Shareholders' Equity

12 Months Ended

Oct. 31, 2011

Equity [Abstract]

Shareholders' Equity

10.  Shareholders' Equity (in thousands except share and per share data):

Authorized Shares:  Our authorized capital stock consists of 20,000,000 shares of common stock and 5,000,000 shares of undesignated preferred stock.

Shareholder Rights Agreement:  On June 1, 2006, our board of directors declared a dividend distribution of one common stock purchase right for each outstanding share of our common stock, payable to shareholders of record at the close of business on June 11, 2006.  The description and terms of the rights are set forth in a Rights Agreement (the “Rights Agreement”), dated as of June 1, 2006, between us and American Stock Transfer & Trust Company, as Rights Agent.  The Rights Agreement was approved by the shareholders at our 2007 Annual Meeting of Shareholders.  

Upon certain acquisition events set forth in the Rights Agreement, each holder of a right other than certain “acquiring persons,” will have the right to receive upon exercise for a purchase price equal to ten times the purchase price of the right, shares of our common stock (or in certain circumstances, cash, property or other securities) having a market value equal to 20 times the purchase price.

Subsequent to October 31, 2011, the Rights Agreement was amended.  See Note 15 to the consolidated financial statements for additional information.

Stock-Based Compensation:  Our current stock-based compensation plans consist of our 2006 Stock Incentive Plan, as amended (the “2006 Plan”), and an Employee Stock Purchase Plan (“ESPP”).  Under the 2006 Plan, we are authorized to issue up to 1,500,000 shares of our common stock, plus 125,645 shares becoming available under our prior 1995 Stock Incentive Plan or issued or assumed by us in certain merger or acquisition transactions, pursuant to incentive awards granted under the plan.  At October 31, 2011, 341,962 shares remained available for grant under the 2006 Plan. Under the ESPP, we are authorized to sell and issue up to 400,000 shares of our common stock to our employees.  At October 31, 2011, a total of 90,831 shares remained available for issuance under the ESPP.

The 2006 Plan was approved by our shareholders in February 2006, and amended in 2009 as approved by our shareholders in March 2009.  The 2006 Plan permits us to grant incentive stock options, non-qualified stock options, and other share-based awards to eligible recipients for up to 1,500,000 shares of our common stock, plus 125,645 shares or awards outstanding under our prior 1995 Stock Incentive Plan as of its expiration which were subsequently cancelled or forfeited.  The grant price of an option under the 2006 Plan may not be less than the fair market value of the common stock subject to the option as of the grant date.  The term of any options granted under the 2006 Plan may not exceed seven years from the date of grant.  As of October 31, 2011, 1,504,144 stock options have been granted under the 2006 Plan; 220,461 of the stock options granted under the 2006 Plan have subsequently been forfeited and are again available for grant under the 2006 plan.

We recognized compensation expense for stock-based compensation awards on a straight-line basis over the requisite service period of all stock-based compensation awards granted to, but not yet vested.  Total stock-based compensation expense included in our Statements of Income for the years ended October 31, 2011, 2010, and 2009 was $1,231 ($775, net of tax), $1,455 ($1,013, net of tax), and $937 ($804, net of tax), respectively.

We estimated the fair values of our stock options using the Black-Scholes option-pricing model.  The Black-Scholes option valuation weighted average assumptions used in the valuation of stock options for the fiscal years ended October 31, 2011, 2010, and 2009 were as follows:

	2011			2010			2009
Risk-free rate (1)		0.70	%		1.90	%		1.10	%
Expected dividend yield	None			None			None
Expected stock volatility (2)		55	%		54	%		50	%
Expected life of stock options (3)	3.5 years			4.0 years			3.0 years
Fair value per option		$6.09 - $7.88			$5.11 - $6.93			$4.30 - $7.41
Forfeiture rate		14	%		10	%		8	%

(1) Based on U.S Treasury Strip interest rates which have a term that is consistent with the expected life of the stock options.

(2) Expected stock price volatility is based on our historical volatility over a period generally consistent with the expected term of our stock options.

(3) Expected life of stock options is estimated based on historical experience.

As of October 31, 2011, there was $1,608 of unrecognized compensation expense related to unvested stock options that is expected to be recognized over a weighted average period of approximately one year.

Stock Options:  The exercise price of each stock option equals 100% of the market price of our common stock on the date of grant and has a maximum term of 7 years.  Stock options granted to non-employee directors and employees generally vest ratably over two or three years.  A summary of the status of our stock options for the years ended October 31 is as follows:

	2011					2010					2009
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Outstanding at beginning of year		1,186,978		$	11.67		736,376		$	10.48		689,761		$	9.32
Granted		51,206			18.06		728,116			12.24		161,880			15.24
Exercised		(378,246	)		9.80		(204,807	)		9.01		(89,376	)		8.12
Cancelled		(46,382	)		13.37		(72,707	)		12.91		(25,889	)		17.39
Outstanding at end of year		813,556		$	12.84		1,186,978		$	11.67		736,376		$	10.48
Options exercisable at end of year		564,192		$	12.70		722,211		$	11.23		661,201		$	9.95

The total intrinsic value of options exercised during the fiscal year ended October 31, 2011, 2010, and 2009 was $2,997, $1,210, and $737, respectively.  The aggregate intrinsic value of options outstanding and exercisable as of October 31, 2011 was $2,977.  The weighted-average remaining contractual term of options outstanding and exercisable as of October 31 was 3.18 years.

