8. COMPENSATION PLANS

9 Months Ended

Jul. 31, 2013

Compensation and Retirement Disclosure [Abstract]

8. Compensation Plans

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost is recognized over the period during which an employee is required to provide services in exchange for the award, the requisite service period (usually the vesting period).  The Company provides an estimate of forfeitures at the initial date of grant.

The Company has stock-based compensation plans under which incentive and non-qualified stock options and restricted shares are granted.  The 1998 Incentive and Non-Statutory Stock Option Plan (1998 Plan) provided for issuances of options to purchase the Company’s common stock under the administration of the compensation committee of the Board of Directors.  The intent of the 1998 Plan was to award options to officers, employees, directors, and other individuals providing services to the Company.  As of April 10, 2013, no further options may be granted under the 1998 Plan.  As of July 31, 2013, there were 85,500 options outstanding under the 1998 Plan.

In April 2004, the Company’s stockholders approved the 2004 Stock Incentive Plan (2004 Plan).  The 2004 Plan provides for issuances of awards of up to 250,000 restricted or unrestricted shares of the Company’s common stock, or incentive or non-statutory stock options to purchase such common stock. Of the total amount of shares authorized under the 2004 Plan, 126,000 options are outstanding, 26,000 restricted shares have been granted, and 98,000 shares are available for grant at July 31, 2013.

The options issued under the plans generally vest in periods up to five years based on the continuous service of the recipient and have 10 year contractual terms.  Share awards generally vest over one year.  Option and share awards provide for accelerated vesting if there is a change in control of the Company (as defined in the plans).

There were three options, for a total of 58,000 shares that expired in the first nine months of 2013 and three options, for a total of 15,000 shares that expired in the first nine months of fiscal year of 2012.  Other than the expirations, there was no activity related to stock options and outstanding stock option balances or other equity based compensation during the three and nine month periods ended July 31, 2013 and 2012.  The Company did not grant any equity based compensation during the three and nine months ended July 31, 2013 and 2012.

The following table summarizes information pertaining to outstanding stock options, all of which are exercisable, as of July 31, 2013:

Exercise Price Range		Outstanding Options (Shares)		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Intrinsic Value as of July 31, 2013
$	1.80 - $2.36		201,500		1.5	$	2.32	$	-
$	3.18 - $3.38		10,000		.3		3.28		-
			211,500		1.4	$	2.38	$	-

Outstanding options were granted with lives of 10 years and provide for vesting over a term of 0-5 years.  Since all outstanding stock options were fully vested as of July 31, 2013 there was no unrecognized share based compensation related to unvested options as of that date.  All incentive and non-qualified stock option grants had an exercise price equal to the market value of the underlying common stock on the date of grant.