000 during the three months ended July 31, 2016 and 2015, respectively.

Stock Option Activity

During the nine months ended July 31, 2016 and 2015, we granted options to purchase 545,000 shares and 60,400 shares of common stock, respectively, to employees and directors at weighted average exercise prices of $2.92 and $2.91 per share, respectively, pursuant to the ITUS Corporation 2010 Share Incentive Plan (the "2010 Share Plan”).  During the nine months ended July 31, 2016, stock options to purchase 9,080 shares of common stock were exercised with aggregate proceeds of approximately $23,000. During the nine months ended July 31, 2015, stock options to purchase 13,334 shares of common stock were exercised with aggregate proceeds of approximately $34,000.  

Stock Option Plans

As of July 31, 2016, we have two stock option plans:  the ITUS Corporation 2003 Share Incentive Plan (the "2003 Share Plan") and the 2010 Share Plan, which were adopted by our Board of Directors on April 21, 2003 and July 14, 2010, respectively.  

The 2003 Share Plan provided for the grant of nonqualified stock options, stock appreciation rights, stock awards, performance awards and stock units to key employees, directors and consultants.  In accordance with the provisions of the 2003 Share Plan, the plan terminated with respect to the ability to grant future options on July 31, 2013. Information regarding the 2003 Share Plan for the nine months ended July 31, 2016 is as follows:

The following table summarizes information about stock options outstanding and exercisable under the 2003 Share Plan as of July 31, 2016:

The 2010 Share Plan provides for the grant of nonqualified stock options, stock appreciation rights, stock awards, performance awards and stock units to key employees, directors and consultants.  As of July 31, 2016, the 2010 Share Plan had 443,955 shares available for future grants.  Information regarding the 2010 Share Plan for the nine months ended July 31, 2016 is as follows:

The following table summarizes information about stock options outstanding and exercisable under the 2010 Share Plan as of July 31, 2016:

In addition to options granted under the 2003 Share Plan and the 2010 Share Plan, the Board of Directors approved the grant of stock options to purchase 1,780,000 shares.  Information regarding stock options outstanding that were not granted under the 2003 Plan or the 2010 Plan for the nine months ended July 31, 2016 is as follows:

The following table summarizes information about stock options outstanding and exercisable that were not granted under the 2003 Share Plan or the 2010 Share Plan as of July 31, 2016:

Stock Awards

We account for stock awards granted to employees and consultants based on the grant date market price of the underlying common stock.  During the nine months ended July 31, 2016 and 2015, we issued 9,795 shares and 11,600 shares, respectively, of common stock to consultants for services rendered.  We recorded consulting expense for the nine months ended July 31, 2016 and 2015 of approximately $28,000 and $46,000, respectively, for the shares of common stock issued to consultants.