NOTE 11 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. At October 31, 2015, options available for future grant under the plan were 300,000 and no options were outstanding.

As of October 31, 2015, the Company has 5,000 stock options outstanding that were granted pursuant to individual award agreements outside of the 2011 Plan. The Company does not expect to award additional stock options outside of the 2011 Plan in the future.

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 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 2015 and 2014, the Company recognized approximately $9,000 and $8,000 in compensation cost related to stock options respectively.

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


	Number of Shares			Stock Option Price Range		Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at November 2, 2013		30,400			7.91 - 18.50		13.58
Granted		—			—		—
Exercised		(5,875	)		7.91 - 8.49		7.93
Canceled		(17,525	)		7.91 - 18.50		17.30

Outstanding at November 1, 2014		7,000		$	7.91 - 10.45	$	9.02

Granted		—			—		—
Exercised		(2,000	)		7.91		7.91
Canceled		—			—		—

Outstanding at October 31, 2015		5,000		$	8.49 - 10.45	$	9.47	$	16,900

The aggregate intrinsic value in the table above represents total intrinsic value (of options in the money), which is the difference between the Company’s closing stock price on the last trading day of fiscal year 2015 and the exercise price times the number of shares, that would have been received by the option holders had the option holders exercised their options on October 31, 2015.

The following table summarizes information about the outstanding stock options at October 31, 2015:


Options Outstanding							Options Exercisable
Exercise Prices	Shares Outstanding		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$10.45		2,500		1	$	10.45		2,500	$	10.45
$ 8.49		2,500		—		8.49		1,750		8.49

		5,000		1	$	9.47		4,250	$	9.64

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 dividend yield was calculated by dividing the current annualized dividend by the option exercise price for each grant. 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.

As of October 31, 2015, there is $602 of total unrecognized compensation cost related to non-vested share based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted average period of .14 years.