Stock-Based Compensation

3 Months Ended

Jan. 31, 2013

Share-based Compensation [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company's Omnibus Incentive Plan provides for the granting of stock options, restricted stock awards (RSAs), restricted stock units (RSUs) and other stock-based and cash-based awards.

Restricted Stock Awards

RSAs are awarded to key employees and officers and typically vest on a straight-line basis over a three-year period with service as the vesting condition. The recipient is entitled to all of the rights of a shareholder, except that the shares are nontransferable during the vesting period. The fair value of the RSAs is established on the grant date and then expensed over the vesting period with a corresponding increase to additional paid-in-capital. A summary of non-vested restricted stock award changes during the three months ended January 31, 2013 is presented below:

	Shares		Weighted - Average Grant-Date Fair Value Per Share
Non-vested at October 31, 2012	212,700		$	16.08
Granted	71,400		21.09
Vested	(67,300	)	16.21
Non-vested at January 31, 2013	216,800		$	17.69

The weighted-average grant-date fair value of restricted stock granted during the three months ended January 31, 2013 and 2012 was $21.09 and $15.08 per share, respectively. The total fair value of restricted stock vested during the three months ended January 31, 2013 and 2012 was $1.1 million and $0.9 million, respectively. Total unrecognized compensation cost related to unamortized restricted stock awards was $2.4 million as of January 31, 2013. This cost is expected to be recognized over a weighted-average period of 2.3 years.

Stock Options

The Company uses the Black-Scholes pricing model to estimate the fair value of its stock options. The following table provides a summary of assumptions used to estimate the fair value of options issued during the three months ended January 31, 2013 and 2012.

	Three Months Ended
	January 31,
	2013			2012
Weighted-average expected volatility	54.0		%	54.0		%
Expected term (in years)	4.9-5.1			4.9-5.1
Risk-free interest rate	0.6		%	1.0		%
Expected dividend yield over expected term	1.0		%	1.0		%
Weighted-average grant-date fair value per share	$	8.98		$	6.49

Options are awarded to key employees, officers and non-employee directors. Director awards vest immediately while employee and officer awards typically cliff vest over a three-year period with service as the vesting condition. Similar to RSAs, the fair value of the options is established on the grant date and expensed over the vesting period with a corresponding increase to additional paid-in-capital. The following table summarizes the Company's stock option shares activity for the three months ended January 31, 2013:

	Shares		Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (000s)
Outstanding at October 31, 2012	2,473,250		$	14.57
Granted	423,100		21.06
Exercised	(37,903	)	13.38
Cancelled/Expired	(2,500	)	20.99
Outstanding at January 31, 2013	2,855,947		15.54		7.4	$	14,813
Vested or expected to vest at January 31, 2013	2,765,986		15.44		7.4	$	14,618
Exercisable at January 31, 2013	1,877,560		$	14.07	6.5	$	12,380

The total intrinsic value of options (the amount by which the market price of the stock on the date of exercise exceeded the exercise price of the option) exercised during the three months ended January 31, 2013 and 2012 was $0.3 million and $12.0 thousand, respectively. The total fair value of shares vested during the three months ended January 31, 2013 and 2012 was $2.5 million and $2.1 million, respectively. Total unrecognized compensation cost related to stock options granted under the 2008 Plan was $5.3 million as of January 31, 2013. This cost is expected to be recognized over a weighted-average period of 1.8 years.

Restricted Stock Units

RSUs are awarded to key employees, officers and non-employee directors. The director awards vest immediately and the employee and officer awards typically cliff vest after a three-year period with service as the vesting condition. RSUs are not considered to be outstanding stock and do not have voting rights, although they do receive cash for an equivalent amount of dividends paid to the Company's shareholders. Upon the completion of certain service requirements, each RSU is payable to the holder in cash based on the market value of one share of the Company's common stock. Accordingly, the Company records a liability for the RSUs on its balance sheet and recognizes any changes in the market value during each reporting period as an expense. A summary of non-vested restricted stock unit changes during the three months ended January 31, 2013 is presented below:

	Shares	Weighted - Average Grant-Date Fair Value Per Share
Non-vested at October 31, 2012	161,000	$	15.47
Granted	—	—
Vested	—	—
Non-vested at January 31, 2013	161,000	$	15.47

No restricted stock units were granted during the three months ended January 31, 2013. The weighted-average grant-date fair value of restricted stock units granted during the three months ended January 31, 2012 was $15.08 per share. No restricted stock units vested during the three months ended January 31, 2013 or 2012. Total unrecognized compensation cost based on service related to unamortized restricted stock units was $1.5 million as of January 31, 2013. This cost does not include market fluctuations and is expected to be recognized over a weighted-average period of 1.9 years. There was no cash used to settle restricted stock units during the three months ended January 31, 2013 or 2012. The number of RSU awards outstanding as of January 31, 2013 and October 31, 2012 was 194,358.