The following table summarizes information about stock options outstanding at October 31, 2011:

Range of Exercise Prices		Number of Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)		Number of Options Exercisable		Weighted Average Exercise Price of Exercisable Options
	$9.50 –  $10.92		63,000	$	10.31		2.86		63,000	$	10.31
	12.00 –  $12.00		526,100		12.00		4.07		339,166		12.00
	12.16 –  $19.69		224,456		15.53		3.24		162,026		15.11
	$9.50 –  $19.69		813,556	$	12.84		3.73		564,192	$	12.70

Employee Stock Purchase Plan:  We sponsor an ESPP under which 400,000 shares of common stock were reserved for future issuance.  The ESPP was established to enable our employees to invest in our common stock through payroll deductions.  Shares are available to employees to purchase shares of stock at a price equal to 95% of the fair market value of the stock on the last day of each offering period.  There were 10,690, 10,809, and 7,065 shares purchased through the ESPP in fiscal 2011, 2010, and 2009, respectively.

Repurchase of Common Shares:  On September 29, 2009, we announced that our Board of Directors had authorized the repurchase of up to 500,000 shares of our common stock.  On March 4, 2010, the Board of Directors increased the number of shares we are authorized to repurchase by an incremental 1,000,000 shares of our common stock, for a total of 1,500,000 shares to be repurchased.  The share repurchase is funded using our existing cash balances and may occur either in the open market or through private transactions from time to time, in accordance with SEC regulations.  The timing and extent to which we may buy back shares depends upon market conditions and other corporate considerations.  The repurchase plan does not have an expiration date.

From inception of the program on September 29, 2009 through October 31, 2011, we used $15,574 to repurchase 1,056,362 shares at an average price of $14.74 per share.  All shares repurchased by the Company were purchased under a Securities and Exchange Commission Rule 10b5-1 plan.  The following table presents the total number of shares repurchased from September 29, 2009 through October 31, 2011, the average price paid per share and the number of shares that were purchased and the maximum number of shares that may yet be purchased at October 31, 2011, pursuant to our stock repurchase program:

Period	Total  Number  of Shares  Purchased		Average  Price  Paid per  Share		Total number  of Shares  Purchased  as Part of  Publicly  Announced  Plan or  Program		Maximum Number of Shares that May Yet be Purchased Under the Plan or Program
September 29, 2009 – September 30, 2009		43,968	$	13.75		43,968		456,032
October 1, 2009 – October 31, 2009		176,436		12.97		176,436		279,596
November 1, 2009 – November 30, 2009		213,377		11.96		213,377		66,219
December 1, 2009 – December 31, 2009		-		-		-		66,219
January 1, 2010 – January 31, 2010		-		-		-		66,219
February 1, 2010 – February 28, 2010		-		-		-		66,219
March 1, 2010 – March 31, 2010		-		-		-		1,066,219
April 1, 2010 – April 30, 2010		-		-		-		1,066,219
May 1, 2010 – May 31, 2010		-		-		-		1,066,219
June 1, 2010 – June 30, 2010		-		-		-		1,066,219
July 1, 2010 – July 31, 2010		-		-		-		1,066,219
August 1, 2010 – August 31, 2010		-		-		-		1,066,219
September 1, 2010 – September 30, 2010		99,559		14.61		99,559		966,660
October 1, 2010 – October 31, 2010		72,900		15.02		72,900		893,760
November 1, 2010 – November 30, 2010		4,121		14.97		4,121		889,639
December 1, 2010 – December 31, 2010		-		-		-		889,639
January 1, 2011 – January 31, 2011		4,300		15.04		4,300		885,339
February 1, 2011 – February 28, 2011		-		-		-		885,339
March 1, 2011 – March 31, 2011		-		-		-		885,339
April 1, 2011 – April 30, 2011		-		-		-		885,339
May 1, 2011 – May 31, 2011		-		-		-		885,339
June 1, 2011 – June 30, 2011		-		-		-		885,339
July 1, 2011 – July 31, 2011		-		-		-		885,339
August 1, 2011 – August 31, 2011		62,100		16.98		62,100		823,239
September 1, 2011 – September 30, 2011		307,636		16.81		307,636		515,603
October 1, 2011 – October 31, 2011		71,965		17.05		71,965		443,638
Total		1,056,362	$	14.74		1,056,362		443,638