Stock Option Plan

12 Months Ended

Nov. 04, 2023

Share-Based Payment Arrangement [Abstract]

NOTE 12 Stock Option Plan

In June 2011, the Company’s Board of Directors adopted, and the Company’s shareholders later approved, the Nobility Homes, Inc. 2011 Stock Incentive Plan (the “Plan”), providing for the issuance of options to purchase shares of common stock, stock appreciation rights and other stock-based awards to employees and non-employee directors. A total of 300,000 shares were reserved for issuance under the Plan, all of which may be issued pursuant to the exercise of incentive stock options. The Plan was amended by the Board of Directors to extend the termination date from June 2021 until June 1, 2026. At November 4, 2023, 225,742 options were available for future grant under the Plan and 74,258 options were outstanding.

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. The cost is to be recognized over the period during which an employee is required to provide a service in exchange for the award (usually the vesting period). The grant date fair value of employee share options and similar instruments will be estimated using option-pricing models adjusted for the unique characteristics of those instruments (unless observable market prices for the same or similar instruments are available). If an equity award is modified after the grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair value of the modified award over the fair value of the original award immediately before the modification. During fiscal years 2023 and 2022, the Company recognized compensation costs related to the vesting of stock options of approximately $112,816 and $105,442 respectively.

A summary of information with respect to options granted is as follows:


	Number of Shares		Stock Option Price Range		Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Outstanding at November 6, 2021		47,300	$ 12.10 - 25.75		$	24.41		—
Granted		20,400		33.10		33.10		—
Exercised		1,500		12.10		12.10		—
Canceled		—		—		—		—
Outstanding at November 5, 2022		66,200	$ 24.00 - 33.10		$	27.37	$	498,844
Granted		29,300		24.25		24.25	$	223,214
Exercised		—		—		—		—
Canceled		21,242	$ 24.00 - 33.10			26.21	$	156,905
Outstanding at November 4, 2023		74,258	$ 24.00 - 33.10		$	26.46	$	565,153

The aggregate intrinsic value of exercisable Company options was $33,752, and the aggregate intrinsic value of all outstanding in-the-money options was $169,798 at November 4, 2023, which is the difference between the Company’s closing stock price on the last trading day of fiscal year 2023 and the exercise price times the number of shares, that would have been received by the option holder had the option holder exercised their options on November 4, 2023.

The following table summarizes information about the outstanding stock options at November 4, 2023:


Options Outstanding								Options Exercisable
Exercise Price		Shares Outstanding		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$	24.00		16,908		2	$	24.00		7,609	$	24.00
$	25.75		15,750		3		25.75		3,938		25.75
$	33.10		16,400		4		33.10		1,640		33.10
$	24.25		25,200		5		24.25		—		24.25
			74,258		3.67	$	26.46	$	13,187	$	26.46

The fair value of each option is determined using the Black-Scholes option-pricing model which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, expected dividend payments, and the risk-free interest rate over the expected life of the option. The expected volatility was determined considering the Company’s historical stock prices for the fiscal year the grant occurred and prior fiscal years for a period equal to the expected life of the option. The risk-free interest rate was the rate available on zero coupon U.S. government obligations with a term equal to the expected life of the option. The expected life of the option was estimated based on the exercise history from previous grants.