9. Shareholders' Equity and Share-based Payments

12 Months Ended

Oct. 31, 2014

Notes

9. Shareholders' Equity and Share-based Payments

9. Stock Options

In fiscal year 2009, the Company’s Board of Directors approved the Company’s 2009 stock option plan, which provides for the granting of stock options for up to 500,000 shares of the Company’s common stock. During fiscal year 2010, the plan was amended to provide for the granting of another 500,000 stock option shares, for a total provision of 1,000,000 stock option shares of the Company’s common stock as of October 31, 2010. During fiscal year 2011, the plan was amended for the granting of another 500,000 stock option shares, for a total provision of 1,500,000 stock option shares of the Company’s common stock as of October 31, 2013 and 2014. The Company's prior stock option plan, which provided for the granting of stock options for up to 2,200,000 shares of the Company's common stock, expired during fiscal year 2009.

The Black-Scholes stock option valuation model was developed for use in estimating the fair value of traded stock options, which have no vesting restrictions and are fully transferable. In addition, stock option valuation models require the input of highly subjective assumptions including expected stock price volatility.

There were 910,500 shares of common stock reserved for future issuance under the Company’s 2009 stock option plan as of October 31, 2014. For fiscal years 2014 and 2013, stock-based compensation expenses of $310,000 and $275,000 was primarily charged to selling, general, and administrative expense. There was $682,000 of unrecognized stock-based compensation costs expected to be recognized over a weighted average period of 3.07 years as of October 31, 2014. The Company had 256,400 shares in unrecognized stock-based options as of October 31, 2014.

Information with respect to the Company’s stock options for fiscal years 2014 and 2013 is as follows:

	Number of stock options	Weighted average exercise price	Weighted average remaining contractual term (in years)	Aggregate intrinsic value
Stock options outstanding at November 1, 2012	1,341,500	$1.63
Stock options granted	70,000	$3.34
Stock options exercised	(254,000)	$0.32
Stock options forfeited and expired	(56,500)	$1.09 $2.07
Outstanding at October 31, 2013	1,101,000
Stock options granted	72,500	$3.39
Stock options exercised	(252,000)	$0.42
Stock options forfeited	(5,000)	$0.51
Stock options outstanding at October 31, 2014	916,500	$2.64	4.97	$1,405,000
Stock options exercisable at October  31, 2014	660,100	$2.21	3.69	$1,285,000

The weighted average grant date fair value of the Company’s stock options granted during fiscal years 2014 and 2013 was $2.97 and $2.94, respectively. The total intrinsic value of stock options exercised was $694,000 and $760,000 during fiscal years 2014 and 2013, respectively.